Thursday, December 22, 2011

Educate Yourself Before Setting Up Religious Food Displays

Christmas, Kwanzaa, and Hanukkah are some of the biggest holidays in December and are associated with special foods. If you want to set up a display in your store dedicated to a religious holiday, be sure to educate yourself on what foods to include and not to include.

By not doing some research before setting up a religious food display, you may offend followers of that religion like Whole Foods and CVS did this year. In the article "Whole Foods, CVS Confuse Jewish Holidays With Incorrect Displays", author Rachel Tepper describes how these 2 stores messed up:
*Whole Foods displayed matzoh- an unleavened bread traditionally eaten during the week of Passover, not Hanukkah.
*CVS made a display showing an image of shofar and pomegranates- items associated with Rosh Hashanah, not Hanukkah.

As an food or farm business owner, have you ever set up a religious holiday-based food display? What were customer reactions? Do you have any tips for other ag entrepreneurs?

Friday, December 16, 2011

'Human Interaction' Making a Comeback

Shopping in a large grocery store doesn't give customers much interaction with store employees. This way of shopping has been popular for a long time, but according to a survey conducted by Adaptive Path (a design firm focusing on customer experience), customers are now looking for a personal experience in their shopping.

Peter Merholz, president of Adaptive Path, says that consumers want "low-key, face-to-face interactions with merchants". Evidence of this can be seen in the decline of self-checkouts and the rise of food trucks and farmers' markets. The Food Marketing Institute reports that in 2007, 22% of grocery store orders in the US were paid at a self-checkout. In 2010, that number dropped to 16%. Agricultural Marketing Service reports a 53% increase in the number of farmers' markets from 2008 to 2011 (as seen in the graph below).




Merholz also said, "In our increasingly connected world, people crave authentic human interaction, and the future of retail is going to look a lot more like it did in the more distant past and a lot less like the bureaucratically driven mass consumerism we grew to expect in the 20th century."

article

Sounds like great news for ag business owners! Do you feel that your business succeeds because of the human interaction? What kind of feedback do your customers give you about "having someone to talk to"? Are there any groups of people (women, men, seniors, married, no children, etc) that you think enjoy the human interaction more than another group?

Three Things I Think I Know About Local Food Systems

If you follow me on Twitter (@jeffhyde) or are Facebook Friends with me, you may know that I recently attended a Forum to discuss Regional Food Systems with about 40 colleagues from Land Grant Universities in the Northeast.  The Forum was wonderful, bringing together many different people from many different states with many different sets of expertise; economists, plant pathologists, nutritionists, food scientists, horticulturists...  The meeting helped me to solidify some of my thoughts on the topic. Here's the top three things I think that I know....

1. The Customer is Always Right
This is the version of the Golden Rule in which those who have the gold make the rules.  At the end of the proverbial day, the consumers have the money that drives the system.  Over time, the distribution system in the US has focused on providing a diversity of food products at relatively low cost.  Economists who study trade, including international trade, talk a lot about exploiting "relative advantages," making all parties better off if we trade.  That argument applies to any scale of the problem, including global trade.  So, it's no surprise that the distribution system doesn't support local food distribution very well.

To really change the system, it's going to take a willingness on the part of businesses and/or government to step in and modify the food distribution system.  Most of the arguments for this focus on government intervention, which is understandable.  In the long run, though, it will take private investment to sustain it, even if it happens initially as a result of government policy.  Private businesses absolutely would be willing to modify the distribution network if there were increased profits to be made in doing it.

In my opinion, the customers must be willing to pay higher prices for some foods if a distribution system is to develop in order to support a more robust local food system.  While some consumers have shown a willingness to do this, most have not.  Therefore, I think this is unlikely to happen any time soon.

2. There Are Opportunities to Innovate in the Middle
It's no secret that a farmer can recover more of the consumer dollar if he or she is able to "eliminate the middle man" on some functions.  For example, selling at a farmers' market eliminates one or more "middle men" that provide food distribution services.  I regularly tell farmers that this extra money isn't free.  The farmer must bear the cost associated with those functions that are being replaced.  One of the Forum participants told a story that made this point clear, describing one farmers' fatigue of harvesting in the early hours, packaging it, transporting to the farmers' market, selling all day, closing down the booth, driving home, handling the business's Facebook page, and then getting up early the next day to do it all over again.  That farmer is now considering a significant scaling back of the marketing function in order to deal with burn out.

In my experience, stories like this aren't unique.  There are "points of pain" in the local food distribution network that provide opportunity for entrepreneurial action.  Distribution, aggregation, processing, packaging, and marketing are all things that "middle men" do.  Maybe we need more middle men if the local food system is to develop and be sustainable.  I believe there are entrepreneurial opportunities to be explored here.

3. There Are Opportunities to Innovate on the Farm
I'm not blue in the face yet, so I better keep saying it... There are opportunities for almost any farm business because consumers demand diversity.  Because the customer is always right, farm and food business owners have to understand these customers and how to meet their needs.  That, after all, is the heart of marketing!

In my opinion, entrepreneurship is the key to long-term survival in agriculture.  Understanding what you can do to meet consumer needs and be profitable/sustainable is critical.  The entrepreneurship research literature is filled with various theories and case studies about this, but it's almost universally accepted that successful entrepreneurs consistently figure out ways to address needs for those who can pay for the solution.  This may mean developing new food products, growing different crops or livestock, opening the farm to the public, or many other options.  So, all in the food system need to keep an eye on their industry, looking for opportunities to innovate.  Consumer demand for local food creates opportunities, but great skill is needed to seize those opportunities and make money from them!

I'm always interested to hear others' thoughts about local food systems and how they can be developed and supported.  Comments are, therefore, welcome!

Thursday, December 15, 2011

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part III

In this final installment of discussing cross promoting I've suggested thinking about hosting events with complementary businesses and how this partnership might "cost" businesses involved in such a venture.

Hosting Events Together

Though one business may develop the vision for an event the responsibility of coordinating and implementing it needs to be shared. There are advantages that two or more establishments provide and gain by working together.  For example, if an event’s focus is outdoor entertaining the retailer may be interested in pairing up with a local winery or specialty food retailer. Another complementary business could be a local florist.

Allow time for a series of demonstrations, such as meal preparation using value-added processed foods, home entertaining, and flower arranging. Both businesses should also provide goods that could be included in gift baskets for sale, raffle, or door prize.
             
Considering Your Costs

Cross promotion cannot be implemented without certain “costs.”  Some of which include:
·    how much complementary product should be used in displays,
·    whether or not the shelf or floor space will be provided for free or if the space will be rented,
·    what discounts to apply if customers buy a combination of products offered by both businesses,
·    how advertising and promotional costs will be shared,
·    how many times during a season or year each business will agree to provide information for blogs, newsletters, etc. and the number of feature articles each business will write, and
·    how staff will be allocated for events and activities, if one business provides space for the event what the other business will offer in compensation.

Additionally, staff should be educated about the complementary products, how to use the item, benefits for customers, and related.  Staff should be able to answer basic questions about why the businesses are cross promoting each others’ product and provide customers with at least an introduction on how to use the products. 

These are just a few possibilities for cross promotion and obtaining access to new customers.  Your decision will ultimately depend on the amount of time you and your staff have available, your budget, business goals, and facilities available.  There are tradeoffs to consider; however, working together can provide benefits for your business and customers you serve. 

Monday, December 12, 2011

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part II

       This posting, the second in the cross promoting series, focuses on how to join efforts with complementary businesses to communicate with your customers and theirs.

Newsletters and Blogs

How do you currently communicate with your customers?  Whatever methods you use to inform and remind customers about your business or persuade them to buy your products, there is at least one way to cross promote each others’ products and expertise.

With the number of garden centers who have a blog, newsletter, or other publication that they publish on regular basis it is highly likely that the person writing these pieces often has to find items to write about.   Short pieces can alert readers about the complementary business or a new product they are offering.  Feature articles can describe how products from both businesses could be incorporated into new gardening trends or an upcoming event that the two businesses are co-sponsoring.  Do not forget to include the complementary business’s logo, URLs or hyperlinks to their website, and contact information.

Also, invite the other business to write a newsletter item or be a guest blogger.  Suggest a topic so the guest writer has some direction as to what your readers might be interested in learning and that would meld well with other items you are including in the newsletter or blog.  

Your Website, Facebook, and Twitter

Your website is an ideal outlet for cross promotion activities.  Use space on your website to inform readers about complementary businesses you cross promote with and provide space for their advertisements.  If customers sign-up for your newsletter online provide an option that would allow them to sign up for other businesses’ newsletters or add a link that will take them to the other businesses’ online form.

When it comes to Facebook, make sure that you “like” business you cross promote with, post images of events and activities both businesses implement, include links to articles, and mention each other in postings.  Tweets you publish on Twitter should also mention your cross promotion partners.  Include these businesses in your #followfriday (#ff) tweets (a strategy used on Fridays to suggests to your Twitter followers who they should also follow) retweet (forwarding another Twitter user’s tweets to your followers) appropriate messages, publish tweets when you add their products to your displays, and similar.   Inform your customers about joint activities while reminding them about your business.

Until next time when I’ll present ideas on how to cross promote with other businesses to host events and some of the costs to consider when entering into this type of relationship.

Thursday, December 8, 2011

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part I

           With consumers desiring outdoor living spaces, complete with lighting and kitchen components, and baskets filled with wine, assorted cheese, and other food and non-edible items always proving to be popular gift items, how can ag. retailers provide such items when they do not stock and sell all the components?  One idea is to partner with business owners who sell complementary goods and services, thus the two businesses work together to help customers obtain a complete “package.”  

           Promoting goods and services offered by business owners you have an existing and trusted relationship with takes the guess work out of where to direct customers and your recommendation also helps reduce the risk for your customers.  Such a situation, known as cross promotion, is based on two (or more) businesses working together towards a common goal.  

        In this blog posting I’ve presented ideas for cross promoting in the retail space, but over the next couple of posts I’ll provide examples of how retailers can cross promote in other ways.  When cross promoting works, efforts coordinated with a complementary business provides certain benefits:
· expanding your customer base,
· greater reach with promotions and advertising,
· reduced marketing costs, and
· increased profits

Putting Items on Display

        Displaying items produced or sold by complementary businesses is one cross promotion strategy.  You may already have relationships with business owners who produce or sell items that would complement what you offer, but what if you do not?   What goods and services could appeal to your customer based on their demographics, behaviors, and interests?  If you do not already sell items like bath and body products, jewelry, specialty foods, place settings, or the like, search for businesses that do.  Once you have assembled a list, learn about clientele they serve, search for reviews customers post online about their shopping experiences, and investigate as much as you can about their business practices before requesting to meet.  Just as you put thought into developing a relationship with a new vendor the same amount of consideration is required when selecting a business to cross promote products.  

        Signage placed next to items should include a description of the product as well as information about the complementary business (e.g. business history, other available products, contact information) and an explanation as to why the product is so unique that you decided to display it in your store.  Don’t forget to ask the other business to reciprocate by incorporating select products you offer into their displays.

        The possibilities of what type of businesses to cross promote with are endless.  Displaying complementary items together is just one step, in the next few postings I’ll provide examples of how to cross promoting when communicating with customers and when hosting events, as well as the “costs” to consider before committing to this partnership.

Tuesday, December 6, 2011

Mobile Payment: A Direct Marketing Tool

The Penn State Extension Ag Entrepreneurship team, along with Ohio State and Minnesota Extension, have developed a series of webinars on social media and mobile technology for ag businesses (more information on the webinar series at http://www.cvent.com/d/lcq890).  These issues are especially pertinent for direct marketers who are rapidly finding that they need to engage their customers using these tools.

One of the webinar sessions will focus on mobile technology available for use by farm markets, farmers markets, roadside stands, and agri-tourism businesses to accept payments.  Chris Raines, Assistant Professor and webinar team member, was motivated to learn more about mobile payment following his own mobile payment experience when getting take-out.  So he purchased the needed attachment for his iPhone and tried it out.  Check out his blog post on his experiment and thoughts regarding mobile payment possibilities for direct marketers.