Omaha Steaks: Focus on Fulfillment
On the surface, it’s a typical American success story: an immigrant family fleeing religious persecution arrives in the United States and starts a business; 85 years later it’s not only successful, but still family-owned and operated.
Today Omaha Steaks is a meat dynasty, making the merchandising and fulfillment challenges it faced from the beginning uniquely significant. How it continues to survive those challenges highlights strategies for other catalogers hoping to conquer the perishables market.
Omaha Steaks enjoys the advantage of processing most of its own product offerings. The company sources its—literally—raw material mainly from Midwestern producers, and then ages, trims and packages the beef at its own production plants in Omaha.
This offers two benefits for the cataloger. First, it easily can project orders or change projections based on real-time sales analysis. Todd Simon, senior vice president, estimates that Omaha Steaks turns its inventory eight to 10 times a year. And though the company outlines buying plans a year in advance, thanks to on-site manufacturing it can modify those plans almost daily.
Second, it can offer customers a no-back-order policy that guarantees the items they order will be in stock.
“It’s not like we’re an apparel company that’s ordered a certain amount of T-shirts from Hong Kong, and when the supply runs out we can’t sell them,” Simon says.
In the rare instances when an item isn’t available, he says, the company either manufactures the item or substitutes a better one. The company ensures not only the availability, but also the quality of its meat from when it arrives at the plant until it gets to the customer.
Beyond adhering to the meat industry’s standards for buying beef, Omaha Steaks requires its meats to be inspected upon arrival at the plant and again during processing. For example, each steak cutter is responsible for his or her own quality control, and each is empowered to reject any product not worthy of the Omaha Steaks name.