Everyone in the confections business knows that one of the constants in seasonal candy is change--the constant rotating of various holiday candies to come one right after the other. The joke among consumers is that the day after Christmas, Valentine candy is available, and on February 15th,
In a recent presentation on seasonal candy trends, Tom Joyce, director of consumer and industry affairs at Hershey Foods Corp., shed some light on how consumers' seasonal candy shopping patterns have changed, and what that means to candy manufacturers and retailers. Of particular interest are Joyce's following points.
Compression/Pricing. Seasonal compression is occurring in the industry, meaning that volume is shifting among the last three weeks of the selling season. According to research by IRI, just under 11 percent of total seasonal dollar sales have shifted into the last three weeks prior to the holiday. Apparently, purchase patterns are becoming more volatile during the last three weeks because of poor training on the retailers' part.
"By consistently promoting seasonal candy at 'hot' price points during the final week of the season, retailers are training repeat purchasers or consumers who typically purchase later in the season, to wait until the last week," says Joyce.
"A more productive strategy would be to use 'hot' price points to entice early and mid-season purchases, which would drive repeat purchases" (due to the likelihood of consumers eating the candy bought earlier). What's really wrong with the current strategy is that "ironically, consumers who are desperate in the last few days probably would be willing to pay more," Joyce maintains.
Along with these pricing strategies, retailers are also encouraged to leverage complementary categories (both edible and non-edible) to drive feature and display activity and become the seasonal shopping destination.
Assortment. Newness and name brands count in seasonal. According to the IRI research, new items, including Limited Editions, were responsible for 100 percent ($537 million) of total category growth. Also, the top 15 brands contributed greater than half of total sales for each season. These both add up to retailers making the assortment as fun as possible, according to Joyce.