The retail apocalypse is causing one company to rethink its entire strategy



Based on Hershey’s big push into e-commerce, it should
be getting a lot easier to buy candy bars like this
online.

Lee Jae
Won/Reuters


It didn’t take long for Hershey
to mention its push into e-commerce on Wednesday’s
earnings call
.

In prepared remarks at the beginning of the conference call,
president and CEO Michele Buck listed online retail as a major
focus and potential growth area for the company. She mentioned
collaboration with brick-and-mortar retailers, as well as efforts
to better accommodate the needs of online shoppers.

Her comments did not fall on deaf ears.

Credit Suisse analyst Robert Moskow circled back to them during
the Q&A portion of the call, asking about what he interpreted
as a “change of tone regarding the sense of urgency to get bigger
in e-commerce.” He mentioned that in his discussions with
investors, he’d noticed concern over the dwindling number of cash
registers — the epicenter of the confectionary impulse purchases
so crucial to Hershey sales.

“I think it is fair to say that we are dialing up,” replied Buck,
who also stressed that Hershey’s impulse and take-home business
showed “pretty strong performance” during the period.

The CEO went on to discuss how Hershey is reinvesting additional
resources in the e-commerce imitative and partnering with
customers. She noted that there’s major interest among the
company’s brick-and-mortar partners to expand online offerings.

The entire exchange echoed many others occurring all over the
retail industry right now, as cash-rich and acquisition-happy
online conglomerates like Amazon
disrupt the whole landscape. Companies are scrambling to stay
competitive as consumers increasingly shop online, adjusting on
the fly to changing conditions.

Hershey’s efforts also show that it’s not just traditional
brick-and-mortar shops that have to adjust. The sweeping changes
are affecting companies all across the retail pipeline, from
suppliers to those that provide back-end services.

For a recent example of how quickly a retailer’s fortune can
change, look no further than Blue
Apron
, the meal-prep delivery service that recently went
public. Mere weeks before its initial public offering was
supposed to price, Amazon bought Whole
Foods
for a
whopping $13.7 billion
.

It was terrible timing for Blue Apron. Many potential
investors quickly identified the possibility of more competition
in the food-delivery industry and ran the other way. As a result,
Blue Apron took a cleaver to its IPO range, cutting it to $10 to
$11 a share, down from $15 to $17. The company ultimately

priced at $10 a share
— 40% below the maximum it had
sought.

Blue Apron has since been on the receiving end of even more
bad news, with its stock closing 32% below its IPO price on
Wednesday.

At this point, there’s no way around it: the company got
“Amazon’d” — the Business Insider-coined term used to describe
when a company’s entire existence gets rocked by the Jeff
Bezos-led tech titan.

The growing juggernaut remains a spectre that still
looms over just about everyone, and it’s clearly affecting
corporate behavior all across the market.

In the meantime, Hershey remains confident about their push into
online retail, and says its in-store sales are holding up just
fine.

“We have been able to win in-store even as e-commerce has
accelerated,” the company’s president Todd Tillemans told
Business Insider. “Right now, we’re focused on partnering with
retailers and investing in capabilities to unlock growth for our
brands online. I believe we are in a really good position to win
in an omni-channel world.”


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