A direct-to-consumer strategy can often work in conjunction with a specialty food or beverage brand’s grocery initiative. Ori Zohar, co-founder and co-CEO of Burlap & Barrel, a single-origin spice company working with smallholder farmers, walked through his company’s journey from DTC to retail and explored the tactics he learned along the way in the recent Maker Prep webinar titled, "Perfect Pairs: How DTC & Grocery Can Support Each Other."
Zohar explained the differences between DTC shopping and grocery shopping, then demonstrated how they can be mobilized to facilitate the shopper in multiple situations. Some of the product differences fall into categories such as shopping style, environment, product set, and selling style.
For Burlap & Barrel, DTC shoppers need to purchase larger basket sizes than at retail.
“We offer a minimum order value of $45 for free shipping. That’s not a big problem when the economy is kicking; however, if things were to take a dive, I think orders will shift into grocery where there are small baskets and one-off purchasing,” said Zohar. In multiple economic states, both DTC and grocery can work together to ensure consistent velocity.
Online, a brand can immerse the consumer in its mission and product line, whereas in retail, the brand needs to consider more about how the product competes with the category.
“Your website should feel like a custom-built experience. There is a ton of apps to get there; you don’t need to spend a ton of money on developers,” he said. He offered examples that can engage customers like links to the brand stories and recipes that can be both in article and video form.
By driving potential shoppers to a clean website, a specialty business can learn more about its consumers with easier access to information like basket sizes, conversion rates, etc. Brands also will get the opportunity to showcase what makes their product special. “People are often looking for evidence to justify spending more on your brand. Prove it to them,” he advised.
In DTC as well, a brand can offer limited runs, small batches, and experimental products because it’s not taking up shelf space, whereas retail relies on best sellers and a broad appeal. It also allows for the opportunity to test new products on a smaller scale before trying to commit them to a retail location. Zohar warned that learning about which products in your line work better or worse in retail can be very expensive so leveraging a DTC audience can help to streamline that process.
By using both services, a brand becomes less limited by the factors that would inhibit conversion in each channel: through DTC a brand is not limited by quantity, space, or price point, and through retail, a brand is not limited by shipment barriers and can appeal to a different type of shopper that wouldn’t go out of their way to get a specialty product online.
To learn more about how DTC and grocery can work together to drive sales, watch the webinar on demand in the SFA Learning Center.
Related: Leveraging DTC and Grocery: Q&A with Burlap & Barrel Co-Founder; Simpactful’s Borselli Shares Tips for Building a Sales Team