B2B Recipe for success
May 1, 2015 03:25 PM
For 10 years Alan Tetreault woke every morning at 2 a.m. and started baking. The French chef living in upstate New York mixed, mashed and molded for 12 hours and then walked out of his bakery at 3 p.m., already planning the next day’s projects. Life as a bakery owner was hard, he says. In the late 1990s, he noticed attendance rising at baking classes taught at his bakery; in the early 2000s, he saw an increase in the number of cake decorating competitions held in the United States; in 2001, after attending a cake convention and talking with the expert-level bakers, Tetreault realized the market was ripe for a website dedicated to specialized cake decorating supplies. A year later, he launched Global Sugar Art, an e-commerce site that sells cake-baking tools wholesale to professional bakers and in smaller quantities to recreational home bakers.
Now Global Sugar Art is helping bakers around the world whip up more sweets than Tetreault could have made in a lifetime. GlobalSugarArt.com takes about 10,000 orders per month and online sales are growing about 17% year over year, says Daniel Pfeffer, chief marketing officer. The company is on pace to generate $10 million in sales this year, and 20% of these orders will be shipped to some 125 countries outside of the United States.
Half of Global Sugar Art’s sales are to recreational home bakers. The other half are to mom-and-pop bakery shops. Global Sugar Art manages to serve the needs of both customer segments from one website. That’s a feat few e-retail sites manage to do successfully because business buyers and consumers often have different needs: B2B buyers often want quantity-based pricing and home bakers typically need only one or two items and look for more leisurely content like recipes and ideas. While Global Sugar Art treats each customer segment a bit differently—business buyers get different email promotions than home bakers, for example—the e-retailer manages both sides of its business with creative approaches to its selection, pricing and marketing.
Global Sugar Art’s two-pronged e-retail approach evolved out of obstacles Tetreault encountered as a young chef. When at 14 years old he tried to buy supplies direct from a manufacturer, the minimum order requirements were too much to bear financially. Understanding that recreational bakers and mom-and-pop shops need smaller quantities of cake stands, cupcake holders and the like, Global Sugar Art acts as a go-between.
That’s evident in Global Sugar Art’s procurement process and product selection. The site markets roughly 7,000 SKUs, but some SKUs are of the same base product—which Tetreault buys in bulk mostly from manufacturers overseas—repackaged into multiple sizes to meet the different needs of its business-to-business and business-to-consumer customers. For example, Global Sugar Art sells 20,000 pounds of fondant annually—it is the company’s top-selling product—and the e-retailer sells it in packages ranging in size from 8 ounces to 20 pounds.
Prices also adjust based on customers’ needs. The website automatically adjusts per-unit pricing based on the quantity selected, meaning a home baker will pay $22.99 for one Fat Daddio’s-brand jumbo muffin pan; a professional baker will pay $20.69 when he buys six pans.
Customers pay through the online shopping cart at GlobalSugarArt.com, and credit is available to a small number of hotels that shop on the site. But, because Global Sugar Art doesn’t serve very large corporations, it does not require features like approval processes and contract pricing that are common on B2B e-commerce sites serving large businesses, says Andy Hoar, an analyst at Forrester Research Inc. who specializes in the e-commerce strategies of manufacturers, distributors and wholesalers.
“If it was a different type of buyer with different corporate needs, like a corporate procurement official from Wal-Mart whose job it is to negotiate prices, shipping guarantees and order volume, and who needs to go through an approval process to purchase things, then they would need a separate site,” he says.
Global Sugar Art does see that certain features and functions draw more interest from one segment over the other. A loyalty program that awards points that shoppers can redeem on future purchases is more often used by B2B buyers than consumers, whereas many home bakers are drawn to the site via instructional videos the e-retailer produces and posts on its YouTube channel. The e-retailer has produced more than 100 videos—some more than an hour in length—showing Tetreault teaching viewers how to create edible art. At the end of each video—two new ones go up each month—are links to buy the products featured at GlobalSugarArt.com. One video that details how to bake your own wedding cake has more than 1 million views.
Tetreault says he finds inspiration in recent baking trends, new products the company has stocked and from customers’ queries. The Contact Us page on GlobalSugarArt.com yields about 20 email requests for new videos each month, and customer service reps pass along, on average, another 40 video suggestions they get from customers each month.
“I try to make a mix of more difficult, professional-level projects, along with a lot of very basic stuff,” he says. “In one six-part series I start with how to calibrate an oven.”
In addition to YouTube, the videos also appear in an Education Center section of GlobalSugarArt.com, which has attracted 8 million views since it went up in 2002 and is the most-visited section of the site, Pfeffer says. The videos cost about $500 to $1,000 each to produce in house. Once a video is complete, the retailer emails it to Global Sugar Art’s 120,000 client list, as well as posts it to its Facebook page, which has more than 224,000 likes, and to Twitter, where it has nearly 3,300 followers.
The company mainly seeks to attract new consumer customers by investing in paid search ads and optimizing its pages to rank highly in natural search results. Searches for terms such as “sugar flowers,” “gum paste flowers” and “cake decorating supplies,” as well as brands like “Satin Ice,” all show Global Sugar Art placed on the first page of Google natural search results. To attract B2B clients, the company advertises in baking trade publications such as Cake Craft. It also emails special discounts on popular products to its 300 biggest spenders, which are primarily retailers.
80% of these B2B and B2C customers apparently feel Global Sugar Art is the crème de la crème of online baking goods and are repeat online buyers placing an average of six orders through the site each year, Pfeffer says. This is higher than the 37% median repeat buyer rate among North America’s largest e-retailers by sales, according to Internet Retailer’s Top500Guide.com. GlobalSugarArt.com sees about 300,000 monthly visitors.
While Global Sugar Art is not without competition, online traffic data indicates it is outperforming competing e-retail sites operated by Sweetwise Inc. and SugarCraft Inc. In the 30 days prior to press time, Global Sugar Art got more traffic than these competitors—about 100,000 unique visitors—and shoppers also clicked on more than four pages per visit, which is also more than the competition, according to analytics firm Alexa Internet Inc. The e-commerce operation of kitchen and bakery goods manufacturer Wilton Industries Inc., however, receives about nine times the amount of traffic of GlobalSugarArt.com.
Global Sugar Art’s ongoing investments are helping it to stay competitive and continue growing. Three years ago, the company spent about $200,000 on an e-commerce technology and design overhaul, expanded its line of private-label products and hired more staff. Two years ago, it doubled its warehouse space to 20,000 square feet, with the city of Plattsburgh, N.Y., contributing $150,000 to its renovation to ensure the sweet company does not leave town. That’s the proverbial icing on the cake for Global Sugar Art.