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e-Commerce: Marketing Tool or Revenue Producer?

by Suzanne Brown

Whether you are a grower, exporter, importer, broker, roaster, or retailer, the Internet offers an infinite channel in which to market your coffee and tea services. Quite frankly, society doesn't even know the benefits yet; we have just begun to scratch the surface. One thing is certain, however: no matter where we are in the process of building an Internet presence, we must be there.

Here are some statistics that support online sales. Jupiter Communications, an media company specializing in IT and new media, expects online sales to rise 53% this year, from $15 billion to $23 billion. According ActivMedia Research's study, "Capture Online Markets," mainstream consumers are looking to the online marketplace for traditional offline products such as consumables, clothing, sporting gear, office supplies, and games. More than half of all U.S. adults are using the Internet. Women now make up almost 50% of the online population, and account for some 52 million users.

Consider this: World population now stands at 6 billion. The Angus Red Group, a Canadian polling organization shows 300 million people are now wired around the globe and that one billion will be on line by 2005. The top three online activities are research, shopping, and Web surfing. In addition, almost half the nation's adults say they have shopped online while at work. In fact, research now shows a growing trend of companies allowing employees personal online access during certain parts of the day as a company "perk."

What does it take to successfully sell on the internet? According to J.P. Morgan Securities, Inc., the best-of-class e-tailers share certain attributes: first-mover advantage; large market opportunity; recurring revenue streams; strategic partnerships; multi-faceted management team; and a web site loaded with "the 5 c's," content, community, customization, commerce, and customer care.

Let's take a look at several business to consumer (b2c) or e-tail companies that are using the internet as an extension to their bricks and mortar stores. First, Seattle's Best (www.seabest.com) has transferred their bricks and mortar concept to the web by offering customers a line of products from their online store. Visitors click into the internet coffeehouse and see an assortment of gifts and products, as well as a coffee club. The overall view gives consumers a quick glance of products, which hastens the purchase process. Remember, three clicks is the rule of thumb when trying to reach the area of the site you are searching. The homepage of Seattle's Best allows their foodservice customers to click onto Aramark's web site to make direct purchases. As Seattle's Best moves into Asian markets, a big opportunity lies in translating their web site into the languages of those areas.

Producers who wish to establish their brand name and sell coffee directly to consumers in the U.S. have a huge potential. An example is Café Britt (www.cafebritt.com) who sells to consumers with their 800-number, which goes directly to the farm. Consumers can have their order within one week delivered to their door by DHL. The internet enables producers to take consumers directly to their farms through virtual tours offering education and information about their country and harvest. The result gives consumers a birds-eye look at the work involved in producing a cup of coffee and leaves a perception of purchasing fresh, high quality coffee.

Bucks County Coffee, a regional roaster/retailer based in Bucks County, Pennsylvania, is ramping up their web site to include a new e-commerce product that will create a secure registration and ordering process. Security features are a primary consideration when selling products on the internet. The company's president, Rodger Owen, stated the original objective when the site went "live" over a year ago was to enhance company image. Now Bucks County Coffee will be focused on sales and service," he stated.

While Seattle's Best, Café Britt, and Bucks County have utilized the Internet as a marketing tool, www.sterlingmoon.com is a virtual coffee company whose purpose is to make money with their web site. So far, according to owner Anthony Jones, they are doing just that. With no bricks and mortar locations, Sterling Moon uses a private label roaster, and fills orders from their 2,000 square foot basement. Jones reported they are so pleased with the results that he is branching into another web site to address the youth market. He plans to sell lower priced coffee using a theme with an image somewhere between South Park and Disney. He is targeting the web games market and plans to install his own server. Currently, Jones plans to launch this site in September.

So what are some tips for creating these successes? Here are a few proven solutions from the experts:

  1. Easy navigation through the site to products you want.

  2. Start a two-way conversation (this is created through asking customers their opinions, and creating chat rooms and bulletin boards).

  3. Low prices may initially attract customers to your site, but isn't a guarantee they will come back. In fact, a survey conducted by Primex Solutions reported 71 percent of online shoppers regard price as their most important decision-making factor in making initial purchases.

  4. A secure site on which to make purchases without the fear of being subjected to loss of privacy.

  5. On-time delivery respecting timeframe customer needs

  6. Accurate delivery, a crucial part of any product service

  7. The convenience of having a Roast to order

  8. "Order Now" button on every page

In the end, the e-tailer's brand must drive the end-user experience, and that includes all facets of a site, from overall design to functionality. Now, what to avoid? Here are the biggest mistakes reported by experts:

  1. Having a customers go through more than 3 clicks to find what they're looking for.

  2. Slow order-processing speed at sites

  3. Poor site performance

  4. Technology doesn't keep up with competitors

  5. Obvious low budget site

  6. No registration form

  7. Confusing instructions such as language, button directions, purchase selection and shipping information
So now that you have an awareness of solutions and mistakes, what about getting the word out? How do you let people know about your site? Marketing your site is the greatest expense. In future columns, we will discuss this issue in depth, but to start, here are some categories for consideration:

  1. Strategic Partnerships - If you're a roaster, look for other opportunities besides your own site to sell your coffees. For example, www.GreatCoffee.com is a broker-on-the-web, which offers coffees from many different roasters.

  2. Databases - Create your own database through your secure registration. You can also rent or buy CD-Roms with lists containing the demographic information of customers you wish to reach.

  3. Newsletters - Send out weekly newsletters to customers, offering tips and specials.

  4. Targeted e-mail marketing - Using your database information, seek permission from prospects on whether to send them a newsletter, coupon, or other information. Invite prospects to visit your site for discounted products.www.blindgift.com or www.tavalo.com.
  5. Banner & Button Ads - Start by contacting sources such asTea & Coffee Trade Online (www.teaandcoffee.net) to place your banner and button ads on their site.

  6. Advertising & Public Relations - Public Relations is less expensive than advertising. Start by building brand loyalty through your community. Provide informative features, include customer testimonials, and offer online chats. Advertising is much more expensive. For example, to offer your products on a Yahoo or AOL site, contact each portal for specifications and rates.

To stay current in this fast paced Technology Age, subscribe to several free online publications. Start with www.bizreport.com, www.ecommercetimes.com ,www.ActiveMediaResearch.com and www.Forrester.com There are free newsletters and press releases on each of these sites. Moving forward, we should apply the sustainability criteria to the internet: build a quality site; apply the best practices; move slowly; implement flexibility; take care of your customers; and prepare for change.

Tea & Coffee - June/July 2000

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