Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.

Monday, March 23, 2009

Date of publication: Feb. 26th 2009
Author: Kristen MacFarlane
Publication: New Zealand Herald

The article The Truth about grocery shopping online by Kristen Macfarlane looks at the latest online shopping venture “Food Direct” and its emergence into the current market place. Food Direct is an online shopping website that offers specialty foods, fresh meat, produce and gourmet products at a competitive price. Grant Curran is the man behind the production which started in 2008 and believes its growing success is due to the fundamentals of the business and his own ethical standards that he has incorporated into the companies values.

One of these values include Curran’s eco-friendly attitude, all your food comes in oxo-biodegradable bags and is delivered to your doorstep in an energy efficient van. The products that are offered are also sourced from local farmers and markets. Curran being a dedicated foodie himself, places great care into the quality of the products that he delivers and aims to put “high quality fresh produce in arms reach for families”. Food Directs target market is someone who has a passion for food and appreciates quality, affordability and convenience. Curran attracts his market through differentiating his business from other online services by incorporating his own set of standards into the products and aligning these standard and values with his target markets. An example of one of these standards is that his products are sourced from local farmers and markets on a daily basis to ensure consumers are getting the best quality while supporting other local businesses.

Food Direct’s retail value proposition is therefore price, quality and experience. While quality and experience often accompany each other, price and quality often do not especially if gourmet products are involved. Many online shopping websites have struggled to succeed in the past. The ones that have succeeded in New Zealand often focus on one product that is bought in bulk, have a long shelf life and the product shape and size are well understood e.g. wine or coffee(note 1). They are also geared to discerning buyers who gain significant price benefits.

Food directs is competing with major supermarket chains that have an online service offering a broader range of products. Price differentiation extends only to brands and not necessarily to the product thus it is too early to tell if Food Direct can compete in this more complex market, but if growth continues at the rate it has been in the past food direct looks to have a positive future.

Note 1. http://www.blackmarket.co.nz/terms.asp

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