IRVING, Texas — With social media and a constantly growing list of promotions and innovations, the candy category has increasingly become an experience, requiring category managers to figure out new ways to surprise and delight consumers. Andrew Lee, senior category manager of center-store merchandising for 7-Eleven Inc., hears the call. He and his team are on a mission to not only meet but exceed the heightened expectations.
Lee, who was named one of CSP’sCategory Manager of the Year award winners in 2019, has an arsenal of proprietary tools and techniques to leverage, including the 7-Eleven app and 7Rewards loyalty programs, which have proven invaluable to propel new product launches, he said. For any new private-brand product, 7-Eleven has the capability to leverage competitive analysis on other best-in-class category products to drive trial and repeat business.
For the past several years, Irving, Texas-based 7-Eleven has been building a reputation for quality and uniqueness across its 7-Select and other private brands. This summer, the chain is debuting a new proprietary 7-Eleven seasonal-oriented premium chocolate launch that was developed from the highest-quality Belgium chocolate, “with playful images and a highly approachable price point,” said Lee.
Meanwhile, Lee is keeping an eye on demographic changes. In particular, he’s watching Gen Z and millennials become powerhouse consumer groups, representing customers born between 1981 and 2010. Millennials alone increased their 2019 candy purchases 8% vs. a year ago, including a 9% increase across nonchocolate candies during the 52-week period ending Dec. 29, 2019, according to data provided by Chicago-based IRI.
Lee and his team are also preparing for the next consumer coalition to exert its influence, the Gen Alphas, who were born starting in 2010. What will their specific needs consist of? That’s the burning question.
What follows are excerpts from an interview recently conducted with Lee that delved into various aspects of retail confection, with a decided emphasis on how to best cater to younger, mercurial consumers and their candy buying habits.
Can you talk about the magnitude that millennials and Gen Z play to the contribution of sales at 7-Eleven, and what kind of knowledge you’ve gleaned about resonating higher with the target audience?
We know millennials and Gen Z customers are looking for an innovative and differentiated assortment of candy. Because of this, we want 7-Eleven to be a destination for candy lovers to find exclusive and limited-edition options. Efforts to create this experience for our customers include exclusive collaborations with brands such as Mondelez, Trolli and Hi-Chew and innovative social programs that include augmented reality experiences, online games and giveaways.
Can you talk about the game plan established around price, promotion and display for candy in resonating with this target audience?
7-Eleven customizes the candy assortment in each store to meet the needs of customers. We have found younger generations, such as millennials and Gen Z prefer nonchocolate, with a high affinity for sour taste profiles. We have an expanded assortment of sour, nonchocolate candy to appeal to and build loyalty with these younger customers.
Can you go into the Gen Alpha consumer group and what kind of insights your confection team has collected thus far?
Gen Alpha is our future customer, which has led us to expand novelty sets with a focus on surprise and delight items, such as Kinder Joy and Yowie. To highlight our exclusive products, we use eye-catching display shippers to draw attention. We also often add money-saving promotions to the display as well as offer promotions in 7Rewards to delight our repeat customers with bonus points and in-app discounts.
Baby boomers have long established a candy-buying hierarchy around loyalty and nostalgia. What are the corresponding hot buttons that these younger consumers value most?
Because baby boomers are very brand loyal, we continue to focus on them by carrying tried-and-true brands such as Heath and Baby Ruth. In contrast to boomers, our younger customers prefer sour, nonchocolate options.
We use private-brand products to attract millennials and Gen Z customers and build their loyalty by focusing on what’s trending on social media, industry trends and vendor insights. For example, recently released Gamer Gummies come in unique shapes like gaming consoles and headsets with the flavor of energy drinks. We have also introduced a line of premium chocolate bars with flavors such as dark chocolate with red sea salt, milk chocolate with cinnamon churro and white chocolate with popping candy.
Can you address trends occurring across various types of confection, and what seems to be indexing highest these days in 7-Eleven's confection departments?
In regard to premium chocolate, we are focusing on seasonal customers with [our soon-to-be-launched] Belgium chocolate. We know from recent tests that our customers still enjoy indulgent treats. Because healthy confection is gaining popularity with customers, we continue to test new products and explore options that will cater to the customer’s needs.
Exotic and hybrid flavors are gaining popularity. Customers look for out-of-the box flavors, which led us to collaborate with Hi-Chew to bring exclusive fruit combinations like passion fruit and mango to stores.
It appears the chain continues to increase efforts into the mission to become a candy destination stop for a growing number of folks.
We are committed to being a destination for customers to pick up the fun, novelty and limited-edition products they crave. This includes our exclusive vendor collaborations such as Mondelez Sour Patch Kids Red vs. Blue and our private brands Gamer Gummies, which were developed with a niche group of customers in mind. In 2018, we collaborated with Trolli to bring Deadpool 2 fans an exclusive gummy candy called Tiny Hands, which referenced a story line in the first film.
How are you using social-media campaigns to target consumers?
We are constantly collaborating with vendors to create innovative social programs that include augmented reality experiences, online games and customer giveaways. For example, our exclusive offering of Mondelez Sour Patch Kids Red vs. Blue was supported on social media through influencer collaborations and enhanced social engagement, which led to a successful program. Additionally, we will continue to innovate with our private brands’ products by creating new options that stem from what is hot on social media.