This report examines the on line Food market with a particular focus on the relationship between enterprises and the end consumer. The findings of this report are based on the examination of 241 companies, of which 79 actively participated in the study. The report shows that there are several major trends within the on line food market, especially in respect to the Producers, Distributors and Final Customers. The analysis is based on three fundamental on line strategies: The Brand, Customer Loyalty and Sales. In order to evaluate the feasibility of these on line strategies it has been necessary to study what are considered the most important tools in the use of the Net as an on line strategic factor. On line supermarket shopping is one of the most important segments of the on line food market, especially in terms of turnover, the number of transactions and potential future growth. The services provided by these companies were analysed against a range of 108 variables to ascertain their effectiveness and usability.
III- The Market
Distribution Channel Management
Relation with Public Administration
Advantages and Disadvantages
VI- Supermarkets on line
Ranking by turnover
Geographical coverage of on line supermarkets
Analysis of the Service
User perception of the site
User perception of the service
Consistency of the service
VII- Case studies
Case Studies of Italian Companies
Case Studies of Companies Abroad
IX- Illustrations' index
The B2C on line food market in Italy has led to a diverse range of business models. The main selling models are direct sales by the producers themselves, gourmet and top of the range products sold by intermediaries, and on line supermarkets. These models can be further broken down into sub-models, based on other significant differences, particularly in respect to the pick-up and delivery processes.
The results, while encouraging for some companies that trade abroad or distribute high quality produced directly, are rather disappointing. One example, above all: an average food outlet often has higher revenues than an on line supermarket. There are many reasons, but the main one consists of considering the Internet as just another distribution channel and not as a new model of business.
The use of the Internet as a distribution channel tends to make businesses focus only on some limited aspects, such as saving time, rather than product innovations or costs decreasing. Prices of products are normally the same both on line and off line. As later illustrated in this report, FreshDirect is a very good example of this business model. The use of the Internet clearly provides certain advantages, but it does not produce economies of scale if used in conjunction with the traditional distribution models, and instead it produces further costs.
The major reason businesses have decided to go online in Italy is to improve their brand visibility (as indicated by xx% of the interviewees). xx% of the companies stated that they decided to provide services to their customers through the Internet, in order to improve customer loyalty. It should be noted that xx% of the businesses currently online see the Internet as a new selling channel10 .More than a third of the largest Italian distributor groups are experimenting with selling online, in some cases using the own brands (e.g. Esselungaacasa, e-Coop, Pamacasa) while others use a different brand (e.g. Volendo from the Lombardini Group and Spesa online from Despar).
In the year 2000, everybody thought everything would have been fast, but technology is faster than culture – Spesa online Brand. The survey results showed that, the majority of online food companies interviewed (xx%), have positioned themselves on the Internet in order to improve brand notoriety and innovativeness. Online market research, creating questionnaires and surveys, or the use of games, makes it possible to profile and map the tendencies and needs of the market. Lavazza has integrated television commercials with its site paradiso.lavazza.it. This web site allows users to play games and answer questions about preferred flavours and product characteristics. Creating a brand experience online communication must be integrated within the communication strategy of the business. This is to strengthen the companies brand and avoid damages to its image. Granarolo created its own site to conform to sustainable criteria (with information on sustainable techniques), territoriality (demonstrating regional qualities) and transparency (improving management visibility). San Pellegrino is presenting a project about the history of the company will publish the history of the company in an online museum. Maintaining a consistent brand the Net has the ability to amplify brands for certain population clusters.
Therefore to take full advantage, the quality and the characteristics of companies’ communication strategies have to be incorporated within the Internet communication strategies. Often companies tend to consider this as a technological issue rather than a communication problem, thereby delegating technicians to manage their communication strategies. The lack of brand consistency does not allow the brand to be amplified and thereby damaging the brand itself. Characterizing the brand by supplying ad hoc services the most effective method for distinguishing a brand is to associate it with a service which can be promoted, used and remembered by the customers. Coccodì, for example, has a current online project aimed at improving the transparency of their egg tracking system. In fact, the 11 digit alphanumeric code imprinted on the packaging is only understandable by employees handling the products. Customers that get to know this service will remember the brand and associate it with the characteristics of high transparency and quality. All figures are provided in the full report.