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  1. #1
    Network Rep & ABW Ambassador Carolyn - ShareASale's Avatar
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    Hershey closing its online store...
    Yowza...via the LA Times, Hershey closing its online store:

    "The nation's second-largest candy maker decided that 'the current business model is not sustainable.' The company is offering 25% off on all items until the website's closure on July 31."
    http://tr.im/r5Mo

    Man...so sad. On a positive note, there are a bunch of really great chocolatiers on ShareASale that do well! (Which kind of surprises me that these guys do well, and Hershey's didn't?)

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  2. #2
    The Seal of Aproval rematt's Avatar
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    Just goes to show you that a well known name and great products mean nothing without proper promotion.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  3. #3
    ABW Ambassador CCBerries's Avatar
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    Rematt,
    I could not disagree more, Hersheys is a manufacturer and distributor with an extremely small direct to retail exposure. Many of the products sold on the web site offered various type of customization, and the more a product can be customized the higher the labor costs and chances that something will go wrong.

    Everything I saw on a quick pass through the store required express shipping during the summer. Shipping chocolate during the summer is risky, there is a lot that can go wrong and when it does the product is ruined. The merchant can do everything right, the carrier can do everything right, but if the customer leaves the package out on their front porch for 8 hours the merchant looses out.

    Customers rarely pay list rates on express shipping, itís almost always subsidized and the merchant pays even if the shipment is ruined due to a weather delay or the customer not being home to accept a package.

    Hersheys may have simply decided that the web store was too high a risk and overall profits too low as compared to itís normal product line.

  4. #4
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    > "Hersheys is a manufacturer and distributor with an extremely small direct to retail exposure." <

    And there it is: one of the most recognized trademarks of a national brand, which is almost never sold direct to consumers. They have no expertise in direct sales, yet any effort requires absolute perfection to avoid damaging the brand. From a risk/reward angle, this was probably a bad idea right from the start.

    Instead of closing the store, they should sell the business to a niche company to operate under another name, but of course "featuring Hershey products."

  5. #5
    The Seal of Aproval rematt's Avatar
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    Oh, well their loss my gain. There are some great products on their site and I've got a couple of friends (who just happen to be chocoholics) with birthdays this month so I'm stocking up.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  6. #6
    Half a Bubble Off Plumb RemodelingGuy's Avatar
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    Quote Originally Posted by rematt
    Just goes to show you that a well known name and great products mean nothing without proper promotion.

    -rematt
    werd -

    Guess the on-line world just isn't ready for the Hershey Highway -

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  7. #7
    The "other" left wing davidh's Avatar
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    Surely the fact that their products are available in virtually every retail store on every corner of every street must have a huge impact on the viability of online sales.

    A "fine chocolatier" can thrive online. Hershey's, Coke, Pepsi, Wonder Bread.... forget about it.
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  8. #8
    The Seal of Aproval rematt's Avatar
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    Quote Originally Posted by RemodelingGuy
    Guess the on-line world just isn't ready for the Hershey Highway -
    I'm not sure that most of the online world even knew that they had an online presence. Even with their logistical issues pointed out by CCBerries, I would have to imagine a broader customer base would have given them a better chance of success. Perhaps not, but I'm curious as to how other online chocolate retailers have managed to survive.

    Quote Originally Posted by markwelch
    Instead of closing the store, they should sell the business to a niche company to operate under another name, but of course "featuring Hershey products."
    It looks like they are entertaining a few other options:

    Saville said that the company was looking into other e-commerce options, including strategic partnerships and licensing agreements.
    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  9. #9
    ABW Ambassador CCBerries's Avatar
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    A lot of the products in their store are similar (if not the same) as what they already sell to distributors/retailers, but itís the gift packaged versions, not the bulk or single candy bars.

    For the personalized products they might be planning on focusing on what they know, manufacturing and distribution and letting the gift and specialty shops do the marketing, customer service and when possible the final customization. This reduces their risks and allows the products to be shipped using the normal distribution channels. For a company of that size: having one tiny division that deals direct to the consumer is an annoyance when they can sell the same products through existing channels with a lot less aggravation.

    In the chocolate business and perishable gifts market when things go wrong they go very, very wrong, an example was an online shop up in Maine that made a very unique, very popular product, it received a ton of promotion from the various media outlets... but they got hit with blizzards at their two peak sales periods, Christmas and Valentineís. Closed airports equals no FedEx/UPS deliveries. As a result they ended up with a world class mess, $250k in debt and the customers that blamed them for the weather.

    A few years ago a blizzard shut down all the FedEx hubs from Indianapolis to New Jersey during the peak Valentineís Day shipping/delivery period. As anyone who has studied how thing really work in the overnight delivery business knows : a closed hub in an unrelated city like Indianapolis may keep your package from being delivered to San Diego. It is an extremely risky business and some of the bigger names in the business are parts of much larger companies that have the financial resources to fall back on when their world goes sideways.

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