2021 Category Captain for Candy: The Hershey Co.
In the third quarter of 2019, a price increase took place on king size and standard bars across the entire confection category. As a result, king size bars were going to be crossing the $2 threshold on-shelf for the first time. Advanced price models that predict shopper behavior due to price action suggested that year-over-year unit conversion on king size bars could be as low as 82 percent; a $189-million risk to the confection category.
Understanding the need to build baskets per transaction to counter unit conversion forecasts, Hershey partnered with Eversight, a price optimization software suite, to understand which everyday two-unit prices resonated with the c-store shopper on king size and standard bars.
From the test, Hershey found that simplified pricing — pricing that is easy for the shopper to quickly calculate — drove the greatest engagement despite having a less than 10 percent discount from the regular price. In 2020, the company partnered with retailers and distributors to execute its "Everyday Multiples" pricing strategy across 28,000 convenience stores.
In one example of innovation driving category results at a partner retailer, Hershey worked with Waze Media, the GPS navigation app, to improve results at 7-Eleven. When sales declined during the peak of the pandemic, 7-Eleven approached Hershey’s omnichannel marketing team for a strategy to drive foot traffic back to the stores. Hershey found that while driver volume was still down in April and May, consumers were driving longer distances, opting for road travel rather than air. The analysis suggested more drivers could hit the road long term with gasoline demand possibly surpassing 2019 levels.
By June, Waze navigations to c-stores fully recovered and were up 17 percent in August compared with pre-COVID levels. Through this analysis, Hershey decided to lean into Waze to drive foot traffic to 7-Eleven by promoting its "King Size Multiple Price" strategy.
