OmahaSteaks.com Beefs Up Service for New Markets

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Omaha Steaks makes no bones about its Internet ambitions: It wants to dominate the branded beef, meal solutions and gourmet food gifts segments online.


The direct marketer has begun talks for a series of marketing partnerships between likeminded companies and OmahaSteaks.com Inc., its fastest growing division that was recently spun off and anointed with a separate president.


"In the case of the core Omaha Steaks product, OmahaSteaks.com becomes a new sales and marketing channel," said Todd Simon, senior vice president and part owner of OmahaSteaks.com. "The consumer has already embraced our brand promise offline and now they're looking for it online."


Based in Omaha, NE, the privately held Omaha Steaks sells beef cuts, poultry, seafood, appetizers, desserts, gifts and condiments. It recorded combined 1999 revenue of more than $254 million. The online arm's sales were not disclosed.


Attracting traffic to an upgraded OmahaSteaks.com now is a top priority as the Web site gears for a relaunch that reflects its growing offerings and expanded role in the Omaha Steaks family.


Out-of-the-box marketing alliances play a key role here. Discussions are on with garment maker Joe Boxer and Cooking.com for "fun promotions." This could include e-mail cross-promotions between OmahaSteaks.com and JoeBoxer.com databases with barbeque themes and similar traffic-driving efforts by Cooking.com.


Simultaneously, OmahaSteaks.com will continue its relationship with Share Our Strength, an anti-hunger organization that gets a donation from the marketer from certain promotion-related sales.


"We're also looking at working with traditional catalogers to promote the dot-com [business] through package inserts and product inserts," said OmahaSteaks.com spokesman Sharon Bargas, adding that this time is the first Omaha Steaks will partner with catalogers.


This year, again for the first time, OmahaSteaks.com will send direct mailers to the loyal among 1.2 million customers who buy Omaha Steaks products via catalog, fax, telephone, Internet, company-owned retail stores and through corporate sales. This drop will coincide with Father's Day in June.


At the same time, the marketer won't neglect the usual marketing blandishments: the OmahaSteaks.com Web address on all company packages and communications, cross-promotions between the various Omaha Steaks channels, partnerships with portals, ad banners on sites, buys in mass media and e-mails.


While this marketing activity is underfoot, the 5-year-old OmahaSteaks.com itself is in for a major makeover. Early tweaks include improved search abilities and expanded merchandising, additional special gift centers and increased membership options.


To boost the online experience and bolster trust, the site will allow real-time order tracking and increase interactivity for customers in search of recipes and answers for cooking issues.


"The strategy is to build a compelling, sticky experience that will draw food lovers and steak lovers, people who like to entertain and people looking to send gifts," Simon said. "We're going to make it so insanely easy that we'll be top of the mind for our consumer."


According to Simon, there are three growing markets: beef, valued at $50 billion; food consumed at home, $420 billion; and gifts, $100 billion. How much of this is online is hard to know, but OmahaSteaks.com is taking no chances.


Evie Black Dykema, senior analyst at Forrester Research, said online marketers should always be aware of what other products the consumers are buying within the same category. In that light, an expansion into high-margin gourmet foods makes sense.


"OmahaSteaks.com must have found that its customers are typically considering other gifts as well as other products related to Omaha Steaks' [offerings]," Dykema said from Forrester's headquarters in Cambridge, MA.


"If they find that their consumers typically come from a whole foods site and so are thinking of other products, then those would be adjacent product categories, and therefore, it would make sense to experiment with selling them," she added.


But it won't be easy. Selling branded steaks based on past reputation is one thing, but venturing into the online meals solutions and gourmet gifts territories is another. Rivalry in those segments is rife, both from online retailers and offline establishments.


"We view our main competition as grocery stores and restaurants," OmahaSteaks.com's Simon admits. "And the many online gift sites that could be competing for the gift dollars we want."
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