Photo: NRF

Hershey sells insights

The key to Hershey’s recent success has been its “willingness to share data and share the insights” into what it has learned with its retail partners.

That’s according to Michele Buck, the brand’s president for North America, who spoke about Hershey’s “knowledge journey” at a midday session Sunday at the NRF Big Show. She particularly elaborated on ways Hershey’s double-downed investment in “knowledge and insights” has furthered collaboration with retailers.

The first way is helping Hershey make the shopping experience more “fun and engaging,” which has become more critical for grocery with the emergence of non-traditional channels such as online and dollar stores.

At in-store concepts, consumers are now taking pictures of themselves next to merchandising materials as a show of their Hershey enthusiasm. Supervalu has introduced end caps that “draw [consumers] into the aisle.” At Giant Eagle, consumers can personalize Hersey Kisses with messages such as “XXOO With All My Heart” on the bottom. Hershey is also helping grocers with front-end productivity, including labor efficiency and recommendations for “micro-space planning.”

A second area where Hershey taps insights is around consumer and store data to make sure “every inch of your store’s even more productive.” Hershey’s extensive shopping habits data, down to the zip code, complements each store’s data to guide local store planning. Said Ms. Buck, “There’s more data available than ever before and it’s critically important that we mine all that data and really leverage it for success.”

Finally, Hershey builds “end to end supply solutions,” marrying customers’ data, Hershey’s data and third-party data such as Nielsen’s to “build efficiencies into that global supply chain,” reducing out-of-stocks, lowering net inventory and optimizing the product mix.

She stressed using a “category-first approach” in shifting from the traditional transactional nature of selling to “really being consultative” and a “true value partner” in helping boost sales across the entire store.

Said Ms. Buck, “We sell confections but we also sell insights to improve that retailer’s total box. And that’s given us a seat at the table to help them grow their business in new and different ways.”

BrainTrust

"There are surprisingly few vendors that can walk the walk and invest resources in working on problems that aren’t directly solved with routine commercial tactics that benefit their brands. Sharing data better aligns both parties and gives them better odds of getting the big decisions right."

Keith Anderson

Founder, Decarbonizing Commerce


"If you already have a solid brand and share credible insights that are useful in ringing the register, you’re making a wise move. The challenge is the desire on the vendor side to push massaged, self-serving data and "insights." That’ll never go away."

Warren Thayer

Editor Emeritus & Co-Founder, Frozen & Refrigerated Buyer


"At the end of the day the retailer should be in charge of their shelves, departments and total store, not the manufacturers. It isn’t a partnership, after all, unless you put some cash next to all that data you’re giving away and agree to share the risks of bad decision making."

Ryan Mathews

Founder, CEO, Black Monk Consulting


Discussion Questions

What do you think of vendors positioning themselves just as much as sellers of “insights” as of goods? What are the key challenges for both vendors and retailers in having data sharing drive retail relationships?

Poll

15 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Chris Petersen, PhD
Chris Petersen, PhD
8 years ago

Results count — everything else is conversation.

Many of these concepts have been discussed in retail for a long time. A key difference today is “Big Data” and the ability to actually measure results at the micro level.

The key is the trust and partnership to share the data. There has to be a win-win in the relationship for both partners. The ability to reduce inventory and improve in-stocks is an example of a major result that benefits both parties.

The best things in life are NOT free. Systems to gather, manage and analyze the volumes of data require someone to make significant investments. Those funding the systems need to be able to recover some costs either by “selling insights” and/or through improved results.

The interesting question going forward will be, who owns the data? And subsequently, who owns the category insights?

Robert DiPietro
Robert DiPietro
8 years ago

This is tremendous value to the retailer and will help with the retailer relationship. The retail buyer is time-starved and to have a partner offer some insights at the category and store level can only help both the partner and retailer and ultimately the customer. It is also likely that the smaller retailers are not investing as much to provide the data analytics that a large vendor can supply.

Steve Montgomery
Steve Montgomery
8 years ago

The providing of insights by a manufacturer is simply an added tool to sell more goods and build a closer relationship with the retailer. I don’t mean to imply that is a bad thing. In many cases the manufacturer has gained insights that the retailer may not have access to and that can help both sell more stuff.

The issue for the retailers is no different than they face when selecting a category captain. Using one firm’s insights/data always carries the risk that there is a built-in bias that favors that firm and their products over its competitors. A risk for the company providing the data is that by implementing it the retailer is defacto sharing their insights with their competitors.

Mohamed Amer
Mohamed Amer
8 years ago

Ignoring data in retailing today is like pretending to ignore the weather. But unlike the weather, you CAN do something about data to be a smarter and more collaborative retailer or CPG company.

It has become arcane to think in 20th century concepts as CPG companies only make goods and distribute via channels to consumers and retailers only sell those goods to customers. Technology is upending the notion of tradition and control. Consumers make decisions with an unprecedented amount of information and in ways never seen before. So, it’s only natural that true collaboration and a re-imagined relationship between Retailers and CPG companies comes to fruition in this data-rich world — aka the digital economy. Insights are a natural outcome of data which go a long ways in helping both CPG and retail create the experiences to differentiate and that consumers seek.

Kudos to the Hershey Company and Ms. Buck!

Keith Anderson
Keith Anderson
8 years ago

It speaks to the power of insights and analytics, and more importantly of positioning as a trusted advisor focused on the retailer’s challenges over the vendor’s.

There are surprisingly few vendors that can walk the walk and invest resources in working on problems that aren’t directly solved with routine commercial tactics that benefit their brands.

Sharing data better aligns both parties and gives them better odds of getting the big decisions right.

Dr. Stephen Needel
Dr. Stephen Needel
8 years ago

The vendors I know have always been craving the ability to share their insights with retailers. So what Hershey is doing is nothing new, per se. It may be that retailers are showing more interest in that process. This strikes me as basic category management.

Warren Thayer
Warren Thayer
8 years ago

If you already have a solid brand and share credible insights (and I stress credible) that are useful in ringing the register, you’re making a wise move. You’ll move closer to actual partnering, and both sides will benefit. The challenge is the desire on the vendor side to push massaged, self-serving data and “insights.” That’ll never go away. It’s all a matter of degree.

J. Peter Deeb
J. Peter Deeb
8 years ago

Larger brands and market leaders can afford to provide the insights on the consumer much more than a medium-sized or regional company. The key is transparency and accuracy. The “category first” idea is not new but both retailers and manufacturers have been known to skew the information toward their brands and/or toward store brands. True category growth requires adherence to the accurate data no matter which brand it favors. There is always wiggle room for data manipulation to fit a retailer’s strategy but the data coming from the manufacturer needs to be factual.

Adrian Weidmann
Adrian Weidmann
8 years ago

Congratulations to Hershey for stepping out and leaning in to take a leadership position. For years retailers and brand partners have created a toxic relationship based upon mistrust and extracting cash before anything was even sold! They are realizing that if they support each other and share insights both will get better and prosper. Hershey has definitely earned a valued seat at the table and their retailers should listen intently and learn in order to become better retailers across their entire ecosystem. Those that don’t are squandering an invaluable opportunity.

Ryan Mathews
Ryan Mathews
8 years ago

The information surrounding — or generated by — a product is worth far more than the product itself.

That said, without the proper analytical model and framework and algorithms to prosecute raw data and combine it with other, similar, streams of information, it isn’t worth all that much.

Beyond this, the real problems are that data can be manipulated to drive any agenda and, perhaps more critically, that at the end of the day the retailer should be in charge of their shelves, departments and total store, not the manufacturers.

It isn’t a partnership, after all, unless you put some cash next to all that data you’re giving away and agree to share the risks of bad decision making.

Richard Freund
Richard Freund
8 years ago

To properly drive the optimum sales of a retail location, insights about goods, demographics and POP that “pops” are necessary. To have insights you must have a presence at the store level.

J. Kent Smith
J. Kent Smith
8 years ago

Both suppliers and retailers have the potential to bring complimentary expertise and insights to the table. Problems arise when the work becomes one sided: over reliance on suppliers, working with just one supplier, or working with none. The trick here is balance. To state the obvious, for collaboration to work you have to actually collaborate, not just “outsource” the work to a supplier or two because “it’s free.”

Vahe Katros
Vahe Katros
8 years ago

The tail is wagging the dog. I guess that’s what happens when retailers got into the business of selling shelf space and clean floors.

Look, vendors are not only vendors! They are designers first, and to be designers they need to have intimate knowledge of their customers and the store is where customers can be found.

Takeaway? It’s time for retailers to think inside the box! The challenge is developing new ways to gather collaborative insights sourced directly from people vs. data. Data is cool, but insights are in the empty space. Great work, HSY!

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
8 years ago

Excellent example of how retailers and vendors can work together to create interesting shopping experiences at the local level. Key challenges include the desire to do this at the top, employees using great analytics, employees who can use that information for creating great solutions, employees who understand collaboration, and a way to integrate data from retailers and vendors about consumers. These are formidable challenges; seeing examples of success is encouraging.

Mihir Kittur
Mihir Kittur
8 years ago

Data-sharing between merchants and their retail partners is a two-way street, and Hershey’s is setting a great example. This type of synergy is just one of the many ways to capitalize on the ongoing data explosion that is happening in retail. Retailers need to adopt an outside-in analytics approach to understand the market, competitor and customer insights to make better planning and assortment decisions.