PR Team: FreshDirect (New York) and The MacKenzie Agency (New York) Campaign: Launch of FreshDirect Time Frame: January-September 2002 and ongoing Budget: $1 million (total annual marketing budget)When FreshDirect was gearing up to launch its online grocery service in New York City, it knew it had obstacles to overcome. With several failures in the sector, including the $1 billion flameout of Webvan, online food purveyors were seen as something of a joke. Convincing people to change their behavior and shop online for their vittles - without being able to see or feel them - was a big challenge. FreshDirect's selling point is not, as with most online delivery services, convenience, but lower prices and fresher food (it specializes in perishables). "We want to deliver the best product at the best price so any consumer can say, 'I can put that in my kid's mouth and it's safe and it tastes better," says CEO Joseph Fidele. Strategy The company planned a beta test for July 2002 on Roosevelt Island, a two-mile-long sliver of land in the East River. The island was an ideal laboratory because it has 3,300 households, is underserved by grocery stores, and is close to FreshDirect's 300,000-square-foot facility in Queens. FreshDirect's main marketing goal was to reach consumers directly through guerilla marketing and community relations. The hope was that the resulting word-of-mouth viral marketing would bring press coverage that would reinforce the brand and the credibility of the company's value proposition. The company worked on the launch with food and beverage PR outfit The MacKenzie Agency. The marketing plan would become the template for the company's neighborhood-by-neighborhood rollout; in September it launched in Battery Park City, it now delivers to most of Manhattan's East Side, and is currently expanding to the West Side. Tactics As early as January 2002, FreshDirect began contacting local groups on Roosevelt Island, including the Senior Association, Residents Association, churches, and book clubs. When the local public school, PS 217, held a parents' spaghetti dinner, FreshDirect donated food for it. When the Day Nursery sponsored the Roosevelt Island Kiddie Olympics, FreshDirect provided desserts. The company put actors on the street dressed as fruits, vegetables, meats, and fish to hand out flyers. It distributed doorknob hangers and placed ads in local media, phone kiosks, and bus shelters. It worked with residential buildings to set up complimentary breakfasts in their lobbies in the morning, and snacks in the evening. FreshDirect reps explained to residents how the online ordering process works. FreshDirect also contacted the one newspaper on Roosevelt Island, the Main Street Wire. John Boris, FreshDirect's VP of marketing and business development, says the one-to-one PR gets people comfortable with the idea of ordering online. "By creating relationships with people on Roosevelt Island, we generated a lot of word of mouth," he adds. Results FreshDirect has an admittedly enticing try-out offer: $50 in free food on the first order. A whopping 55% of households on Roosevelt Island have tried it (of those, about 80% have tried it at least twice more). FreshDirect now has 55,000 customers, is adding 3,000 more each week, and expects to be profitable this year - ahead of schedule. In February 2002, FreshDirect got a piece in the Main Street Wire ("Company Plans Online Grocery Shopping for RI"), which, Boris says, resulted in many people preregistering for the service. Since its official launch, FreshDirect has also received coverage in The New York Times, The Wall Street Journal, New York Daily News, New York Newsday, Fortune, BusinessWeek, New York, Time Out New York, Bloomberg radio, and NY1. "We were surprised at the national attention we got," says Karen MacKenzie, president of The MacKenzie Agency. "I think the reason for it is that this is 'Webvan 2.0.' The national media couldn't get over that somebody would have the audacity to try this again." Future FreshDirect is determined to avoid Webvan's mistake of trying to open in too many cities at once. It says it will get it right in New York before it even thinks of opening elsewhere.