BASHAS' TO EXPAND HOME SHOPPING

DAN ALAIMO

NEW ORLEANS -- Home shopping is profitable for Bashas', said Mike Gardner, director of the Bashas' Groceries on the Go service operated by the Chandler, Ariz., chain. He said the Internet, phone and fax service will see major enhancements this year, including a site redesign and curb side pickup at stores.

The service is adding business for Bashas', although he declined to release sales figures. Notably, he pointed out, 86% of its first-time customers indicated that they normally shop at another supermarket, Gardner said.

"We are doing quite well," he said, speaking at the ninth annual Conference on Global Electronic Marketing, also known as GEMCON, last month. He claimed that the average Bashas' Groceries on the Go order is up to 50% larger than competing home shopping services, but declined to cite figures. In addition, Bashas' home shopping orders exceed its in-store transactions by 600%, Gardner said. The retailer charges a $9.95 delivery fee.

"Nobody else in Phoenix is doing this, but we are still committed to it and we think it is an important part of the grocery retail business," he said. Bashas' first started in home shopping in 1985 with the phone-based Shoppers Express service, which added Internet service in 1996, but went out of business in 1998.

"When we ceased operation in 1998, my phone rang off the hook from all these customers who were devastated. Their lifestyles had been readjusted to this kind of program. They were loyal to Bashas' and they were loyal to the home delivery program," he said. After Bashas' re-launched the service at the beginning of last year, using its own employees and vehicles, "our sales have blossomed even further than we could have imagined," he said. The retailer uses software from Independent Delivery Services, Windsor, Conn., for the program.

"Now we are in the year 2000 and we know that our competition is finally realizing that there is something to be said for home shopping. So we believe that it is very important to be the first in the market and that enhances our position," Gardner said.

"Bashas' has always been known in its market area for service. This idea of home shopping and home delivery is that service differential that we believe sets us apart and will continue to set us apart," he said.

A number of improvements are planned by the end of the year, he said, including the curb side pick up, the site redesign, and more details on product such as nutritional information.

"We are working on the grocery pickup concept because we know that home delivery is not for everybody. Home delivery means that you the consumer have to wait at your house for 90 minutes for us to be there, and that's not convenient for many customers and that's why we are working on a grocery pickup concept. You come by our store when you are ready, instead of you waiting at your house for 90 minutes," Gardner said.

For dual-income, time-starved families, "you might not have 90 minutes. You might not be sure when you are going to be home to wait for your groceries," he said.

The nutritional information had been included when Bashas' used Shoppers Express, but a customer poll showed they weren't interested in it. "But as more and more people get onto the web, that is something we need to consider because more and more people are looking to the web for that kind of information," he said.

Although the Internet program started last year, "we need to constantly re-work the Web site. I've got about 30 new ideas of things we need to do to keep on the cutting edge," Gardner said. Among them: data mining and a customized shopping experience, even for different members of the same household. "Continued customization is the next step," he said.

One reason for Bashas' succeeding where others have not is because of the name recognition and connection it has to consumers in the Phoenix and Tucson areas. "We discovered that customers wanted to deal with a company that they knew and trusted. When Shoppers Express was our partner, and you went to the Shoppers Express Web site, nobody knew who Shoppers Express was. When the Shoppers Express delivery van pulled up and delivered the groceries to the customer's home, the customer did not have a relationship with Shoppers Express. They had a relationship with Bashas'. Because of that disconnect, it was difficult for us to grow, and it is one of the reasons I believe that Shoppers Express went out of business in 1998," he said.

Bashas' Groceries on the Go delivers all products that the store carries, including perishables and alcoholic beverages, but not lottery tickets, which is prohibited by law, and video rentals, because of the logistics involved in returning the tapes. "We deliver it all. We think that is very, very important. We want to eliminate your trip to the store. If we don't do that, if you use our service and still have to make a trip to the store, we didn't do you any favors," he said.

The retailer will deliver to workplaces, day care centers "or anyplace where the consumers need their groceries. This provides us with an amazing opportunity to sell groceries in places where we haven't been able to sell them before," Gardner said.

A key to gaining customer loyalty to such a program is making the program simple to use, like America Online, he said. "What they know is walking inside stores. What they don't know is going on the Web site, clicking and finding products, and shopping. If it is difficult, they are not going to do it. It is too much out of their comfort zone," he said.

When Bashas' re-launched the service last year, it had kept its customers' shopping histories and sent them out with personalized letters. "We did not give them the whole store, like Shoppers Express. We gave them only the things that they were interested in. Everything else just gets in the way. They don't care about things other people buy, they only care about the things that they buy."

Bashas' also implemented a meal planning tool that enables customers to click once on a recipe and order all the items they need for it. "This kind of ease is what brings the loyalty not only to Bashas, but also to the brands. Once you are on the quick shop list, once you are on the recipe list, and all it takes is one click to buy the product, you are going to continue to do that," he said.

Bashas' experience in building relationships with consumers and its visibility in its marketing areas contribute to its success in home shopping. "We believe it is important to have a brick-and-mortar store as well as a click store. If Webvan comes to Phoenix, the only times you will see their name will be through paid advertisements. You don't drive by a Webvan store every half mile on your way home. When you are driving around Phoenix, you see Bashas' -- you see us, you know us, you trust us, and we believe that relationship is what it takes to be successful. You need a combination of e-commerce and the brick-and-mortar," Gardner said.