Hershey Rebuilds Around Insights

Rosemont, IL — When mergers in the confectionery industry threatened Hershey’s top-dog status, the company reorganized to survive. The shakeup prompted two years of proprietary research focusing on insights that drive decisions, retailer collaboration and brand connection to shoppers, said Michael Depanfilis, Hershey Co.’s vice president of shopper marketing, during a presentation at the 2012 Shopper Marketing Summit.“You ask anyone in our organization [and] we will tell you we’re not a confection company,” said Depanfilis. “We’re a knowledge company with confection experience.” In its simplest form, Hershey’s "Insights Driven Performance" (IDP) model leverages insights to drive demand.Depanfilis said Hershey’s IDP approach is using data to help collaborate with retailers and also to help find common ground within Hershey. He said IDP enables the company to have dialogue with retail customers at higher levels — from vice presidents to CEOs — and across more departments.If a retailer has a key metric used to measure success, Hershey now has that metric built into the planning process relevant to that retailer, annually and three years into the future. Those metrics are always paired with a focus on demand, said Depanfilis.“If you know how to drive demand, [then] you align your organization around demand, you talk a similar language, you have a common format,” he said.The millions of dollars behind IDP help to fund proprietary research in demand segments, confection missions, retailer selection drivers, in-store navigation insights, and drivers of item and quantity selection. Every step on the path to purchase is covered, Depanfilis said, which leads to trust and constructive feedback from the retailer.The data is refreshed every two years, Depanfilis said. None of it works, though, unless the entire company is committed. “Everyone in our organization talks IDP,” he said. “Everyone’s writing decks and presentations and we’re getting better and better at it.”Hershey’s accomplishments over the past few years illustrate how shopper marketing is evolving with increasing speed. The discipline of “shopper marketing” has been broadened over the years through a number of seismic shifts, according to co-presenter Patrick Fitzmaurice, principal at The Capre Group.By Fitzmaurice’s account, grocery retailing began as self-service at Piggly Wiggly in 1917. Bigger stores and lower prices arrived around 1930, followed by the shopping cart a few years later. Brand marketing from packaged goods companies took off in the 1950s. UPCs and scanners arrived in the 1970s and helped power a research explosion. That led to a focus on category management in the 1980s and ultimately to shopper marketing and insights around 2007.Those changes, while they ultimately altered the landscape, took a century to evolve. Game-changing shifts are happening much more quickly in these digital and mobile days, Fitzmaurice said. He cited data that found 62% of smartphone owners planning to use their devices while shopping last holiday season and reviews by peers on social media as five times more influential than advertising.A recent study found that the best-performing “shopper solutions leaders,” as Fitzmaurice called them, were more likely to customize displays and messaging. Nearly 90% of leaders collaborate with retailers to maximize influence, and a quarter of these top performers were more likely to leverage digital in their campaigns.Fitzmaurice compared a CPG organizational alignment to proprioception, the body’s awareness of what the rest of the body is doing. The existing structure — including marketing, sales, merchandising, category management, insights, agencies and retailers — was designed for success in the pre-digital age.“Are we fully aligned?” he asked. “What does it mean to be fully aligned, to be shopper-centric?”

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