Hershey shares digital growth strategy, but is action coming soon?
- Hershey shared a glimpse into its digital growth strategy at its Analyst Event held at its Global Customer Innovation Center in Hershey, Pennsylvania. A large focus for the company will be incorporating its digital growth into in-store programs.
- The company detailed its "5C" digital strategy, which includes a consumer-first focus, a plan to win mobile-first content, driving impulse buys through e-commerce and developing connections with customers.
- "While the retail environment continues to change how our products are purchased, consumer desire for our brands remains," said Michele Buck, chief executive officer at The Hershey Company, during an analyst event. "We have the right vision, strategies, organization and talent to drive commercial advantage and our far-reaching digital transformation efforts are an important element to win in the fast-changing retail landscape."
Hershey is again saying it is setting out to expand its digital shopping experience and integrate it into its in-store programs. This announcement, however, comes more than a year after the brand first announced its big push into e-commerce. In a Q2 2017 earnings call, CEO Michele Buck announced the company would focus on its online retail and make it a priority growth area for the company. She also discussed collaboration with brick-and-mortar stores. This is an initiative the company has been highlighting in reports ever since, but has yet to take larger action.
Earlier this year, the company released their annual grocery report highlighting their moves to integrate its e-commerce strategy with personalized experiences at stores. The company introduced many hypothetical scenarios, including an app that allows consumers to tap a product image on a phone and immediately find the nearest store to buy it and a voice search that would automatically add recipe ingredients to a shopping list. None of the ideas though have become a reality.
This year Hershey’s goal highlighted in this release is to adapt and find a way to incorporate itself into the entire customer shopping journey — whether it's online or offline. In order to integrate digital growth into its in-store programs, Hershey is looking to build capabilities that are unique to e-commerce and different from what its competitors are offering.
The brand says implementing itself into every aspect of e-commerce will be key to its growth. Hershey noted in its report that consumers are likely to spend six times as much if there is a seamless process across all platforms. The company highlights that so far it can be shipped home through Amazon or Peapod, picked up at Walmart, fulfill cravings through goPuff, and offers direct-to-consumer experiences through Hershey’s website, which creates unique, special occasion products for a hefty price.
Hershey says its next steps could include connecting to customers by placing new items at eye level and on the front page, creating purchase histories with reorder reminders, lists or subscription products. The brand also laid out a plan to incorporate impulse purchases into e-commerce — something many brands struggle to do — by developing a checkout lane, offering post-order add-ons and offer snacks typically found in the checkout aisle to fulfill order minimums.
An expert at shifting gears, Hershey recently saw the candy business struggling and switched its focus to snacks, which is thriving in today’s market. The confectionary company also acquired Skinnypop maker, Amplify, which gave it leverage into the healthy snack category. These moves helped the company post better than expected earnings in the last quarter, despite the decline in candy sales industry-wide. Combined with a focus on e-commerce — if its initiatives are implemented — Hershey could log even better revenue numbers.
- Hershey Co. Winning in Digital Commerce
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