Despite the push to drive holiday shoppers to ecommerce, Hickory Farms still sees a big part of their seasonal sales through brick and mortar. Judy Ransford, CMO of the Chicago-based specialty food company spoke with eMarketer's Andrew Lipsman about their holiday outlook for both online and offline.
eMarketer: We expect 2018 holiday ecommerce sales to grow at a strong 16.2%, representing 12.5% of total retail sales this season. We also estimate steady growth (2.6%) from brick-and-mortar stores. What’s your outlook for the 2018 holiday season?
Judy Ransford: We're looking for growth this holiday season. Right now, we're in the midst of implementing a growth strategy—we're introducing many more new products this holiday season than we have in the past, and increasing marketing investment. We also expect a continued shift to ecommerce and mobile, we're leaning into that and we've increased investment to drive growth.
eMarketer: You see a high percentage of your brand’s sales during the holiday season. How does that break down between online and offline?
Ransford: We operate brick and mortar retail outlets and malls during the holiday season—that’s a big part of our business. But we're still seeing more customers engaging with us both online and brick and mortar.
During the holiday season, our brick and mortar does about 2x the sales volume compared to our ecommerce business. By and large, brick and mortar has been growing across the last several seasons, but a much more modest low single-digit growth. In contrast, the ecommerce business is growing at a much higher growth rate.
eMarketer: One of the interesting dynamics for the 2018 holiday season is the maximum numbers of days—32—between Thanksgiving and Christmas. Does this extended calendar have any impact on the shape of the holiday season spending for Hickory Farms?
Ransford: The most relevant time on the calendar for Hickory Farms is the number of shipping days in December. Because we're a food gifting brand, our season comes later, and every year it seems it's coming later and later. Thanksgiving starting earlier this year is not nearly as significant as the last couple of weeks before Christmas for our business.
eMarketer: Have you found that consumers are getting more confident with delivery—in time for Christmas—later into the season?
Ransford: Absolutely. It moves later and later. The impact of what Amazon has done with their distribution network is setting the standard for consumers. They're comfortable that their order is going to get there in one or two days, which really creates a big challenge, because obviously all the distribution networks whether it's UPS or third-party shippers are just super burdened at that time. There's a major scramble for that scarce shipping capacity. Consumers' expectations aren't necessarily aligned with what's available in terms of total shipping capacity in those last few days before Christmas.