What I Learned About Marketing From The Candy Man

bar of chocolateWhat do you do if you make candy, most of your sales in grocery stores are from the checkout lane, and RFID is poised to eliminate checkout lanes?

I attended the holiday reception of the Grocery Manufacturers Association earlier this week.  In addition to mingling with GMA staff and other sister association staff, I got to meet reps from several GMA members, including Tom from The Hershey Company.  I told Tom that Matrix Group has got to be the biggest buyer of the dark chocolate Hershey’s kisses (the dark chocolate kisses are wrapped in purple foil).  Purple kisses are a staple at nearly every Matrix Group meeting because a) they’re purple and b) meetings always run better when there’s chocolate involved.

Tom reported that Hershey’s chocolate is doing well because even during (or perhaps because of) the recession, chocolate is an indulgence most people can afford.  I asked him what’s new in the business of candy/chocolate marketing and he said candy makers are in for a rough ride in the next few years because the grocery store user experience is changing dramatically. Consider this:

  • Most candy sales in grocery stores come from the checkout line. Why? Because most people avoid the candy aisle, especially if they’re moms with kids.  So the checkout line becomes the most important place to market candy.
  • Grocery stores have been experimenting for years with self-checkout.  Shoppers Food Warehouse has had self-checkout for years.  Tom says we should expect self-check-out to be more common in the future.
  • Even with self-checkout, there’s a check-out lane.  BUT, RFID promises an end to the checkout lane as we know it. Last year, for example, Microsoft announced a digital grocery cart that lets shoppers access grocery lists created at home, receive targeted coupons, and scan products as they go into the cart.  With the digital shopping cart, the checkout lane becomes a payment lane; no more waiting, no more scanning.

Yikes and wow!  So if you’re The Hershey Company, Mars or Wrigley, what do you do?  What kind of R&D and marketing initiatives do you start developing now — for the day when checkout lanes are gone forever or at least changed dramatically?

As I thought about candy makers, I realized that grocery stores and manufacturers have been significantly affected by the decline of another industry:  newspapers. Think about it.  Newspapers(especially the Sunday supplement) used to be the way consumers learned about store sales and coupons.  With fewer people subscribing to newspapers, how do they promote their products and promotions? Today, there are zillions of Web sites and mobile apps that will tell you about in-store promotions, offer you coupons and even comparison shop for you. Great for consumers, but a confusing landscape for marketers, for sure.

Finally, if candy makers are being affected by the demise of the checkout lane, what happens to the tabloids and magazines? I think the only time I pick up Southern Living or People is when I’m in the checkout line and passing time.  Ugh, another blow to the publishing industry.  (Hmmm…. did I really admit to my blog readers that I read People?)

How about you?  What technologies on the horizon could significantly impact your business?  And what are you doing about it?

Finally, do you buy candy in the checkout lane?  How will your candy purchases change if and when checkout lanes disappear?  Inquiring minds want to know…

6 thoughts on “What I Learned About Marketing From The Candy Man

  1. Merry Christmas to you and your family and staff Joanna.

    Thanks for the “My Favorites” section I will be doing my own review of Greg Mortenson’s book, it really looks inspiring.

    AL Shoaff

  2. Absolutely, I think candy and tabloid manufacturers should be worried; I use the self scanner at the grocery store all the time. In addition, you have to think about the grocery store employees. At my Giant, there are about 8 self checkout lanes, and they are all managed by one employee if someone needs help. As self-checkout lanes become more and more prevalent, the grocery store workforce will drastically reduce in size.

  3. I think the tabloids are in trouble with or without the checkout lane! The candy stuff, if technology is proceeding to the point where people are using digital shopping carts and lists, I would envision either putting chocolate at other key locations in the store, or them evolving to the point where your apps/iphone remind you that you need to buy chocolate!

    As far as technology that I see impacting our business, I have one word:

    Chatter!

    Imagine a social layer built on your enterprise CRM that combines Facebook, your CRM, and then is so deeply embedded into the platform it will integrate with other social networks, and also allow your “apps to talk to you”, and in addition, every app already built on the platform becomes social too (over 100,000 apps). Check it out here:

    http://www.salesforce.com/chatter/

    I can’t wait to see where it goes…!

    Garry

  4. Self checkout has definitely decreased the marketing potential of the grocery store experience. More than often, it’s entirely possible, if not preferable to got through the entire store without interacting with a single employee.

    I recently made my first trip to Wegmans when I was up in Philly for Thanksgiving and was floored by the number of employees they had throughout the store. Sure they are huge stores and probably have a massive overhead cost, but they have rotating displays of new and existing merchandise and employees offering free samples, cooking tips and recipes for customers that get them to see and engage with products.

    Mainstay items like Hershey Kisses and other candies haven’t changed in years. Doesn’t good marketing rely on differentiation and extension? Never mind how you check out, what makes you grab the product from the shelf in the first place?

  5. Hershey Kisses have gone through a ton of differentiation :)

    Dark Chocolate
    “Hugs”
    Almond
    Peppermint
    Caramel
    Peanut Butter
    Cherry
    Truffle!

    I remember when I was a kid they only had “Plain Jane” Kisses. Now there is a plethora!

    I do agree on some points. #1 – Wegmans is Awesome! #2 – Less marketing potential with automated checkouts/interactionsn with employees is imminent but I think they just may figure out a way to grab our attention before this all comes to a head ;)

    Garry

  6. I agree. I live near a Harris Teeter and because I often walk to it, I always end up going through the express lane, which is not located in the regular check out aisle. But, on the other side of the store. And, there is no room for candies, tabloids, etc. We do though have a lot of displays. The Harris Teeter also does something interesting with candy. It displays all the festive candies (holiday, halloween) in front of the aisles where tons of people pass by. You seriously can’t help but pick up a bag of chocolate then.

    It’s all about getting creative with your displays and placement of items in your store when it comes to promotions.

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