Although online grocery shopping currently represents only 4% of total retail sales, the overall market is expected to experience a surge over the next few years, according to research from Packaged Facts.
Door to Door Organics is one business leading the online grocery charge, which is expected to reach $100 billion by 2019. Since its inception in 2005, the natural and organic online grocer has provided fresh and healthy foods and quality recipes directly to consumers based on their unique wants and needs.
Starting in founder David Gersenson’s garage, Door to Door Organics went on to reach $27 million in revenue by 2013. Throughout the years, the grocer has established a loyal following due to its focus on encouraging a healthy lifestyle.
The company most recently secured $25.5 million in Series B funding led by Arlon Group, a New York-based global food and agriculture investment firm. With operations in 11 markets across 30 cities, Door to Door Organics will use the funding to further expand its reach, as well as its variety and quality of products and services.
In the below Q&A, Chad Arnold, CEO of Door to Door Organics, outlines the grocer’s expansion plans and reflects on its successes thus far.
Retail TouchPoints (RTP): How has Door To Door Organics grown or evolved since its inception in 2005?
Arnold: Since 2005, we learned to listen to our customers, and they told us they wanted even more “good food.” So, we’ve evolved from a fresh seasonal produce box company, to a full natural and organic food store, making eating good food simple and convenient.
Adding to that, we have created tools that help customers get from products to meals with our Shop by Recipe functionality, built a more personalized shopping experience, and created simple reordering features. Our strategic growth model is built around listening to our customers and creating a lean, iterative approach to building the company.
RTP: What market needs or pain points are you trying to address with your business, and how have consumers responded to your company goal?
Arnold: Eating well can be confusing, complex and time consuming, but it doesn’t have to be. By creating a highly curated selection, targeted personalization and a contextually driven shopping experience, we help customers make good food decisions. For instance, with Door to Door Organics’ meal planning tools, you can more easily Shop By Recipe with a few clicks and get everything you need for a dish, like lasagna for example, and then we deliver it to your door at no charge for delivery. You skip the hour-long trip to the store, the jockeying for a parking spot, the checkout lines, the junk food impulse purchase, etc. and your groceries are at your door when you get home from work.
Our subscription service is a way to take the simplicity of a recurring order with the personalization and the flexibility that customers need. Our customer base continues to grow significantly, and equally important, our customers continue to order more and stick with the service longer.
RTP: What customer acquisition and retention tactics have been most successful for you thus far?
Arnold: Our customer acquisition and engagement model is unique because of our multichannel approach. We are operating in online and traditional media, with a strong field marketing approach, as well. We hold events in all of our regions that connect our customers to each other and back to our digital and social experiences. It’s the synthesis between these activities that makes our approach unique and effective.
Search and social media continue to be the two tactics through which we can drive a significant number of new customers at a highly effective cost-per-acquisition. We’ve also seen great success in layering traditional advertising tactics on top of digital.
In 2015, the onboarding team will be focused on removing frictions and adding value, specifically by implementing a targeted onboarding program, a customer care program and customer listening and feedback loops for immediate change. Our targeted onboarding will involve providing customers with solutions for top cancellation reasons coupled with frugal “wows,” or gestures and incentives to create loyalty. Our customer care programs will empower employees in our field locations to minimize customer-facing mishaps, such as items missing from delivery and quality issues. We also empower our customer service team with the tools and resources to go above and beyond making it right for our customers. We’ll also look to give our customers more of a voice in our daily operations, by proactively asking for feedback and analyzing this feedback across multiple inputs and implementing real-time changes.
RTP: How do you plan to differentiate your business from grocery competitors who have both an online and brick-and-mortar presence?
Arnold: Compared to traditional brick-and-mortar retailers, we offer a different value proposition built on a more curated and personal customer experience. We seek to address real customer challenges, allowing them to save money and time, while creating fulfilling experience that bring joy back to food. We seek to support our customers’ values and desires, such as meal planning versus just buying groceries, ensuring they feed their family healthy food, reducing the environmental impact of their food choices, cutting their carbon footprint by opting for delivery, and building relationships with local farmers and producers.
We continue to expand both our offering and our customer experience. By staying closely connected and listening to our customers, we hear the challenges they are trying to solve first hand. And ultimately, we try to build solutions that focus on a convenient simple approach to getting good food.
RTP: What are your other key goals and plans for 2015?
Arnold: We plan to expand into new strategic locations throughout the Midwest by replicating our proven model for growth. We plan on continuing to delight the customer by evolving and improving the shopping experience. Our customers are incredibly passionate, loyal and our biggest source of generating and keeping new customers.
We don’t take that for granted; we know it’s unique and special and our most valuable brand asset. After bringing in more than 38,000 new customers in 2014, we’re targeting 53,000 for 2015.
RTP: Over the past year, what would you say your biggest lesson learned was? If you had one word of advice to other retailers in the marketplace, what would it be?
Arnold: Our biggest lesson learned is not one we didn’t know, but one that always needs reinforcing: Listen to your customers. Of course, that’s also our advice for other retailers. Meet your customers where they are and engage. Have a conversation with them or listen to their conversations with others about their challenges and experiences with your Company or brand. That’s where we’ve found the most wisdom. If you know you’re working to solve a real problem, then you just have to figure out how to do it the best you can.