INTERNET & CATALOG MARKETING FOR SPECIALTY FOOD COMPANIES

In the last few weeks we have been getting calls daily from clients and friends in the specialty food industry asking how the season’s going for others, what do we hear out there, how is this season shaping up, and what else can still be done to drive more volume this year?

In response to all of those inquires, we wrote this special two-part edition of the Food-by-Mail Industry Update. In Part 1, we will summarize current trends and response data from the first 11 weeks of the holiday 2006 season.

Next week in Part 2, we will present several recommendations for late-season promotions and programs you can implement to drive additional orders, sales and profits.

Season-to-date Trends

Below are the highlights of our compiled response data from several of our clients and other mail order/internet marketers of specialty food.

1. The season started very strong for most food catalogers.

1. September’s order volume rose 17% over 2005. However, September and October 2005 were very soft months due to Hurricanes Katrina and Rita.
2. The first three weeks of October were very robust, with order volume up almost 30% compared to the same period in 2005.
3. The last week of October and the first week of November saw order volumes plummet for most of our clients. This is typical just before an election (it happens every time!), and yet it caught us all a little off guard—again.
4. So far sales have not bounced back after the election.
5. At this point, we don’t see any clear signs indicating how the season will end—some clients are starting to trend up and others are trending flat. Therefore, it’s more important than ever to have extra promotions and programs ready to launch on short notice if your order volume does not begin to pick up.

2. Based on last year’s order curve, as of the end of the second week of November, the season was 23% complete. What does that mean?
   
   Simply stated, take the orders you have in the door from September 1 through the second week of November, divide them by .23, and you will have a reasonably close estimate of how this season will shake out for you—assuming that you have not made major changes to your mail dates and circulation levels.
3. Last year, the half-life of the season (i.e., half of the orders were already in and half were still to come) was the end of the first week of December. In other words, in the September-December holiday season, December makes up 50% of the total.
4. We see this half-life point getting later and later each year. For example, four years ago, the half-life of the season was the third week of November.
   
   As people order closer to need, and we (mailers, internet marketers and retailers) reward them for late ordering with better deals closer to Christmas, decent on-time delivery records for last-minute orders, and now e-certificates, this year the half-life may creep back to the second week of December.
5. So far this season we are seeing more catalogs with promotions. Last year at this time, only 40% of the food catalogs we received had any type of promotional offer. This year, 60% of the food books had offers.
6. We believe the highest web traffic day will be “Cyber Monday,” which is the Monday after Thanksgiving. The busiest web ordering days will be Mondays, December 4 and 11, and your published cutoff day for guaranteed Christmas delivery.

Summary

• We believe food mailers are going to have to fight for every order they get this season.
• There will be a continuation of the trend for later holiday shopping by consumers. Therefore, we may not know until the third week of December how this season will play out.
• Customers will continue migrating to the web, which reduces some of the pressure on call centers and overall operations, and helps lower fulfillment expenses.
• Companies that have promotions and offers in place and ready to pull out of the hat on a moment’s notice will likely garner a larger share of the pie than more passive marketers.
• To get your fair share this season, you will need to be ready for more last-minute shopping than ever before this holiday season.

Next week will conclude this two-part series of the Food-by-Mail Industry Update with several ideas, promotions and programs you can execute quickly and at little cost to maximize your last-minute selling opportunities.

Catalog Solutions/5th Food Group helps specialty food catalogers and internet marketers grow and make more money by developing, managing and implementing their mail order and online marketing programs. We are the only catalog/internet marketing consulting firm that works exclusively in the specialty food industry. Helping smaller companies or large companies with small mail order or internet divisions is what we do best.

Visit us online at CatalogSolutions.net to download a copy of our free booklet, The Seven Habits of Highly Ineffective Catalogers, and for information on our fully guaranteed introductory program called JumpStart.

WILL YOU BE ATTENDING THE FANCY FOOD SHOW IN JANUARY?

Mo Frechette, my friend and client of Zingerman’s Mail Order fame, and I will be co-presenting a workshop titled, 10 Steps to Increase Website Sales and Profits. The workshop with be held at the show on Monday, January 22 from 8:30 to 10:00 AM. For more information, visit the NASFT’s Web Site. We’d love to see you there.