This competitive intelligence report discusses confectionery companies’ strategies related to using digital in sales and marketing, throughout the confectionery shopper’s journey.
Digital technology has proved to be an opportunity in confectionery: it allows companies and retailers to reach new consumers, establish a direct rapport with existing ones, and advertise more effectively.
According to FBP 2016 report, about 30% of US shoppers have purchased confectionery online, and according to MyWebGrocer’s study, candy and snacks are included in 77% of online grocery orders.
Combined, they make the fifth most popular category purchased online after dairy, produce, beverages, and frozen food. The category registered a 2015 growth rate of 15% – like that of total e-commerce. Chocolate, dominating online confectionery sales with 69% share, grew at a 15% rate, and non-chocolate sales grew by 28%, driven by caramels (+62% growth), marshmallows (+29%), and gums and mints (+14%).
But digital is also a threat for the big players: the marketplace has been upended, more and new channels invite new entrants, entry barriers have dropped. Impulse shopping may suffer, and ease of online price comparisons may undermine pricing power.
AMAZON, the leader in e-commerce confectionery sales, introduced new concepts in confectionery.
The Surprise Dash Button is a new take on impulse purchase, with offers of curation of handmade confectionery makers by pressing a “dash button” in the consumer home. This emphasizes the company’s uniqueness and provides smaller, artisan brands with a potent platform.
Other e-commerce competitors, such as IT’SUGAR and DYLAN’s, focus on creating an online environment which mimics the brick and mortar one, utilizing sales data to make more compelling offers.
Confectionery giants such as Nestle, Hershey’s and Mondelez, as well as smaller companies like Kind and RXBAR, experiment with personalization, crowdsourcing and direct-to-consumer tactics.