Paul Holmes 06 May 2001 // 11:00PM GMT
Remember those heady days of 1999 when it seemed there was no end to what Internet commerce could do? Into this congestion drove a fleet of trucks bearing a large peach logo. Their mission: To change the way people shop for groceries. But how to stand out in the traffic jam? HomeGrocer.com and its agency, Waggener Edstrom, devised a series of special events that brilliantly demonstrated how to use this new service. They even managed to talk some beloved celebrities, such as Joan Embry of the San Diego Zoo, into helping out. And, they shared their success with dozens of charities. The result: Record-breaking sales. It was “A Peach of a Launch” for all.
CHALLENGE OR OPPORTUNITY:
HomeGrocer.com, based in Kirkland, Wash., enables people to shop for groceries and packaged goods using their computers and an Internet connection, with next-day delivery. Founded in 1998, the company was making 2,300 deliveries a day from five warehouses by the end of the first quarter of 2000.
HomeGrocer.com, whose trucks bear a well-recognized peach logo, rolled out its services in five markets from November 1999 to June 2000. The company hired Waggener Edstrom to create a market launch that would drive site traffic and increase sales. Waggener Edstrom developed a turnkey launch program that was implemented in several cities. Judges: For ease of explanation, this entry will focus on the launch in San Diego, California, on May 31, 2000.
RESEARCH, PLANNING AND OBJECTIVES
In preparing for the turnkey program, Waggener Edstrom reviewed market research; talked to industry analysts; reviewed existing figures from already-opened facilities; and conducted market research to determine the local competitors. Key findings included:
- Over the next three years, online grocer sales were expected to reach $10.8 billion, compared to $235 million in 1998. Online grocery companies faced intense competition from “brick-and-mortar” markets such as Kroger businesses and Albertsons, and other Internet services, such as Webvan and SanDiegoGrocer.com. The online grocer winners will be those who can overcome customers’ perceptions of higher price and their reluctance to shop online, where they can’t actually “feel the peach.”
- Customers would need to be shown that food and packaged goods were stored and handled safely, and they must trust the drivers, who go into the home.
- San Diego is ranked fifth in the nation for home Internet use, which meant the audience there might be more receptive to messages reflecting the convenience of online shopping.
Based on the research, Waggener Edstrom developed the following plan.
Objective: The objective of the San Diego HomeGrocer.com launch was to meet the first-day sales goal for the number of orders placed. (Please note that for business reasons, the sales goal cannot be shared; however, the average dollar amount for each online sale is $100.) The bar was set high. Each launch had already met its goal, and the team would need to work harder to exceed the high expectations.
Audience: The primary audience was rather broad – everyone in San Diego who needs to buy groceries – but was focused on women, as they do the majority of household shopping. Most HomeGrocer.com customers are mothers and are interested in the convenience of online shopping with next-day home delivery. The audience was NOT limited to those who had experience ordering on the Internet; HomeGrocer.com also sought to attract first-time Web shoppers as well.
While designing the turnkey program, Waggener Edstrom worked to create a launch event that would generate business and consumer coverage of the event in print and broadcast media; position HomeGrocer.com as a trusted, supportive member of the local communities in which it does business; and differentiate HomeGrocer.com from competitive online and brick-and-mortar grocers.
Our criteria were to: 1) Create a launch event that could run similarly in each market, but could be infused with local flavor. 2) Create cost efficiencies by amortizing the price of staging materials which could be used in other cities, and benefit from efficiencies of labor by creating a PR team with intimate knowledge of implementation. 3) Include a charitable element to support HomeGrocer.com’s commitment to giving back to the community, and to increase interest in the launch. 4) Encourage use of the HomeGrocer.com Web site, to increase customer traffic and word-of-mouth. 5) Show off the company's attention to cleanliness, health and safety, and product depth by holding the event at the regional HomeGrocer.com Customer Fulfillment Center. 6) Incorporate visual elements that would stimulate media interest. The solution…
The solution was “Shop for a Difference,” a celebrity charity event that brought together local VIPs for a 90-minute competition at the HomeGrocer.com warehouse to benefit regional non-profit organizations. Well-known personalities, such as Joan Embery of the San Diego Zoo, would have 20 minutes to place a HomeGrocer.com order for food and packaged goods for the charity of their choice using the charity’s predetermined wish list. Then, teams of VIPs and HomeGrocer.com "personal shoppers” would scurry around the warehouse to fill the orders.
- Researched and recruited local celebrities – such as Joan Embery of the San Diego Zoo, a local college basketball coach, a local newspaper food editor, a prominent chef and a San Diego television consumer affairs reporter – and worked with the charities they selected as beneficiaries. (See binder for list of celebrity VIPs.)
- Staged event in the Customer Fulfillment Center with all necessary equipment, including computer kiosks; handled all event logistics; and coached company executives on their presentations. Using the warehouse put the spotlight on HomeGrocer.com’s outstanding facilities and trustworthy employees, especially drivers.
- Created extensive media materials and conducted media relations activities, including on-site press management and radio station deliveries on the day of the events.
Scheduled deliveries to the charities by HomeGrocer.com drivers and the VIPs.
Challenges and Solutions included:
“Grand Opening, So What?” – Many of us have encountered media yawns over a “grand opening.” In addition, while getting participants to use the HomeGrocer.com site was one of our goals, it could be seen as self-serving. Solution: Involving the charities helped generate interest among media and the celebrity participants and rightfully positioned the event as a charity fund-raiser.
Celebrities Online, On Camera – A few of the celebrity VIPS didn’t have much experience with online shopping, and if they had fumbled about on camera, it would not support HomeGrocer.com's reputation of being easy to use. Solution: In some cases, we were able to give them a practice session from their homes and helpful tips prior to the start of the event, and coached them at the event.
Judges, Please see binder for additional challenges and solutions.
The HomeGrocer.com launch was an overwhelming success on all fronts, and "Shop for a Difference" played a key role. While advertising was also a factor, the public relations program helped stimulate trial and create customer trust and affinity in a way that advertising alone cannot.
In San Diego, first-day sales exceeded client expectations by 400 percent.
Media coverage in San Diego achieved several goals:
- It positioned HomeGrocer.com as convenient and easy to use – even for those who don’t have Internet shopping experience OR computer skills. The event generated unsolicited testimonials on-air from respected local leaders. The value of these comments aired on the local ABC-TV affiliate is immense:
- “It’s easy to do even if you don’t know how to use a computer. Or type. Like me.” -- Brad Holland, University of San Diego basketball coach
- “I haven’t even hardly learned how to use a computer, but this could be an incentive if I don’t have to go to the grocery store.” -- Joan Embry, well known spokesperson for the San Diego Zoo
- It helped differentiate HomeGrocer.com from its competitor, which was also launching that week.
- It helped drive traffic to the site that day and stimulated trial after the event as well. The story was covered in depth on three network television affiliates, in the area’s major daily newspaper and the local business journal, and discussed on various radio stations. (HomeGrocer.com orders are accepted for next-day delivery until 11 p.m., so it is believed that day-of-event television coverage played a large role in generating orders.)
More than $5,500 in goods was donated in each city to the participating charities, and the goodwill generated was enormous. “We are so thrilled to be getting all these fresh produce items that we usually cannot provide,” one charity spokesperson told reporters. Another later told a team member, "HomeGrocer.com saved our lives... Their timing was just perfect! They helped us during our season of most need (springtime) and the supplies lasted throughout the entire season!" Waggener Edstrom even got a call after the launch from a crying, grateful food bank representative, who said that without this donation they would not have had enough food to feed Thanksgiving meals to those in need. The visibility for the donations helped emphasize HomeGrocer.com’s ongoing commitment to improving the quality of life in the cities it serves.
The events had bottom-line business results as well. They helped position HomeGrocer.com as a well-run company with extremely high value. The successful launches helped drive the company’s growth in second quarter 2000, with record net revenues reported. The company was subsequently purchased by Webvan in September 2000 and will continue to provide trusted and convenient home delivery of goods under that leadership.
The “Shop for a Difference” program made a huge difference for several dozen charities across the country, and helped differentiate HomeGrocer.com in the competitive online shopping environment. It was truly “A Peach of a Launch.”