Omaha Steaks: Carving Out a 21st Century Sales Model
"Most of the high-turnover, high-volume operations can't offer that," Simon says.
Most importantly, the company is in control of all of the facets that go into creating and selling their product.
"We cut our own steaks. We package them ourselves. We age them ourselves. We ship them ourselves. We own all of our customer touch points," he says. "Everything is within our control so we don't leave anything to chance. We think that's a big competitive advantage."
And while the company defines success as adapting to technological change, it defines its mission in an entirely different way. Omaha Steaks isn't a grocery store, nor does it really consider grocery stores its primary competitor. It's looking to sell high-quality steaks and other products to fulfill the "fine-dining family get together experience," Simon says.
"Our mission is to bring exceptional experiences to bring people together. And we view our primary competitor as any other kind of family gathering around food," primarily restaurants, he says.
Gary Karp, executive vice president at consulting company Technomic, says Omaha Steaks attracts upscale consumers who are looking for more premium cuts.
"In general, consumers are looking at lots of different places. They're shopping at more locations, they're comparing prices, but there is that tier of shopper that wants premium and that's where Omaha Steaks seems to live and do well," he says.
Even if the company doesn't view itself as a grocer, Omaha Steaks' eager adaption to tech trends adds to the company's competitive advantage against grocery stores, discount bulk retailers like Costco(COST) and Wal-Mart Stores(WMT) and restaurants.
Omaha Steaks' busiest state for sales is New York.
"Many specialty food companies sell online as an adjunct to their wholesale business. Others, such as Omaha Steaks, have built their business model on direct-to-consumer sales," says Ron Tanner, vice president of communications at the National Association for Specialty Food Trade. "About 10% of specialty food consumers buy food online. They appreciate the opportunity to discover products which are not available in their geographic area."
Not just steak
Steak isn't all the company sells among its 400 premium products.