GOLDEN, Colo. -- For retailers pondering their e-commerce strategy, Lorri Alden has some advice: They can thrive in a digital world without major investments, but they have to play the game to meet customers online.
As for food and beverage companies reviewing their role as digital fulfillment providers, Alden believes they could make engagement more convenient and products easier to find, as well as sharpen seasonal selling opportunities.
Alden speaks from experience: She operates as both confectionery retailer and supplier. Her company, Genesee Candy Land, based in Golden, Colo., runs a retail store while also manufacturing confections such as chocolate-dipped bacon, fudge, cookies and truffles.
At a time when brick-and-mortar retailers face disruption from pure-play e-commerce providers such as Amazon, big-box retailers and their own consumer packaged goods (CPG) suppliers, Alden’s 360-degree view serves her well, and she sees e-commerce as more of an opportunity than a threat.
“Our online candy sales increased 62% during the first five months of 2018 (from same-period 2017) thanks to the refinement of our online platform,” Alden says. “At the same time, we’ve gained entry in about 200 7-Eleven stores and continue to grow our retail accounts. Online shopping isn’t eliminating brick-and-mortar business, but it’s incremental sales. There’s a relationship between the online and instore experience.”
The snacks and candy category is at an advantage compared to some other food and beverage categories. According to research from The Hershey Co., when it comes to snacks and candy, consumers expect a “blending of online content, creative merchandising and immersive experiences as they make purchasing decisions across traditional and digital platforms.”
Half of all confectionery purchases are digitally influenced, according to Hershey. Shoppers spend six times more when shopping a retailer’s “total commerce ecosystem,” says Doug Straton, chief digital commerce officer for Hershey, Pa.-based Hershey. “As we deepen our understanding of when, where and how people search for snacks, we’re building a stronger muscle for advising our retail partners in an environment where shoppers seamlessly move between digital and physical retail.”
“Many people will still be buying most food and beverages from the traditional retailer over the next few years.”
Convenience operators wary of the digital threat can take heart: When it comes to where consumers like to shop for snacks and candy, it’s not an either/or proposition but a both. Reinforcing the synergy between online and in-store is that 53% of shoppers consult “online carts” while in the store, according to New York-based Nielsen.
Consumer store visits, meanwhile, continue to prevail: Forty-five percent of online shoppers prefer to shop in-store to see or touch products, increasing the need to show imagery and information online, according to data from Hackettstown, N.J.-based Mars Wrigley Confectionery’s internal peer-to-peer (P2P) e-commerce survey The Experience & Cross Sell.
Brick-and-mortar also has an advantage over online when it comes to trust. Mintel found that 53% of Americans are concerned about the safety of products bought online. “They exercise caution as they believe that purchasing in-store isthe most trustworthy way to determine the safety, quality and freshness of items,” says Matt Lindner, senior e-commerce analyst for Chicago-based Mintel.
CPG companies such as Mars Wrigley are making the online experience as user-friendly as possible; it has forged a tighter relationship with Amazon and developed a strategy underscored by shortening the digital path to purchase.
“Amazon’s Prime Now and Fresh platforms both bring the traditional retail experience online for shoppers and offer a next level of convenience and trial,” says Richard Jones, director of digital commerce for Mars Wrigley Confectionery U.S. (Amazon’s sales of sweets and snacks grew by 22% year over year from November 2017 to April 2018, according to One Click Retail, an e-commerce data and analytics firm based in Utah.
Mars Wrigley also launched an e-commerce team to increase the number of people who buy candy online on impulse. According to the supplier’s P2P e-commerce data, only 30% buy candy online on impulse, thus providing ample opportunity for growth.
“Gum and confections are items that don’t always make the online grocery list right now. And without the traditional front-end space as a visual cue, we need to shift consumers’ thinking to remember they can buy these items in this space,” Jones says. He says Mars Wrigley products are experiencing “rapid growth online.”
Within the past year, a growing number of suppliers have developed winning e-commerce initiatives to shorten and streamline the path to purchase.
Hershey’s Global Customer Innovation Center’s report The Power of Search in a Shopper’s World describes how to extend the search across digital and physical retail within a “total commerce approach where shoppers can find snacks whenever, wherever and however they choose to shop,” Straton says.
A nod to the power of digital and instore synergy, Hershey tested different candy-aisle arrangements at 20 retail locations, incorporating digital elements with physical features.
Mars Wrigley’s e-commerce team, meanwhile, began to deploy interactive methods to infuse fun into product browsing, encouraging people to linger longer. The initiatives included:
- Testing an Alexa voice shopping deal in 2017 with Orbit White and Snickers. The company had its first chocolate Alexa Prime Day deal with 35% off the list price for a Dove variety mixed bag.
- Launching person-to-person mobile gifting driven by digital gift cards, which drove consumers to its retail partners with fun, unique ways to give confectionery gifts.
- Refining click-to-cart functionality on social-media channels and chatbot technology. Consumers interacted with the bot by answering preference questions for the Skittles brand. The “favorite” Skittles product was revealed directly in the shopping cart at Walmart or Amazon. Seventy-four percent of bot users went through the bot multiple times, according to Mars Wrigley data.
In the spirit of shopping and shipping, Genesee Candy Land uses its retail store and the nearby manufacturing plant to appeal to tourists, who tour the plant before buying items in the store for immediate consumption or ordering online.
Genesee collaborated with a third-party technology provider for the first time earlier this year to refine both form and functionality aspects of its website, making click-to-cart ordering quicker and products, such as fudge, lollipops, cookies and caramels, easier to find. Alden, who declined to share web traffic figures, says her team makes sure not to become overwhelmed with order fulfillment by establishing a once-a-week shipping schedule, which allows it to stay on task. The website is also populated with customer testimonials, culled from retail staff members who take ongoing notes when a customer compliments Genesee’s product quality.
“Our customer base is 80% tourists, and [they] often buy items. I set up a … laptop in our store that’s similar to what guests can use in a hotel lobby,” Alden says. “It makes online ordering very safe and convenient.”
Genesee Candy Land builds customer trust by allowing visitors to sample items in its retail store before buying them for online shipping back home.
“It’s one thing to buy a laundry detergent online, but with food, you want to make sure you’ll like a chocolate-dipped bacon before you buy it,” Alden says.
“We need to shift consumers’ thinking to remember they can buy [gum and confections] in this space.”
While those with a major stake in brick-and-mortar snack and candy retailing see traditional shopping tendencies holding ground, retailers should practice some online engagement, Alden says, such as via mobile apps.
However, many c-store operators are still largely in the very early stages of exploring the possibilities.
“From what we see, most midsize to small c-store companies are still working on more basic issues and just haven’t gotten there (online) yet,” says Bill Bishop, chief architect and co-founder of Barrington, Ill.-based e-commerce consulting firm Brick Meets Click.
Kraig Morrison, category manager of confectionery for Temple, Texas-based McLane Co., sees it as business as usual. “We know CPGs all have an e-commerce presence and online shopping capability, but it hasn’t influenced our c-store business to this point—we’re seeing the same trends and same speed to market.” One online bugaboo: Chocolate can melt when ordered online, he says.
Suppliers see a continued co-relationship between the two platforms, which should continue unabated. “Even as online shopping grows, stores are not going away,” says Jones of Mars Wrigley. “We are taking a holistic approach to helping shoppers find our products, with online being one part of that mix. Many people will still be buying most food and beverages from the traditional retailer over the next few years. We’re continuing to be flexible to evolve the role e-commerce plays in our business.”
Who's Buying Online?
When it comes to food and beverages, most American consumers are resisting the siren call to buy online in favor of the in-store shopping experience, according to a study by Washington, D.C.-based Morning Consult.
Source: Morning Consult (survey conduscted in May 2018 of 2,200 American consumers.
Online Seasonal Confection Drives Growth
Seventy-two percent of online shoppers purchase confections for planned events and holidays from a website, according to Mars Wrigley Confectionery’s proprietary P2P e-commerce quantitative survey for the convenience channel. This shows online candy selling tendencies should never take a holiday.
In 2017, “Halloween had already begun to impact search behaviors by the beginning of August, and capturing that initial wave of traffic reinforces a brand’s sales and search performance and widens the gap between them and their competitors,” says Kathryn Johnson, account manager for Salt Lake City-based One Click Retail. The 2018 season should be no different.
Johnson cited relevant search terms such as “Halloween candy,” which can begin popping up as early as the end of July in any given year. “This keyword search data reveals that many consumers are buying their Halloween candy early and in bulk,” Johnson wrote.
Lorri Alden, owner of Genesee Candy Land, Golden, Colo., says her mission is to become more fluent in seasonal selling. For instance, Genesee’s chocolate-dipped bacon is an ideal Father’s Day gift. “It’s something we’ll be fully promoting online in 2019—we can start the campaign in April to capitalize,” she says. Genesee Candy Land sees similar opportunities for National Caramel Day, National Chocolate Day and more. “We’re attempting to become more nimble and stay a step ahead. I’ve made it a point to expand our relationship with Amazon and scale up how much of our portfolio can be found during an Amazon search (using its third-party webmaster for ongoing support in this effort),” Alden says.