Brand Development Marketing Marketing Audits Partnership Marketing & Commercial Retail

Consumer demand for Thorntons not so sweet

What can Thorntons do to improve their business?

Thorntons is a tale of woe today.  They’ve just announced an 8.5% drop in half-yearly profits, where they blame the bad weather, discounting as a result of weak consumer confidence and problems with their supply chain. They talk of closing more stores and, at best, suggesting flat (i.e. no) year-on-year growth.

I’ve been having a think about the Thorntons business and wondering if this is the whole story. I can’t help but think that they have lost their way somewhere. It now looks like a bit of an oddity on the UK high street and in the wake of some very cool competition, probably has some catching up to do.

I would suggest they probably have five places to start looking for the answer.

1. Brand refresh
It’s difficult to write anything about chocolate without mentioning Hotel Chocolat. The average UK chocolate lover has become more educated and discerning in their chocolate tastes and now understands the benefits of a high cocoa content. Hotel Chocolat appeals directly to this new discerning breed of customer and helps them further their knowledge and experience new flavours. What does it say about someone’s tastes (or indeed, their opinion of you) when they present you with a box of Thornton’s chocolates?

2. Reviewing the customer profile
I suggest that in 2011, gifting represents an ever-decreasing percentage of high street spend. Businesses like Krispy Kreme cater better for the emerging class of ‘office hero’ who will collect a box of something special at lunch to share with his work colleagues. There are new classes of consumer who could be worth catering for. Talking to customers would help Thorntons better understand what their expectations are from a chocolate retailer in 2011.

3. Rollout the big picture
For many retailers, much effort is put into brand development, which is then shared within the HQ, perhaps rolled out into the stores in the form of revised point of sale collateral and merchandising changes. Besides the few posters they receive, shop staff and franchisees remain unaware of this repositioning. I believe Thorntons could benefit from communicating all their brand values through the staff in every store. Why do they work at Thorntons? Why buy from Thorntons? What’s the benefit of Fairtrade?  What do they recommend?  Good customer service, as every retailer knows, can lead to referrals and repeat business, but without the selling tools, it’s difficult to put on a good show.

4. Opportunities from CRM
If I was in a Thorntons store, I’d be more than happy to leave my email address for the chance to enter a prize draw for a luxury box of chocolates. Offer me a truffle on the spot and I’d happily trade it for my address, phone number and the answer to questions about my buying habits.
If I haven’t been into a Thorntons store for three months, a £5 voucher would probably tempt me back, and I know I’d probably spend double that.
If I’ve ever bought corporate gifts from Thorntons in the past, isn’t it time I did so again?
Do I know any ‘look-alikes’? These are people, like me, who might spend over £100 pa on chocolate. What would a store be prepared to give up for people like these?
Our experience with similar retailers tells me that there is somewhere between 6% and 8% of additional revenue to be generated from carefully considered CRM activities alone.

5. Learn from the new kids on the block
It’s incredible how quickly new retailers can spring up in this sector and quickly establish market share. I’m thinking of businesses like Artisan du Chocolat, Chocolate and Love and Willie’s Cacao. What is it that they’ve got right? Whilst this niche positioning may not be right for every Thornton’s customer, there are lessons to be learned and adapting these lessons for a mass market could lead to new product lines. A partnership with some of these unique retailers might tempt Thorntons customers to dig deeper and spend a little bit more.

6. Test the water
We’ve been talking here about some changes that could be fairly bold to deliver in such an established business, so I’d kick off with a pop-up or concept store and carefully measure the impact of each change. I remember Peter Mark, the successful hair salon chain in Ireland doing this a few years ago. They knew there was a younger audience out there who hadn’t experienced their brand before, but wanted to offer something that was right for them without cutting off their loyal customer base. Peter Mark launched the Style Club, a new wave of salons, which started off in Dublin. I remember being shown round by the Marketing Director and thinking what a departure it was from their traditional identity and applauding them for experimenting outside their comfort zone.

It would be nice to see the UK’s last independent, publicly-listed chocolate maker come good in its centenary year.  It will take courage and imagination from new CEO Jonathan Hart.  Thorntons sales may have dropped, but there are places other than discounting to look at for growth. Or just blame the weather.

(Featured Photo by NordWood Themes on Unsplash)

8 comments

  1. I suspect the 7th point could be to examine the impact of putting their brand into supermarkets. Why go into a Thornton’s shop when the same product can be bought – usually cheaper – in Tesco.

    This may be watering down the perceived value of the highstreet stores too: The mass production demonstrated by supermarket distribution undermines the impression of craftsmanship that a deli counter of unwrapped single chocolates aims to create in-store.

    Perhaps what they need is a luxury brand for the stores and a diffusion brand for the supermarkets.

    1. Their supermarket sales (included in commercial sales) were £45m for the half year to 8th Jan 2011. These were up 30.6% on last year and represent roughly 34% of total sales. If you take these figures out and just look at their own stores, the picture is even clearer; retail sales have declined for the period vs last year by 6%.

  2. Adrian you beat me to it on the supermarket issue though interesting to read the stats about their sales in the supermarkets.

    As a tiny thought, and being a very occasional choco-muncher, I’d say personally I wouldnt buy Thorntons at all… bland, mass produced milk chocolate isnt my thing at all… strange I wrote that too as I am very aware they do make white and dark chocolate products but for me, just looking in the window is a sea of mass production so I’d stay clear. May be they test the customers for the same reaction or are they after the low end market anyway in which case they totally hit the spot, just not me.

    What I was aiming to write about is I think Thorntons is typical of the change that is happening on the high street in general. The bigger players are all over the high street, in every town, making it dull and no longer offering the UK high street shopper any reason to go shopping and visit an alternative town to their home town. The reasons; the big players got bigger and the supermarkets fill all the gaps on all the mainstream consumer requirements. Good on them I say as cant help to admire the Tescos of the world as a business.

    Then look at what has happened with the power and total trust placed online which saps the gap on the high street for gifts and so many other items of demand… why would I walk the high street in search of a gift when they naturally have such limited choice (compared to the web) and I can buy it from my armchair on my phone (dont even need to walk to my PC or use it at work). “Chocolate” must be one of the main gifts up there with Flowers, but search for Chocolate on google and how do you start among 30.2m results.

    BUT there is light I believe for the high street and this is where speciality unique and lovely shops, boutiqy (spell check on blogs needed) in nature, a pleasure to walk into, homely, friendly staff that smile and say hello and I want to talk to (let me know where these people are please)…. and this will become the new power of the high street…. to think there is now a generation of people that would see no reason to visit another town to see what shops they have as “all towns are the same” they think… but it is changing again…. and the web is to blame hoorah !

    Why ? Supermarket and the big high street players fill the mass FMCG and broader daily needs, the web fills the convenience needs and most products, but the high street again could become the place to go for something unique, a pleasurable day out, a coffee and lunch… even Mary Portas bless her is showing us how it is done… even transofrming bakers into something you’d travel for (could choco shops be the same and make on the premises with every shop being different), and it wont be the same in the next town as any baker watching her programme should take heed and be creative.

    Gosh verbals at my finger tips… anyway Johnny, you got my brain coming out of my fingers again and ‘all because’ perhaps, there could be a place for Thorntons…. but I dont think they stand a chance in the long run as they are not small unique and high street specialists, though they might if they are lucky be able to feed the monster supermarkets if they only make their products look better and appeal to a bigger audience.

    PS I love Apricot Parfait chocs, and they do make them at Thorntons !

    PPS A Thorntons ad appeared number 2 out of 30.2m results which would be costing them over £1-£2 per click in such a massively competitive marketpalce with a CPA in the region I estimate of over £3.

    PPPS … only joking, no more. Johnny stop laughing at how I can write so much.

  3. I’ve been mulling over this morning & came back to comment and Michael’s beaten me to it!

    It would be interesting to know what brand perception is amongst the target market, as as perhaps none of us are. I had a quick look through some consumer forums & it appears the supermarket is more Tesco & Morrisons than Waitrose and there is a fair amount of discounting. However, the comments say ‘posh chocs’ etc.

    Seems it is literally the same product (perhaps different product ranges but really how much effort do consumers make to distinguish between product ranges) sold in Tesco for less money. And Clubcard points too.

    This does seem part of a wider shift from the golden age of the high street. Body Shop gift baskets anyone?!

  4. I’ve just passed a Leonidas store with a shelf full of chocolate boxes covered in discount stickers. These were the style of stickers that belong in a discount hardware store.
    I’m not sure that a sale sticker gives the right message. To me, it says “I’m near my sell-by date” or “I’m from a discontinued line”. I wonder if they actually have a positive impact on sales at all?

  5. I’m currently an Assistant Manager in a Thorntons coffee shop and I am doing a business management degree, I just stumbled accross this blog as part of my research for one of my modules and it’s really great reading all these different comments, backs up so much of what I’m concluding, Thanks!

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