Job title: Customer development director
Company profile: Ferrero is a leading family-owned global company, and the third-largest player in the global sweet packaged foods market. Its brands include Nutella, Tic Tac, Thorntons and Raffaello.
Latest news: Ferrero has unveiled its Christmas range for 2019
How is convenience changing?
We’re seeing the grocers’ convenience stores become savvier at tailoring their ranges to their area. Sainsbury’s can now tailor 85% of its stores to local demand. We’re continuing to see shoppers becoming savvier, too, with 30% of people putting products back on the shelf if they discover they can get it cheaper elsewhere and 68% of them using coupons.
The confectionery market is resistant to these lifts and drops in consumer confidence. We operate in a sophisticated and enjoyable category, meaning that price isn’t necessarily the most important factor.
What do retailers need to be aware of ahead of Christmas?
Christmas is a challenging time for independent retailers, with deep-cut promotions on confectionery in supermarkets making it hard to compete.
Last year, we saw twist-wrap formats decline by 10.8% in convenience, with smaller stores reducing their seasonal range by 6%. However, stocking fillers are in growth, showing that it is essential to back the products that won’t be discounted. Focus on gifts and novelty over regular sharing packs.
Christmas is seen as a time to splash out, confectionery spend was up 4% in the weeks running up to Christmas 2018.
How should retailers get the Christmas season started?
Seasonal impulse is key early on in the season, with some retailers stocking as early as September. This year we are entering this category for the first time with Thorntons Cheeky Elf, available as a 29g line, with an RRP of 75p. We predict that shoppers who try Thorntons early in the season will be more likely to return to the brand later on when buying more expensive products, like gift boxes.
We’ve seen other brands such as Maltesers and Cadbury do well with this strategy.
How should retailers approach gift confectionery at Christmas?
It’s important to understand the different kinds of gift within confectionery. Single flavoured chocolates, like Ferrero Rocher, are what we call ‘give to share’. The person giving would expect that the box is opened upon being received and shared with the group. Thorntons is more about giving just for them as they are an assortment.
Retailers should get their gift ranges in place by mid-November.
How can retailers cash in on other celebrations, such as Diwali?
We see Diwali as a significant growth area, both for ourselves and independent retailers. It presents a £500,000 sales opportunity for symbols and independents, and during Diwali and Eid, we see the boxed chocolate category grow by 9.4%. In large stores, with the right activations in place we’ve increased sales by 20.4%.
Shoppers want something that looks fancy and are happy to pay for it, meaning promotions are not as important. This year we’ve launched PoS kits that are specific for smaller retailers, which are available from our Your Perfect Store website.
How is Ferrero continuing to invest in its insight?
We opened our Shopper Experience Centre at our head office in west London three years ago and it continues to be a key area of investment.
It contains a physical store, as well as powerful virtual reality software that enables us to create planograms in partnership with retailers. So far this has mainly been with the multiples and symbol groups, but we want to make this tool accessible to independents.
One of the ways we are doing this is by investing in virtual reality headsets, which we can bring to the retailer with our field sales team and help them create a range that is tailored to them using these insights.