Food DMer Opens Home and Gift Line

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Only a month after introducing a mail-order and Internet business for gourmet cuisine, The Schwan Food Company will use the strength of its catalogs to drive consumers to a new home and gifts Web store.


The pitch is included in 6 million catalogs handed door-to-door when Schwan's personnel work their biweekly routes to deliver food orders nationwide. Another 1 million books go to consumers who call the toll-free line to request a catalog or place orders.


"It's a way for us to drive our offline customers online to change their behavior," said Glenn Bader, director of Internet and advanced technology at Schwan's Home Service-West.


Distribution begins the week before Christmas. A stapled insert in the 80-page January-April catalog draws attention to the savings on brand-name merchandise.


Every dollar spent at www.schwans.com/homeandgifts or by calling 1/888-SCHWANS earns a reward point. The site goes live the week of Christmas, and Schwan's is offering two points per dollar spent before Jan. 31. Shoppers can redeem the loyalty points for cookware, dinnerware, bakeware and small appliances. The store will have 100 products.


Based in Marshall, a town of 13,000 in Minnesota, Schwan's is the nation's largest branded frozen food firm. It derives a large chunk of its estimated $3 billion to $4 billion annual revenue from door-to-door delivery via its trademark yellow trucks.


Schwan's also sells consumer brands like Tony's, Mrs. Smith's, Edwards, Freschetta and Red Baron to grocery stores.


The intensified move online, which comes a month after the debut of the site at www.impromptugourmet.com, is part of a pattern to go direct in a more cost-effective manner.


In addition to a logistical advantage for Schwan's to get the consumer order in advance as opposed to aggregate orders when trucks visit neighborhoods, there is a gain from the online shopping behavior.


"We see a 10 percent to 12 percent increase in customer purchases if they order online," said John DeVos, vice president of alternative channels at Schwan's.


From what the company has seen since its late 1990s debut with e-commerce, customers are more inclined to buy online. Schwan's best customers order 16 times a year through the door-to-door service. When shopping online, the order frequency rises to 18 times a year.


But Schwan's knows not all its customers have Internet access, thus providing the reason for extending the loyalty program to the phone as well.


Founded 51 years ago, Schwan's now looks to the Internet for growth. These recent initiatives are part of more to come. Efforts to build an online database or at least attract attention are working.


For instance, the Gourmet Givers Sweepstakes with a top prize of a dinner for 20 has drawn 150,000 entrants as of Nov. 26. Schwan's intends to build a new base of customers, particularly in New York and Chicago, for its higher-margin gourmet meals.


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