Food-by-Mail Industry Update – November 2016

Dear Fellow Foodies,

The holidays are in full swing and as the numbers roll in, we are all looking for ways to drive sales.  We have put our heads together and created a list of some successful thoughts and ideas to consider.

  1. Be ready to take orders up to the final hour! Christmas falls on Sunday this year, so you can heavily promote “there’s still time to order” on your homepage and with emails up to Thursday, Dec 22.
  2. Are you offering any free shipping promotions?
    • We encourage you to run the numbers on some of your highest margin items. See if you can make free shipping work with some type of minimum-order hurdle. Even if you only come up with 6 or 7 items, this will enable you to hype it in your paid search ads. You can also use these items as part of your featured item rotation on your homepage, and you can create a “free shipping” product category in your site navigation.
    • Offer a free upgrade on shipping. It’s a way to promote “free shipping” while still collecting some shipping income.  This is a great way to extend the season by offering expedited delivery without charging for it.
    • If your standard offer is to give free shipping for orders over a certain dollar amount, then use item-specific promotions that feature prices higher than your free shipping hurdle rate. Position the offer as free shipping on that item. You can also create a “free shipping” category on your site and feature items that are all priced above your free shipping threshold.
  3. Review your historical ROAS (return on advertising spend) and rank each program’s December results from best to worst. You may find the response for certain key words or ad groups is very different in December than the rest of the year. Based on this December-only view, are there any opportunities to shift funds from a lower ROAS program to a higher one? For example, if an additional $5K or $10K spent on paid search marketing will generate a higher return than a late-season mailing you have planned, you may be better off to cancel the mailing, and shift the money to your paid search program. Even if the mailing is printed, you may be better off not mailing it, saving the postage money, and redeploying the funds to another channel. Run the numbers to see.
  4. Start an outbound calling program to existing customers.
    • Pull a list of all buyers who had purchased by this time last holiday season but have yet to order this season. Sort them by the dollar volume of their Holiday 2015 purchases. Start calling from the top of the list and work your way down. Let the customer know you are here to help them take care of their gifting needs. Have their prior year gift list handy and offer to email or fax it to them. Alert them to your best specials and discounts. Create a few exclusive offers just for this group of customers.
    • Pull a list of your top buyers and call them with exclusive offers and specials.
    • Call all new buyers one week after they place their first order. Thank them for their business, ask if they were satisfied with the service and give them a great deal to place a second order.
    • Pull a list of all of your vendors, and let them know you can help them with their corporate gifting needs.
  5. Extend employee discounts to family and friends. Offer a one-day sale with a deep discount on your overstocks.
  6. Print business cards with a friends-and-family discount offer. Distribute them liberally at all customer touch points. Encourage customers, friends, family and suppliers to pass them along. Include them in outgoing packages to encourage new buyers to place a second order and to convert gift recipients into buyers.
  7. If you don’t have a local retail store, block off a small area in your warehouse by an outside entrance for customers to walk in and pick up and/or order gifts. Promote your “warehouse pickup service” with post card mailings, outbound calls to customers in local zip codes, and by using local paid search on Google and Bing.
  8. Create a page on your website for gifts under a certain price. Send an email featuring “Gifts Under $X’, (the amount will vary depending on your product line and price points). Offer these items as add-on’s or up-sells for phone orders. Test ‘gourmet gifts under $X’ as one of your paid search ad groups.
  9. Create special offers for transaction pages on your site. For example, create a new customer special offer for the guest registration page. Create a self-buyer pop up window that appears when a customer indicates they are placing a gift order and link it to a Gift-Giver’s Specials page.
  10. Review your inventory position. Are you are sitting on more stock than you will need? It’s far easier to sell off inventory in the season than afterward, so start now.
    • Get aggressive with markdowns and use the web-specials section of your site to promote them.
    • Use highly targeted promotional emails to lower inventory. Don’t send all emails to all customers. You will have much better success generating additional sales, lowering overstocks, and not being branded as a spammer if you target your emails to specific groups of customers. For example, if you are overstocked on olive oil, send an email to past olive oil buyers with a great deal on olive oil.
    • Offer extra discounts on overstocks to your top customers, and position it as an “exclusive best-customer sale.”
    • If you have any self-purchasers who are ordering at this time of year, insert clearance flyers inside their boxes. Note: do not put sale flyers or clearance inserts inside gift-recipients’ boxes!
  11. Evaluate your triggered or transactional email program. Are you sending confirming emails when someone registers as a new customer, opts in to your email list, and places an order? Do they receive an email when their order is shipped, and when it’s delivered? Do you send a request for a product review a week or two after their order has been delivered?All of these transactional emails can and should have some type of sales message to try and get another order from the customer. The message may or may not be promotional, such as a free or discounted shipping offer or a product discount. The message might be a new product announcement. Maybe it’s to remind gift buyers that their past year’s gift list is accessible online. Maybe it’s to generate interest in gift cards and e-certificates. If executed correctly, all of these can generate significant incremental sales at little to no added cost.
  12. Review your email plan for opportunities to increase mailing frequency and response.
    • Segment your email list just as you would a catalog mailing list—by buyer vs. non-buyer, and by last activity date, at a minimum.
    • Increase frequency to the most recent buyers. They can almost always support addition offers and contacts.
    • Do an A/B split on the file, and do perform holdout tests to measure the incremental revenue gain from the added mailings.
    • Use stronger offers for older buyers. For example if you are sending a 10% off offer, test the offer at 25% off for lapsed customers on your list. The added response might more than offset the margin hit you take from the bigger discount. Test it, and read your numbers!
    • Send a Hail Mary e-mail to those addresses of people who have never ordered and offer a steep discount.  Go as high as you can without losing money.  If you can convert these names to buyers, it’s incremental business.
    • Send several reminder emails alerting customers to impending expiration dates on sales and offers and for shipping cutoff dates for holiday delivery.
    • Send a thank-you-for-ordering email with an offer to anyone who appears to have ordered for the holiday season about a week or so before Christmas. It’s transactional but the point is to make your buyers feel special and incite another order. For example, ‘We want to thank you for choosing our products to give to others this holiday season. If you still need any last-minute gifts, we’d like this extend this special offer to you.’
  13. It’s not too late for newspaper remnant offers. These can be quite effective.  If you can get cracking on creative, have it approved and finalized by Thanksgiving, you’ll be ready for remnant placement the week of 12/5.

We know not every idea will work for every business but as always, the point is to keep pitching, promoting, mailing, emailing, and marketing. Hopefully these ideas will add some value as we all begin to search for last minute inspiration.

Warmest regards and Happy Holidays,

tony-sig

Tony Cox
President
5th Food Group