Brilliant seasonal marketing, product innovation, and ecommerce propelled this UK start-up to become a showpiece for translating seasonal marketing opportunities into big revenues.
Summary
Consistently strong product innovation for Valentine’s Day
Ecommerce excellence that maximizes sales conversions
A VIP loyalty scheme that drives customer retention and has become a gateway into subscription ecommerce
Challenge
How does a brand in a category at the heart of Valentine’s Day (and many other seasonal marketing moments), maximize its sales? How do you get a disproportionate share of ecommerce? And how do you turn one-off purchasers into brand loyalists?
Solution
Hotel Chocolat has a strong product innovation pipeline that can accommodate small events as well as big seasonal moments such as Valentine’s Day.
Their sales are a mix for selling through their own ecommerce platform, their own stores, and third-party retailers. Their owned ecommerce business has been a key growth driver since 2010. Later this evolved into a VIP loyalty scheme to build customer lifetime value. And that, in turn, evolved into subscription commerce for regular orders and their at-home hot chocolate kits.
Let’s break down their best-in-class innovation and ecommerce into its constituent parts…
Product truth
It starts with a brilliant product. This is a premium product portfolio that delivers on the promise of high-quality ingredients. The brand knows what it stands for, and there’s a cheekiness woven into the brand’s personality – many products are fun and playful.
Insight
Marketers track trends in gifting, culture, and food tastes. They can identify and prioritize innovation, with digital engagement analytics from their sites and CRM fuelling insight.
Product innovation
There is a massive innovation pipeline. The product innovation model hinges on packaging and reconfigurations in the production line that use existing ingredients. Chocolate flavors and colors can be combined in ways that reduce the need for extensive testing. The business also knows how to combine products brilliantly into bundles.
Product design
There has always been consistency in their design – from how the brand essence guides the personality through to its social media assets and product packaging.
Ecommerce shopper experience
Creating a best-in-class online retail experience that applies ‘perfect store online’ thinking to create excellent selling stories, powerful hero images, and intuitive product discoverability through search and shelf taxonomies.
Ecommerce-first packaging
To minimize shipping costs, packaging is designed around the specific weight and size criteria for posting, making the overall purchase as cost-effective as possible (an approach many competitors struggled with). Packaging meets the criteria for durability that’s an essential in ecommerce to avoid product returns. Their direct-to-consumer platform enables gift messages that are packaged in small gift cards – a big upgrade from the lines of message text on standard delivery paperwork offered by many competitors.
Customer-centric shipping
Shipping includes options for selecting specific days, enabling shoppers to order in advance. And the business has strong CRM notifications that give clear signposting for interim stages, such as when goods are in transit and then received.
What does best-in-class copywriting feel like?
Here’s an example of a product description. It typifies the brand essence, builds brand equity, and drives purchase intent.
“From us to you, with love. If you’re searching for the perfect box of chocolate to show a loved one how much you care, look no further than the With Love H-Box. The blushing pink tones of the gorgeous packaging are sure to impress – while the 14 delectable chocolates inside will delight their taste buds. Of course, you could always pick up a pack for yourself, too…”
“And for those who enjoy a little boozy kick, our Amaretto offering is just the ticket. Nutty, melt-in-the-mouth, and undeniably moreish, with a warming edge.”
Ecommerce-first – durable branded packaging for shipping
Multi-channel – printed magazines and direct mail for loyalty program members
Delivery options that give choices and premium pricing
Results
The winning formula accelerated organic growth in the UK, creating a springboard to enter markets as diverse as the USA and Japan. Co-founder and CEO Angus Thirlwell says the UK domestic market still has “huge potential” for further growth.
By 2022, in the USA, Hotel Chocolat was tracking its 128% year-on-year revenue growth to this ‘digital-led strategy’, with its active customer database growing by around 120%.
The Japan pattern was similar, with growth of around 130%, fuelled by its ‘VIP Me’ loyalty scheme that had grown to more than 100,000 within a year.
Thirwell is clear that digital has been critical in new customer acquisition, which brings people into a true multi-channel model that combines direct mail, in-store experiences, digital CRM, and content marketing.
By 2022, Hotel Chocolat had begun a strong push into subscription commerce with a kitchen gadget for making chocolate that is supported by monthly deliveries of ingredients for creating the perfect hot chocolate at home.
Why it matters
Seasonal product innovation gives people a reason to consider the brand, and the multi-channel model ensures it’s front of mind among the right segments of its target audience. Their excellence in ecommerce provides a gold standard comparison at every step from purchase consideration to post-purchase customer service.
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