Tracking Hershey Digital Transformation Journey

Jul 07, 2023

It’s been a while since we covered a focused post on ‘Digital Transformation’ on Outside In. Speaking or reading about digital transformation seems outright vanilla today, considering that every organization in every industry is already working on it in some (advanced) form

An Outside In long-post from 2020 on How to Influence Digital Transformation and Win as an Organization seems to be written in another era altogether (though the framework still stays relevant and only the ‘how’ changes): https://outsideinlens.blogspot.com/2020/05/how-to-influence-digital-transformation.html

The trigger for this post came from a recent read on Hershey’s Digital Transformation story that I came across here at: https://brandequity.economictimes.indiatimes.com/news/digital/digiplus-fest-2023-hersheys-sweet-somethings-with-digital-transformation/97583889

It reminded me of Outside In’s own coverage of Hershey’s efforts to create Value in a Shopper’s World here at: https://outsideinlens.substack.com/p/creating-value-in-a-shoppers-world

Combining these elements, I thought it will be worthwhile to have a peek into Hershey’s Digital Transformation initiatives in more detail. Hoping that it will be a sweet read…

Shopper Behaviours are driving Digital Strategy Decisions at Hershey

Shoppers are still shopping, but their Options have Expanded: There are billions of pay points that are literally in a consumer’s pocket. Shoppers no longer need to have transportation or take time to visit a store. They simply need a phone, computer or tablet, and they have insta-access
Online trips are driving bigger Baskets: While a shopper may not be interested in purchasing a single candy bar in a large online order, he is interested in buying a pack of those candy bars (Hershey is accommodating that by offering larger pack sizes with more diverse offerings in a single pack)
Content is Key: By content, it means the design of the pack. In the digital world, the shelf is now the screen. Rather than presenting a package that’s “foot-stopping,” it must be “thumb-stopping”. With each pack, the aim is to have a product and product count that can be identified in a glance
Search is the new Strike Zone: The team at Hershey refers to eye-level shelf space as the “strike zone.” In e-commerce, that strike zone applies to online search. Getting items listed on the first page is essential to getting them in front of consumers’ eyes, into baskets and onto a regular shopping list
Conversion is Golden: When you shop online, retailers that have created a smart system will store the list and allow shoppers to use it to populate future lists. It’s key to get a product on that list, whether it’s through search, paid ads or other techniques, he says. Once a product makes it in, it continues to market itself

Context and Illustrations of Digital Transformation

Digital transformation as we know is the use of digital technologies to create or modify existing business processes with a view to enhance customer experience across the spectrum. Digital marketing, often confused with digital transformation, is just one piece of that transformation puzzle. Supply Chain, Marketing, Finance, Backend (Operations) and HR – all have a digital leg to it. Making things done without human intervention is going to make the consumer experience smooth and faster. There’s hardly any function which is not impacted by digital transformation. – Geetika Mehta, Hershey India

1) Digital-first Marketing Campaigns

In March 2022, Hershey India announced the amplification of its ‘HerShe’ campaign, which sought to recognize, honor and uplift women and girls through activations in India (and around the world) in celebration of International Women’s Day to continue to advance its gender equity commitments

They collaborated with six women achievers whose accomplishments were custom illustrated on Hershey’s chocolate bars. It leveraged technology to create an online community for curating and showcasing inspiring stories by women and connecting to offline channels via QR code on the packaging

Consumers could scan the QR Code printed on the packaging of Hershey’s Bar that linked them to (always-on) microsite: https://www.hershe.co.in/

The microsite had curated templates, with personalized messaging, that consumers can use to celebrate and share the stories of Sheroes who have inspired them. 11K+ ‘Sheroes’ were celebrated
For unveiling the campaign, it took the route of a celebratory rap song – A HerShe Anthem – by American Indian Rapper Raja Kumari and Indian musician Meba Ofilia:

2) Supply Chain Transformation, with rise of E-Commerce and Consumer Spends on Healthy Foods

Hershey India’s e-commerce business grew four times in terms of its contribution to business in 2020 as compared to its contribution in 2019. Close to 10% of the company’s domestic business sales came from e-commerce and the growth trend has continued since then. Factors like convenience, safety, choice and value, along with easier access to faster internet speed on mobiles, are accelerating the adoption of e-commerce
To tap the demand for healthy foods, Hershey India has built its plant protein brand Sofit. It has launched fortified Sofit almond milk and continues to innovate and add more products to the health category

The company products were made available on delivery apps like Swiggy and Dunzo with a Hershey online brand store called Hershey Happiness Store in 2020. Swiggy and Dunzo deliver Hershey’s much-loved brands and products to the shopper’s doorstep in select cities

In India, the transformation scope includes everything from order taking that the last retailers gets to their distributors, to getting the (order) data at a quick speed, to ensuring continuous stock replenishment
They have invested in cold chain solutions at the point of sale (POS) which helps them track productivity every month, by giving them more data points to analyze and deploy solutions
These initiatives help them have fresh stock at almost 250K+ stores where they have presence
Globally, Hershey is aligning its supply chain to changing world demographics as well. Check out this insightful read here at: https://www.supplychainquarterly.com/articles/1773-chocolate-bars-and-population-shifts-how-hershey-s-supply-chain-is-adjusting-to-changing-demographics

3) Product R&D and Innovation Centre in Asia

In 2022, Hershey had announced the opening of its new R&D center located in Johor, Malaysia. Investment is a core part of the company’s strategy to drive international growth through innovation. This new facility will enable Hershey to quickly develop, test, and launch new products customized to the tastes of consumers across the AEMEA and India region, and will become one of Hershey’s largest R&D facilities outside of the United States

The 10,400-square-foot facility is a significant investment and will house R&D laboratories, a packaging development facility, and a sensory area, which will enable the company to partner with various innovation teams to taste-test and shortlist iconic products known and loved by consumers

4) Branded Experience Platform with Hersheyverse

In December 2022, the brand created a metaverse space called ‘Hersheyverse’ centered on a larger-than-life Hershey’s Kiss where all consumer interactions and engagement can take place. The brand will be offering quests, discounts, interactions, appealing landscapes and an exclusive wearable in Hersheyverse to give consumers a wholesome and an immersive branded experience around holidays

The experience was expected to be a memorable one, built on the universal language of chocolate where users complete quests (like Holiday Quest, Social Quest, A Sweet Surprise, Etc.), learn about sweet holiday traditions, explore virtual shops, and even earn exclusive rewards by completing quests
With this activation, it was aiming to create an experience that helps the brand connect with Gen-Z consumers around the holiday season. There will be non-player characters (NPC) who will guide users to explore the space. There were shopkeepers who represented different markets like India and would highlight the most popular Hershey’s products during the holidays from the country. There will also be various rewards in terms of power-ups and an exclusive wearable

Snapshot of Hershey’s Digital Strategy – Keys to Success

Outside In will cover more details about these elements of Hershey’s Digital Strategy in the Next Post…

In Conclusion

One thing which remains constant is the challenge of connecting with consumers while the medium may change. An important aspect is to keep reminding ourselves that as digital transformation happens, you will want to speak with the same set of people; you will still need to connect viscerally with them. – Geetika Mehta, Hershey India

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References and Sources

1) Hershey’s Sweet Digital Transformation: https://brandequity.economictimes.indiatimes.com/news/digital/digiplus-fest-2023-hersheys-sweet-somethings-with-digital-transformation/97583889

2) HerShe Online Community Marketing: https://www.buzzincontent.com/story/hershey-india-celebrates-women-single-s-day-with-limited-edition-packaging-rap-song-more/

3) HerShe Website:

https://www.hershe.co.in/

4) Hershey India Supply Chain Transformation: https://retail.economictimes.indiatimes.com/news/food-entertainment/etretailtech-hershey-india-embracing-digital-transformation-to-register-growth/100540853

5) Hershey Supply Chain aligning to Demographics: https://www.supplychainquarterly.com/articles/1773-chocolate-bars-and-population-shifts-how-hershey-s-supply-chain-is-adjusting-to-changing-demographics

6) R&D and Innovation Centre in Asia: https://www.indianretailer.com/news/hershey-expands-offline-presence-opens-a-new-r-d-center-in-malaysia.n13411 and https://investvine.com/us-chocolate-giant-opens-research-center-in-malaysia/

7) FMCG Restructured Supply Chains: https://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcg-firms-have-recovered-successfully-due-to-restructured-supply-chains-and-adigital-first-strategy-etilc-members/articleshow/81514657

8) Hershey Happiness Store: https://www.indiaretailing.com/2020/05/22/hershey-india-partners-with-swiggy-and-dunzo-to-launch-the-online-hershey-happiness-store/