Understanding and Improving E-Commerce Use by Small Farms

Understanding and Improving E-Commerce Use by Small Farms

Summary

This project used an online and a mail survey to gather and analyze information from farm businesses currently marketing over the Internet in the Northeast. A web page, WVFarm2U.org, that provides a consumer friendly Internet directory of agricultural businesses in West Virginia was created in partnership with the Collaborative for 21st Century Appalachia. West Virginia University (WVU) Extension Service’s Small Farm Conferences included workshops on e-marketing and website development for small farms.

Objectives/Performance Targets

Of the 160 agricultural businesspeople who attend workshops on e-commerce development, 150 (95%) will sign up for the West Virginia Specialty Products web site. Sixty (40%) of these businesses will have increased sales of 10-15% after 1 year of listing along with improved customer satisfaction. Forty (25%) of the 160 attendees will develop a web page for their business, and 75% of these (30) will increase sales by 5-10% within 1 year of implementation. This project will help advance the goals in the Northeast SARE outcome statement that agriculture in the region will be “profitable” and “conducted by farmers who manage resources wisely and who are satisfied with their lifestyles.” By helping agricultural businesses develop this relatively new advertising medium this project will help them increase sales and improve profitability. Because the research part of this project will discover the best ways for agricultural businesses to use the web for advertising and selling, it will help new Internet users avoid some of the mistakes made by innovators in this arena. This should help farmers manage wisely one of their most valuable resources, their time, and thus help them to be more “satisfied with their lifestyles.”

We hypothesize that most farm businesses that develop web pages will use them as advertising for their operation. These business owners will analyze the value of the web page (and other advertising media) by tracking how customers hear about the business. In addition, operators will record sales to those web-using customers. We will survey these businesses after 1 year of listing on the web in order to determine the percentage increase in sales as well as their overall satisfaction with web-based advertising. We project that only a small number of farm-based businesses will actually begin to sell products over the Internet during this first year of web site listing. We will also contact these businesses to evaluate their experience with Internet sales.

Accomplishments/Milestones

First Milestone: Project coordinator will conduct research gathering and analyzing information from farm businesses currently marketing over the Internet.

A survey of farms regarding their use of the Internet for marketing was conducted and results disseminated through presentations and publications.

Second Milestone: CSR and NRAC will make improvements to WV Specialty Products web page.

This plan was changed. Instead, a website, WVFarm2U.org, that provides a consumer friendly Internet directory of agricultural businesses in West Virginia was created in partnership with the Collaborative for 21st Century Appalachia, a consortium of chefs, farmers, extension personnel, educators and others interested in creating a local food system for West Virginia. This website made its début at the 2007 West Virginia State Fair with the Governor and West Virginia Department of Agriculture Commissioner in attendance.

Third Milestone: A total of 160 agricultural businesspeople will attend 1 of 4 workshops on e-commerce development held throughout West Virginia.

The first workshop was held February 28, 2006 in Morgantown, WV as part of a “Marketing for Success Conference” sponsored by the West Virginia University (WVU) Extension Service. A 3-part workshop was part of the 2007 West Virginia University (WVU) Extension Service’s Small Farm Conference. It included a presentation on e-marketing techniques along with methods for evaluating the value of Internet marketing. A presentation was given by the director of the Collaborative for 21st Century Appalachia regarding connecting with and selling to chefs over the Internet using the WVfarm2U website. The third part of the workshop was a presentation by a professional web developer on website development for small farms. Materials developed for that workshop were made available on my website for WVU Extension educators and others to use to educate farmers on e-marketing and web development. Over 125 people were in attendance at this conference in 2007.

This annual small farms conference draws participants from across the state and neighboring states. Much effort goes into making this 3-day conference a worthwhile experience, and scholarships allow attendance by many farmers who otherwise could not make it. After discussion with WVU Extension personnel, it was decided that rather than have poorly attended website workshops across the state, resources would go towards this annual event.

Fourth Milestone: 150 agricultural businesspeople will sign up for the WV Specialty Products web site.

The WVfarm2U website had delays in being developed but went online in August of 2007. It débuted at the 2007 West Virginia State Fair with the Governor and West Virginia Department of Agriculture Commissioner in attendance. The website has been promoted by the Collaborative for 21st Century Appalachia, the West Virginia Department of Agriculture, and at the 2007 and 2008 West Virginia University (WVU) Extension Service’s Small Farm Conferences. In addition, a new WV agricultural website just went online sponsored by the newly formed West Virginia Farmers Market Association which lists a link to the WVfarm2U website. As of January 2009 there were 70 farms, 12 roadside stands, and 3 CSAs listed on the web site, in addition to 14 restaurants and 33 farmers markets. A mailing to encourage farmers, farmers markets and restaurants to sign up on the site took place in early 2008. We hope to eventually reach the 150 farms projected in this milestone but it may take some time, along with continued promotion of the website.

Fifth Milestone: Sixty agricultural businesses will have increased sales of 10-15% after 1 year of listing on the WV Specialty Products web site along with improved customer satisfaction.

Due to the late development of the WVfarm2U website along with slow signup on the site and the approaching end of this project, we will not be able to determine if this milestone will be achieved. Surveying of farmers is currently underway to determine their satisfaction with the website and whether they believe it increased their sales, however, an increase of 10 to 15% was probably overly optimistic. In addition, it is extremely difficult for farmers to determine if an increase in sales was due to listing on this or any other web directory. The groups involved in development of this website will continue to follow up with farmers to determine their satisfaction with and benefits from their use of this WV e-marketing website.

Sixth Milestone: Forty farm businesses will develop a web page for their business.

Farmer interest in e-marketing has been slow to develop in West Virginia. Many farms still have dial-up Internet connections and the main high speed alternative, satellite, is expensive. In addition, many specialty product and direct-marketing farmers in WV believe that they cannot meet their current demand and so are reluctant to expand their market through use of the Internet. Farmers are also listing on the variety of farmers market and farm directory websites that are currently available in order to have a presence on the Internet. For many farms, this is sufficient exposure and the costs of developing and maintaining a website for their farm are not offset by the benefits.

From the survey of direct-marketing farmers, we learned that there are many factors (mainly time, money, and interest) that determine whether a farmer will develop a website for his/her business. Attendance at a workshop that promotes and explains website development may be the first step on this path but is not sufficient to lead to website development unless the farmer had already made significant progress towards website development on his/her own. Thus, the workshops that were part of this project were useful in that they probably initiated some websites for farmers who were almost convinced anyway and may have started some farmers to investigate the benefits of a website more intensively.

Seventh Milestone: Thirty agricultural businesses which created web pages will increase sales by 5-10% within 1 year of implementation.

See discussion under sixth milestone regarding the number of agricultural businesses creating websites. Also, increasing sales through use of a website requires heavy promotion of the website along with much time and effort maintaining and updating the site. It is also difficult for a farmer to determine if website advertising is behind any increase in sales, especially given the recent overall increase in demand for local foods. To follow up on website development among WV farmers a survey will be administered during early 2009 regarding current levels of website use and development for their businesses.

Impacts and Contributions/Outcomes

As shown in the discussion under Milestones, over 150 farmers received information on the value of and how to develop a website for their farm via workshops in West Virginia. In addition, this information was presented to 160 attendees (farmers, Extension agents, government officials and agency representatives) at a conference in Virginia. The materials used in these workshops are available online for anyone to access, especially extension personnel.

Through development of the WVfarm2U website, all direct-marketing West Virginia farmers have the opportunity to list on this searchable web directory. To date 70 farms are listed in the “on the farm” category, 12 roadside stands are listed, and 3 CSA farms are on the site. Farmers have also gained a way to sell directly to chefs via this website, although that was not part of this study. Consumer looking for local foods also benefit through the ability to search by WV location for a source of farm fresh products.

Cultivating Customers with E-marketing and How to Grow your Website, two PowerPoint presentations developed for the WV workshops are also used in a West Virginia University course, Marketing Agricultural Products (ARE 431). Hopefully this encourages future farmers to consider using a website for their farm business and provides them with enough background information to get started.