Direct-to-consumer channel offering unique insights to seafood firms
A growing number of consumers had already been embracing e-commerce shopping over the decade leading up to 2020, according to Gray Growth Logistics President Richard Gray. Then came the COVID-19 pandemic.
Widespread lockdowns and social-distancing measures implemented to help curtail the spread of coronavirus in 2020 prompted U.S. consumers to seek perishable foods online with unprecedented fervor, Gray said. With their traditional business channels shored up almost overnight, seafood companies also turned to the digital space in search of opportunity.
“With the advent of COVID, the seafood, retail, and foodservice business suffered some interruptions and many firms during that period started to test direct-to-consumer,” Gray, a leading strategist in global direct-to-consumer marketing and business model development, told SeafoodSource.
As the world moves closer to a post-pandemic reality, Gray said interest in direct-to-consumer and omnichannel models remains strong. Seafood firms that have ventured into the territory have found “an excellent outlet for creative sales, testing new items, and getting rid of close-outs and slow-sellers,” he said. They’ve also established unique bonds with their clientele and gleaned new information about them, Gray added.
“Companies that sell perishable foods directly to consumers will develop a strong relationship with their customers through email addresses, phone numbers, and purchase histories. This strong relationship can lead to repeat sales and subscription programs that encourage customers to re-engage and develop brand loyalty,” Gray said. “When you sell direct-to-consumer, you have data. You can get to know who the person is, you can model them, you could look for other people like them, etcetera.”
An “integrative revenue stream that should be part of an omnichannel business model,” a direct-to-consumer platform requires a strong digital presence, Gray explained, noting that to fully leverage online sales in the space, seafood firms have a number of options at their disposal, including digital sales, email lists, third-party websites, social media, and influencer marketing.
“With the digital sales method, a producer will advertise products for sale on platforms such as Google and Facebook. These digital marketing methods steer potential clients directly to an e-commerce website where the consumer can learn about ultimately purchasing the product. We love Shopify as our website ecommerce platform of choice,” Gray said.
According to Gray, what tends to work best with email lists is “a combination of monthly promotion e-blasts, along with automated flows, such as a ‘Welcome’ series or ‘Abandoned Cart’ flow.”
“These emails contain offers, calls to action, and links that direct consumers back to the website or specific landing pages to complete a purchase,” he added.
When selling perishable foods directly to consumers online, companies can use third-party websites like Amazon, Gray said, adding that while the e-commerce giant doesn’t offer fulfillment for frozen or refrigerated items, firms can use a third-party logistics provider to deliver on their Amazon orders.
A robust social media presence for a seafood supplier in the direct-to-consumer arena is “practically mandatory in today’s environment with any brand worth their salt having a strong social media presence,” Gray said. Partnering with influential “individuals and/or brands that have a strong internet presence, particularly on social media, but also via blogs and email lists” is another worthwhile strategy in the direct-to-consumer space, he added.
“These content creators can promote your brand to their following in exchange for product or for a fee. It’s a great way to leverage the trust and credibility these influencers have with their followers to get you sales,” Gray said.
Building a supply chain that can support selling seafood to consumers is imperative to channel success, Gray noted.
“It is important for companies to tailor their supply chains to meet their specific needs. For example, fresh and frozen foods are not the same. Fresh foods encompass a wider range of options and usually have a shorter shelf life when compared to frozen foods, which can be easier to transport due to the greater shipping flexibility,” he said.
The pursuit of direct-to-consumer sales isn’t a good fit for everyone, however, especially those firms that don’t have time to dedicate to the process, Gray added.
“You’ve got to have a long runway for this. It doesn't have to be a money-eater, but it has to take time, because it's an iterative process of advertising, learning, getting feedback, customer feedback. It's something you build over time, but you don't spend a lot of money before you get your benchmarks, and you hit them,” he said.
On the chance that the channel doesn’t pan out quite like a company hopes, Gray said silver linings still exist.
“Let's look at the downside. It's not working well. What else does it do for a company? They test products, they test price points. They get consumer feedback that they don't get from retail or foodservice. They have a dialogue. They can look at new packaging and new ideas,” Gray said.
For companies that are successful, direct-to-consumer business comes with a low cost of entry, repeat sales through subscriptions, a quick way to get food to the market, a streamlined process, high-margin sales, a scalable channel that works well with others, and a way to bring non-local foods to market, Gray said.
As for seafood products that sing in the direct-to-consumer realm, Gray recommended that suppliers lean on premium items.
“The more expensive the fish, the better suited for direct-to-consumer. Commodities don’t fly,” he said.
For more information about direct-to-consumer strategies for seafood businesses, Gray’s new book, “Appetite for Convenience: How to Sell Perishable Food Direct to Consumers,” is available online at Amazon, Barnes & Noble, Walmart, and other digital retailers. Interested companies can also direct their inquiries to the Gray Growth Logistics website.