Artizone gives small food providers a digital hand with marketing & distribution

By Elizabeth Crawford

- Last updated on GMT

Artizone gives providers digital hand with marketing distribution

Related tags Online shopping

Artizone, an online hybrid of a farmer’s market and an incubator, offers very early stage food and beverage startups a convenient way to market, sell and distribute within their communities, while preserving their independence from the retailer.

The online platform helps small, local food producers reach more consumers than they would with a single storefront or individual website by gathering their products on virtual grocery store shelves that leverage their collective appeal to consumers who are looking for a convenient, one-stop way to shop locally without the hassle of visiting multiple stores.

But unlike traditional retailers that buy the products and resell them at a markup, Artizone “steps aside to let the artisans do the job”​ of filling the orders they receive from consumers through Artizone, said Lior Lavy, the website’s chief operating officer. The online retailer then collects and delivers to consumers the products so that the producers can focus on filling more orders rather than on the complicated logistics of delivering them, he said.

Website facilitates relationships with consumers

This model allows the producers to carefully control consumers’ experience with their brand, manage the quality of their product without the risk of if spoiling at a holding facility, like those used by traditional retailers, and create direct relationships with consumers, Lavy explained.

The last point is particularly important given that consumers increasingly want to know more about where their food comes from and how it is made, Lavy said. The website further reinforces these direct relationships, which can create brand ambassadors, by allowing consumers to shop not only by category, but also by purveyor. So if a consumer finds an artisan she likes, she can see everything the producer has to offer. It also features all the producers in profile stories on its blog, Lavy said.

Artizone also heavily promotes producers when they first join the site by running banner ads and providing premium placement on the home landing page to help drive consumer traffic, Lavy said.

Artizone encourages smart growth

The platform allows artisans to closely define the scope of their business, so that no matter how small they are they can market their product without the risk of scaling beyond their distribution capability, Lavy said. He explained that artisans can specify with Artizone if they need to cap orders because they can only fill a set amount per day.

Aritzone also helps purveyors market their goods by taking professional photography, web development services and advice on branding and packaging, Lavy said. In addition, it helps young companies grow smartly by providing sales tracking services that identify when there is enough demand to justify the cost of scaling up.

While the website is willing to take a chance on small companies, it is not willing to take two, Lavy said. He explained that the artisans with which it partners must be “really serious”​ and demonstrate that they “understand what it means to make a commitment and follow up.”​ This means if a company agrees to a recommended packaging change suggested by Artizone but does not make the change, “you won’t be working with us anymore,”​ Lavy said.

The trade-off for help

The branding and marketing services Artisan offers are not completely altruistic, Lavy acknowledges. He explains that Artizone wants to be recognized as a destination for high quality products and part of selling that image is creating a consistent look across the platform to support its own branding.

Artizone does not charge upfront fees, which can be insurmountable hurdles for very small startups with limited cash flow and capital, but it does charge a commission, Lavy said. The retailer takes a 35% commission on sales it facilitates of goods that it stores at its facility and 25% on sales of goods that come from a different location, such as a storefront or a producer’s home. It also charges a deliver fee for orders under a set amount, he noted.

Consumers warm to online grocery shopping

Artizone’s innovative model seems to resonate well with producers and consumers alike based on its growth since it launched in late 2010. The website recently opened a platform in Denver, and already represents 90 purveyors in Dallas and 110 in Chicago, Lavy said. He added business has doubled annually since it launched just under five years ago.

“We touch the lives of 13,000 consumers,”​ many of whom are repeat shoppers, even if they have not converted to shopping exclusively online, Lavy said. He added: “Shopping online for food is a big change for consumers,”​ but they are embracing it slowly.

Indeed, the company noted online grocery shopping has increased more than 22% over the last year and will grow exponentially to become a $100 billion industry by 2019 – making it a channel that companies of all sizes won’t be able to ignore for long.

Artizone hopes to further promote its purveyors and expand the penetration of online grocery shopping by partnering with larger brick and mortar stores that want to expand their local offering and use its platform to ease into the online shopping channel, Lavy said.

Learn more about how online grocery shopping is evolving at Food Vision USA in Chicago Oct. 27-29​, where Door-to-Door Organics and online snack subscription service NatureBox will join HUMAN Health Markets to discuss what food shopping will look like in 2020. Find out more HERE​. 

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