CHALLENGE
While industry pundits were giving last rites to the remaining Internet grocery pureplays four years ago, FreshDirect began appearing on subway ads and phone kiosks across New York City.

Despite the negative press for the marketplace, FreshDirect’s brand awareness grew like wildfire thanks to trusty offline mass ads pitching offers of $50 in free perishable groceries for first-time customers. Although they were racking up a database of hundreds of thousands of customers, they weren’t about to sit pat on the issue of ROI.

Enter Steve Druckman, who came on board two years ago as CMO to tap his abundant direct marketing experience.

“We have about a 99% awareness rate in Manhattan, but mass media is a costly proposition,” he says. “As we better segment our customer base, we have been using and will be using more money on direct channels versus just flashing the message out there.”

To continue to grow, Druckman knew they had to add features to the site that might entice busy consumers into filling their virtual shopping carts even more.


CAMPAIGN
Customers using FreshDirect’s site kept coming back because of the convenience and time-savings that it provided. So, Druckman and his team thought about what other features they could add to the site that might appeal to time-starved individuals:

Strategy #1. Auto-fill shopping cart program

In August, FreshDirect launched “One-Click Recipes,” a service that offers around 400 recipes from 53 cookbooks. The program, which Druckman’s team developed in-house over nine months, let customers search recipes by criteria, such as ingredients, level of difficulty, theme, number served and cooking method.

Once a shopper selected a recipe, the site automatically created a special “Buy the Ingredients” shopping cart that contained the right amounts of the needed ingredients, as well as a “Things you may already have” section with common items that most cooks already had in their pantries.

At the bottom of this page was an orange “Add selected to cart” button that then put the checked ingredients into the shopper’s cart.

To promote One-Click Recipes, Druckman’s team broadened the media mix to get more exposure, using not only email and direct mail but also TV, billboards, phone kiosks, delivery truck signage and in-box order slips.

Strategy #2. Easy meal program for the summer

This summer, Druckman’s team developed “Easy Summer Meals” campaign to increase sales during the typically slower warm months. They sent a file of 50,000 infrequent customers an eight-page menu-styled mailer and followed up with an email every two weeks.

In terms of the six emails, it didn’t matter whether recipients purchased or showed any kind of response –- the messages were delivered biweekly except in the case of an opt-out.

Each week, the email touted a different free item -- from cedar-plank salmon to tandoori chicken, plus tips on how to prepare the item. The email read: “Try our Tandoori-Marinated Chicken Breast (about 1.5 lb) for FREE until August 6th! No need to add the product to your cart -- we’ll automatically include it in your order when you enter the code TANDOORICHIX at checkout.”

Strategy #3. Re-merchandise the home page

FreshDirect relaunched their site a year ago to accommodate a switch in merchandising tactics that eventually included a new line of affordable ready-to-eat gourmet meal products. For example, the “Prepared By Our In-House Chefs” section was placed at the top-center category of the Web site.

As part of this, FreshDirect offered eight already-made dishes based on recipes from celebrity chef/restaurateur Terrance Brennan. All the buyer had to do was pop them in the microwave for a few minutes.

On the site, the copy pushed the convenience factor: “Fresh Dining meals give you portability, speed and convenience without sacrificing freshness or flavor. Choose from meals created by top chef Terrance Brennan, 500-calorie Smart & Simple entrées or vibrant vegetable sides. All you need is four minutes and a microwave!”


RESULTS
Druckman is happy to report that the new approach is working. “People got the email and direct mail about the recipes, saw TV ads, happened to observe an ad for the recipes on the side of a Fresh Direct truck in their neighborhood and then saw the campaign again in their box if they placed an order.”

Regarding the One-Click Recipes, FreshDirect saw 13% of their customer base using the recipes.

The two-pronged postal mail/email follow-up also did well. Of those mailed, more than 20% of the targeted file placed an order and 13% of those repeated within two weeks.

Druckman credits the high repeat rate to a banner on the confirmation page that included a special offer for returning customers. “If you can take those targeted messages and keep them consistent at many different [touchpoints], then it starts to tell a story and begins to be relevant to the people who are going to enjoy using your brand.”

Since the overall merchandising strategy was put into play, traffic to FreshDirect’s meals-oriented sections has doubled. “It’s been a consistently growing area for us,” Druckman says.

Because customers are showing such specific interests when ordering different types of meals, the merchandising strategy also helps FreshDirect better target customers with email and direct mail.

“2005 was a ‘toe-dipping’ year for us and 2006 involved investing more in direct marketing,” Druckman says. “The more we get to understand our customers and who they are, the better we’ll get at targeting.”

Useful links related to this article:

Creative samples from FreshDirect:
http://www.marketingsherpa.com/cs/freshdir/study.html

FreshDirect:
http://www.freshdirect.com





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