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>Running Your Business>The Future Looks Sweet

Online shopping has slowed checkout aisle impulse buys like candy bars. Former Unilever executive Doug Straton is now tapping data to reconfigure how Hershey’s conducts business to compete in a bricks-and-clicks retail landscape.

For brands today, a customer’s inability to find products, paired with subpar online content, is the equivalent of poor in-store merchandising. Getting your digital-marketing house in order is critical to running a viable consumer products company in a bricks-and-clicks shopping landscape, according to Doug Straton, Chief Digital Commerce Officer for Hershey’s. The confectionary giant plucked Straton from another retail giant just last year: Unilever, owner of brands like Dove, Suave, and Bertolli, to do just that.

Straton has plotted a “search and engagement” digital transformation strategy for Hershey’s, pegged to what he’s dubbed “ The 5 Cs.” The strategy, he explains, puts consumer desires at the center of the Hershey’s brand narrative, obsesses over forging connections by appearing prominently in customer searches online, appeals to shoppers via compelling digital content, optimizes the process across customer touchpoints to boost conversion rates, and stokes a bond with consumers post-sale with community engagement that’s interactive and ongoing.

In its quest to up-serve consumers and boost sales, Straton’s multi-faceted plan for Hershey hinges on mining wide-ranging consumer data—from what’s on their weekly grocery list and what they bought during a Memorial Day visit to Hershey Park, to how they reviewed the new Cookies ‘N’ Creme bar on Amazon.

It’s built on the premise that when it comes to retailing today, “the mobile phone is the new mall,” according to Oliver Chen, an analyst with Cowen.

And “If you’re going to be seen, bring your best self,” Straton adds. “In modern retail, we know that digital is the first trip. So if you don’t merchandise the digital shelf correctly, people may choose not to shop with you in the digital or the physical store.”

A tough retail market for confectionary fare.

Straton is betting that the strategy will counter a tough market for confectionary goods in the U.S., where sales of checkout-aisle goodies, like chocolate bars and candy, have slowed. That slowdown comes as many Americans increasingly shun sugary treats for what they perceive as healthier snacks, just as the growth of online shopping dampens store sales of candy, an impulse purchase that, by definition, does not typically land on consumers’ grocery lists.

Straton has a plan to tackle all that. But it’s one that’s grounded in the harsh reality that the market for impulse-driven consumer goods has fundamentally changed.

“If you are a brand or retailer looking to replicate the impulse purchase process in a digital world, I would submit that you are swimming against the current,” he said.

Digital encounters with consumer brands now eclipse physical visits, which is something retailers, “who have been too focused on” optimizing floor planograms in huge fleets of stores are having a hard time getting their heads around.

“A huge portion of our business is built around impulse purchases,” he continues. Now, via smartphones, you can “access every retailer on the planet and every product. What does that mean for the impulse category? Impulse will look different in an ecosystem centered around digital convenience,” he said.

Mostly importantly, it’s crucial for brands and retailers to recognize that today, “how a brand looks on a smartphone replaces the physical store window,” he said. How much of Hershey’s purchases are digitally influenced today? “The simple answer is, all of them.”

Countering this major shift means optimizing online search, delivering relevant and compelling digital content, and capitalizing on “the data you have on real people,” Straton explained.

Know thy digital shopper.

The journey starts with extracting a more granular view of the shopper via her digital and physical footprints, then following her and serving up personalized offers, whether she’s in store or on her phone, Straton explained.

The customer experience, on the other end, needs to be reimagined for a retail marketplace where shopping trips, more often than not, begin on a digital device. “By understanding more about people through data–whether self-reported, observed or contextual, like weather or time of day–we can deploy different variations of that content that better speak to that person and the moment therein and the call to action,” Straton added.

“For example,” he said, “we know the areas in the country where s’mores are loved, and increasingly, the people who love them, and we can send specific offers into those areas informed by time of year, day, and the weather—all things that affect the consumption of s’mores.” These would be contextually relevant offers, like a digital ad or a text message when the forecast is sunny skies leading into a holiday linked to outdoor fun, to when “people are preparing their weekly shop.”

If you’re going to be seen, bring your best self.

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Turning impulse buys into planned purchases.

Getting on shoppers’ digital grocery lists is a critical first start to fuel both online and offline sales for a confectionary brand like Hershey’s.

According to company research, most online grocery orders (80%), including online, pick up in store orders, are sourced from a combination of grocery smart lists—algorithmically curated lists based on your previous purchases and behavior—and search. “So being on the list is critical,” Straton said.

With Hershey’s high household penetration and name recognition, chances are that most shoppers with supermarket loyalty cards have already purchased a Hershey’s product, linking the brand to their store loyalty card history.

“Once the item is pre-loaded on the shopper’s online list, the value of convenience takes over,” Straton said. That’s because most shoppers won’t take the extra step to remove it from the pre-loaded list themselves. “They’ll continue to make purchases—week after week—off that list…and we move that unplanned impulse purchase into a planned one,” he said. “This represents a major paradigm shift for our category.”

Content really is king.

All told, great digital content is akin to what all consumer brands are searching for: Prime retail shelf space, Straton explained.

We should “make sure we are creating authentic, relevant, and shareable experiences, and that we’re able to deliver that content wherever somebody is.”

Hershey’s has set its sights on optimizing that endless stream of content that flows from the digital economy, which it divides into three buckets: branded content, enterprise content (such as the ingredients in a Reese’s peanut butter cup), and user-generated content—from shoppers’ product reviews on retail sites to their social media posts.

“In the past, there was a limited amount of brand-related copy created to address a limited amount of media and marketing channels, and all prospective consumers got basically the same message through those channels,” Straton said.

“Now, for any given product, there is a massive amount of content created, and not just by us, but also by people who love us—visuals, romance copy, TV spots, inspirational videos, ingredient lists, recipes, social, ratings, reviews, etc., are all part of the mix and are accessible on mobile, anywhere.

“As we create, curate, and most importantly, manage that content, we can deliver a different combination of image, video, recipes, or suggestions that are uniquely different based on who and where they are, by time of day or weather condition.”

When it comes to branded content, Straton argues that a well-executed Hershey’s product description page on Amazon, for example, is equally important to driving sales today as smart planogramming in hundreds of stores—although marketers too often ignore it, failing to appreciate that digital, once again, is the new front door to the store.

Unlike the unwieldy and inexact process of merchandising stores, there’s a pretty exact data science to getting a digital page right, he said. This includes details, such as product type and key words, like “Reese’s peanut butter cup,” or “Reese’s pieces,” that are findable, for example. At Unilever, Straton had to fight for the word “soap” to be included in Dove’s digital marketing. The keepers of the brand insisted that the product is a beauty bar, but “you’ve got to use the shopper’s language so that it surfaces in search,” he explained.

In this case, “The sexy things are not as important as the unsexy things,” Straton said.

Additive content, such as customer reviews, product features, and occasion-specific promotions, like March madness-themed Reese’s Pieces, are also integral to optimizing findability and consumer engagement.

“If you don’t master search, your brands can’t be found, and in turn, can’t be sold,” he said.

Chocolate plays a big role in people’s lives. It tugs at my heartstrings, evoking memories of my baby being born, my wedding, sitting with friends, and birthday parties.

Community-building one Almond Joy fan, Hershey Park visitor, at a time.

Like many consumer brands today, Hershey’s is summoning the power of social proof and the wisdom of the crowd via user-generated content, from a consumer’s product-rating and Twitter rant to their Instagram image of a peanut butter cup being dipped into vanilla ice cream.

User-generated content (UGC) is now often deemed a more authentic and viable marketing tool, as today’s consumers increasingly value peer opinions over brands’ spoon-fed advertising messages.

A new study by TurnTo Networks shows that a staggering 90% of UGC—defined as ratings, reviews, product photos, product videos, or other commentary—written by the consumer about purchased products or items they’re considering, influences shoppers’ decisions to make a purchase, eclipsing all other forms of marketing.

“The smartest people are our consumers,” Straton said. “Which is why their online reviews, comments and social posts inform the digital content we create, and increasingly, the products we create.”

Indeed, Straton says Hershey’s is in a position to plumb the various expressions of its brand—which extend beyond traditional retail to hotels, resorts, amusement parks, and its own shops—for rich content experiences and customer-centric product development in a way its competitors can’t.

“We have access to data through sources that most companies don’t have,” Straton mentioned. “We’re knocking down company silos to capitalize on those rich assets, which had been underleveraged.”

Consumers are experiencing this brand in a different way than other brands, he added. Hershey’s boasts data on when customers are “checking into a hotel, buying tickets at the amusement park, shopping at Chocolate World, or engaging with our website: We know what they’re looking for, and we have the ability through all these different touch points to really understand our customers and have them advocate and innovate for us.”

In turn, “We could very easily share a lot of stories that are centered around our products.” For example, for die-hard Hershey fans, “we could send you a concept a year in advance of a launch to see what you think of the idea, and if it’s good or bad,” Straton said.  “We’ll take their insight and come up with products directly for them.”

He also hinted at the digital marketing possibilities born from people’s emotional connection to the brand, noting that Hershey’s ranks among the top-loved brands in America.

“There’s something about this category that is self-evident: Chocolate plays a big role in people’s lives. It tugs at my heartstrings, evoking memories of my baby being born, my wedding, sitting with friends, and birthday parties,” Straton said.

“There’s an emotional component to the category, particularly with Hershey as a brand. People like to share those stories,” he said. “We want to tap into that sentiment.”

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2018-10-18T08:28:36-06:00