As grocery shopping online becomes more normalized in U.S. households, items from the beloved impulse buy section of check out aisles are struggling to keep up.
Chew on This
The sales of gum, chocolate candy and mints–the items that are rarely on grocery lists but somehow still make it into shopping bags–have diminished. These companies now face challenges regarding how to keep people impulse buying sugary sweets online.
Instead of changing their marketing scheme, however, companies are determined to use the same merchandising strategy of brick and mortar stores, just digitally.
AP reports that “companies are using targeted ads, like to frequent cookie buyers, or suggesting add-ons like gum if someone is just short of getting free shipping.”
Mars, the classic candy company, teamed up with gigantic online retailer Alibaba to sell more chewing gum. The company decided to shill gum having decided that it is the most impulsive seeming product.
They choose which products to display based on algorithms and a 500 product library.
Last year, Hershey’s began prompting customers to buy chocolate by providing dessert recipes, which were featured in Chef’d, a company that sells proportioned meal kits. The company said that it was aware of American’s changing eating habits, and it was trying to keep up with the cultural shift of “meal inspiration,” that is currently trending.
This desperate attempt to sell candy is a direct result of Hershey’s dwindling sales, which are down by 5%. The company is set to cut 15% of its global workforce in order to help increase the profit margin outlook. These jobs are mostly out of the United States and will include about 2,700 workers.
Cookies for Cookies
The company has also been dipping its toes in the infinite pool of Big Data to try to keep up with the competition. Last year, Hershey partnered with Infosys to build a predictive analytics capability using an open-source information platform on Amazon Web Services.
Cookie goliath Mondelez had a similar idea, using its analytics research to follow people it knows are “Oreo users” with targeted ads, said Tim Cofer, the company’s chief growth officer. The ads are specifically geared towards different kinds of customers based on the frequency of their buying habits.
Although these companies are losing profits, America still struggles with the overabundance and accessibility of over processed foods. I think it is fair to say that, having conditioned consumers to buy candy every time they are at the grocery store, many of these companies have contributed to the obesity epidemic and the rise of diabetes and other metabolic disorders.
Over 20% of Americans qualify as obese, and while this is not necessarily a death sentence, there is a correlation between the increased availability of inexpensive, processed treats and the expanding waistlines of most Americans.
The candy and processed foods industry’s increased reliance on Big Data is not shocking, but it does give a glimpse of how companies are using Industry 4.0 to adapt to market challenges.
Hopefully, Industry 4.0 will focus on developing a culture around long term progress and using technology to help increase our quality of life, not using it for short-term economic gain.