Surviving the pandemic by pivoting its business model, rapidly switching from offering in-person food tours to selling personalized gift boxes.
The U.S. has been one of the countries most heavily affected by the global COVID-19 pandemic, which has deeply impacted the travel economies of every state and territory within the country.
The U.S. has been one of the countries most heavily affected by the global COVID-19 pandemic, which has deeply impacted the travel economies of every state and territory within the country.
The U.S. has been one of the countries most heavily affected by the global COVID-19 pandemic, which has deeply impacted the travel economies of every state and territory within the country.
According to the U.S Travel Association, annual travel spending across the country has faced an unprecedented 42% decline compared to 2019, with 18 states experiencing more than a 40% downturn in travel spending and a total of $492 billion in cumulative losses for the U.S. travel sector.
Across the country, local tour operators and travel companies have been facing the biggest crisis of their existence, which caused many of them to lay off and furlough staff or even permanently shut down. Only those who were fast and brave enough to adapt operations and business model were able to keep business up and running.
Located in the state of Wisconsin, Milwaukee Food & City Tours is an example of a company that has been able to thrive through the pandemic by pivoting its business model, rapidly switching from offering in-person food tours to selling personalised gift boxes. The gift boxes deliver the best products of the city of Milwaukee to the consumer’s doorstep and are often combined with add-ons such as virtual tours.
The gift boxes not only enabled the company to keep operations running and retain the staff but helped local hospitality businesses and food producers to remain operative and gain substantial income during the pandemic.
Milwaukee Food & City Tours was founded in 2008 by Theresa Nemetz as a walking and bus food tour company offering tours in the city of Milwaukee, Wisconsin (USA).
The company offers primarily private and public walking tours and bus tours around the city, bringing customers to experience sights and flavours of "Milwaukee's most historic neighbourhoods and delicious restaurants". The company employs a small but efficient team made of tour organisers, local guides and bus drivers, which expands during the high season to meet the higher demand.
Wanting to show to visitors the best gastronomic offer within the city, the tour company activates strong collaborations and partnerships with restaurants, breweries, bakeries and local producers.
When the national shutdown hit Wisconsin in March 2020, the company faced a 100% loss of revenue within 48 hours, with $200,000 worth of business cancelled or refunded. It was at this moment that Theresa realised the business required a fast pivot and a new line of business to be able to retain employees but also to support their partner businesses.
In the week immediately following the shutdown, Theresa was thinking about alternative ways to bring the experience of a food tour directly to the homes of her customers. After discussing with the team, she came up with the idea of developing 'Quarantine Care Packages': small gift boxes filled with hyper-local food developed in partnership with local producers and directly shipped at the customer's doorstep.
By the following Monday, the first set of packages was ready to be sold. The initiative was a success: the care packages quickly sold out and the company decided to further expand the service developing an efficient delivery system and e-commerce.
Within six weeks of the launch of care package distribution, sales have infused $80,000 back to small businesses as a direct result of orders placed online. The quick-thinking has allowed us to maintain our full-time staff as well as to hire back some of our part-time tour guides and bus drivers to help with local deliveries. - Theresa Nemetz, Founder
Thanks to the new initiative, Theresa was able to maintain all the full-time staff and re-employ part of the guides and bus drivers, which have been hired to help with the deliveries. Selling local products, the initiative has given a substantial contribution in ensuring partner businesses to keep a minimum level of income, infusing $80,000 back into the community of local businesses in the first month of lockdown.
Directly addressing the demand for food-related tours and experiences, still strong during the national lockdown, Milwaukee Tours developed a product, the 'Care Package', able to satisfy such demand and that taps exactly into the company's skillset.
To support the new product, the company had to first repurpose its assets. First of all, the company's website (originally created to manage solely enquiries related to tours) has been fully integrated with an e-commerce system powered by the platform Shopify, which allows a fast implementation of a customised e-commerce interface and which is used to process orders and manage payments.
Then, the company has adapted its 'physical' operations. With the increasing demand for care packages, Milwaukee Tours has converted part of the office space into a micro-warehouse, for the preparation and shipment of orders. The delivery of gift boxes through their network of bus drivers and local guides helped the company to re-employ staff and remain independent for local deliveries.
The success of the initiative brought to an expansion of the package lines over the summer months. More local businesses have been involved in the creation of packages and many more gift boxes were created for events like birthdays and holidays.
Over this period, Theresa had another revolutionary idea: what if the boxes could contain more than just food? She rapidly thought that each package could include a virtual meeting with the producer: combining packages with virtual experiences would have added even more experiential value to the product.
The idea led to the creation of gift boxes containing not only local products but including 'tickets' to participate in virtual meetings, tours and workshops with local producers and culinary creators behind the artisanal goods. Held on zoom, the virtual tours have been made available for purchase as add-ons at a very convenient price.
In parallel to this, thematic 'Travel Boxes' have been also created and themed by country (e.g. Cuba, Mexico, etc.) including local products paired with virtual cooking classes and workshops. The company has also introduced 'gift cards' to be redeemed for both virtual tours and gift boxes.
The great success of the packages led the company to start shipping nationally and internationally. Over 2020 the company has shipped more than 12,000 boxes to all 50 states as well as numerous other countries.
To market the new products, Milwaukee Tours has relied mostly on online ads, targeting both the existing customer base (made of past clients purchasing in-person tours) and generating look-alike audiences mostly in Wisconsin and in the nearby geographic area.
The company has been using mostly Facebook ads to create paid campaigns, targeting people who live in Wisconsin or have a strong affinity with the region. Pre-planning the ad sets was essential to succeed, with look-alike audiences accurately defined in advance.
Results of the campaign showed an impressive click-through rate, with women aged 35-65 representing 70% of all purchases. The majority of purchases are made from Wisconsin, but gift boxes are often sent to other states.
A key factor for the success of the ads was the significant 'social proof' each post was obtaining. In fact, every post obtained a large number of reactions, comments and shares that further increased the reach of the ads. This result was possible thanks to the specific content of the ad: each post was in fact not only showing the gift boxes but also the local producers, as well as the owner Theresa herself, well known, and respected in the local gastronomic scene.
One of the most successful campaigns was developed to promote the new gift boxes for the 2020 Advent Period. Using only $3,000 of budget, the ads generated over $138,000 in sales in only 48-hours.
The development of new products didn't only require listening to existing customers and analysing potential demand in the market, but also to work in close collaboration with partners to determine their ability and interest to supply the products to be included within the gift boxes.
While dealing with partners, finding the right balance to ensure profitability for both parties, understanding profit margins in the gift box retail space and developing accurate pricing for the gift boxes have been essential factors to ensure the viability of the initiative.
The U.S. has been one of the countries most heavily affected by the global COVID-19 pandemic, which has deeply impacted the travel economies of every state and territory within the country.
According to the U.S Travel Association, annual travel spending across the country has faced an unprecedented 42% decline compared to 2019, with 18 states experiencing more than a 40% downturn in travel spending and a total of $492 billion in cumulative losses for the U.S. travel sector.
Across the country, local tour operators and travel companies have been facing the biggest crisis of their existence, which caused many of them to lay off and furlough staff or even permanently shut down. Only those who were fast and brave enough to adapt operations and business model were able to keep business up and running.
Located in the state of Wisconsin, Milwaukee Food & City Tours is an example of a company that has been able to thrive through the pandemic by pivoting its business model, rapidly switching from offering in-person food tours to selling personalised gift boxes. The gift boxes deliver the best products of the city of Milwaukee to the consumer’s doorstep and are often combined with add-ons such as virtual tours.
The gift boxes not only enabled the company to keep operations running and retain the staff but helped local hospitality businesses and food producers to remain operative and gain substantial income during the pandemic.
Alongside small businesses, Milwaukee Tours has also engaged with corporate clients, for which the company created a large number of custom boxes tailored to their specific needs. This created significant sales funnels' allowing the business to sell more packages and scale revenue.
An example of a strategic partnership has been the one with the Wisconsin State Fair, which allowed the company to ship over 1,300 boxes to recipients in 42 states, as well as 750 within the state of Wisconsin.
As restrictions were gradually lifted over the summer, Milwaukee Tours was able to resume in-person tours, adapting the experience to the new needs of the post-pandemic traveller.
To operate efficiently and safely, the company decreased the number of tours in favour of social distancing. New outdoor walking tours have been developed within more ventilated areas, decreasing the minimum number of guests per tour and defining the itinerary based on customer needs. Bus tours were also made safer through strict hygiene standards, with buses operating at reduced capacity to better allow social distancing and enforcing mandatory face coverings.
Attractions, bars and restaurants allowing enough space for social distancing have been privileged, especially those offering outdoor seating. Meals were provided as individually-packed portions instead of serving food buffet-style. During shopping stops, guests were given plenty of time to allow for smaller numbers of guests to enter indoor locations
Alongside in-person tours, virtual tours were still available for those groups who didn't feel ready to travel yet. These tours were often paired with gift boxes filled with treats provided by the local producers displayed in the tour. For these tours the company developed different options, leaving groups free to choose the delivery options for the boxes. For example, some groups scheduled a location for everyone to pick up their boxes in person and then watched the presentation together, others preferred having boxes shipped directly to each attendee's home.
The high flexibility of the offer made sure every customer could find the best individual option: whether during a bus tour, a walking tour or a virtual tour, everyone can visit the city in the way they like best. On the other side, the resumption of tours was essential for the small businesses involved, as it helped them recover some of the lost income.
Over 2020, the sales of gift boxes through Milwaukee Tours' e-commerce have infused more than $250,000 back to small businesses and food producers within the community. More than 12,000 boxes have been sold, directly supporting 100 businesses within the state of Wisconsin (60 more than in 2019). For many, boxes have been an essential aid to gain a sufficient income, retain employees and avoid permanent closure.
We actually ended up supporting more businesses because when we were doing our tours in the past we were primarily just in the Milwakee area and very focused on restaurants. In 2020 we really had to look statewide. We really had to look at the food producers directly - Theresa Nemetz, Founder
Even if the focus of the company has always been to offer in-person tours, Theresa believes the gift boxes and virtual experiences are here to stay. Especially, the sales of gift boxes through e-commerce has opened up a completely new revenue line for business, which has now a more diversified offer appealing to a larger customer base.
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