I Love You: Supply Chain Personalization For Valentine’s Day 2019

Richard Howells

I was surprised recently to learn about the closing of the iconic candy manufacturer, New England Confectionery Co – otherwise known as Necco. Necco is the company that makes Sweethearts – the Valentine’s Day candy with messages like “Be Mine” and “I Love You” printed on top.

Say it isn’t so! It’s hard to imagine a Valentine’s Day without my Sweethearts within arm’s reach. But times are changing. While the traditional standbys – candy and flowers – will continue to dominate the business associated with the holiday, more and more companies are trying to get in on the game with nontraditional offerings.

Growing market diversity

Clearly, the array of romance-themed products is growing. How about heart-shaped cheese – or even heart-shaped cheese ravioli? After all, what says I love you more than a piece of cheese?

But nontraditional offerings – as in non-heart-shaped products – are on the rise, too. Business Insider suggests paying to have your sweetheart’s apartment cleaned (where do I sign up?) – or maybe picking up an upscale blender. Nothing says “I love you” like a smoothie from a smoothie! And as the National Retail Federation (NRF) observes, 24% of consumers plan to give “gifts of experience” – such as tickets to concerts and sporting events.

What’s more, these gifts are extending beyond our sweethearts. The NRF says that $991 million will be spent on children’s classmates/teachers, $751 million on pets, and $650 million on co-workers (is it good that pets beat out co-workers?).

The business opportunities for Valentine’s Day, in other words, are significant. As the NRF reports, “U.S. consumers are expected to spend an average $143.56 on Valentine’s Day, as 55% of the population celebrates this year, an increase from last year’s $136.57.” This works out to overall spending of $19.6 billion.

The question is, how do you capitalize on it?

A customer-centric love story requires visibility, planning, and responsiveness

Whatever you’re selling, the first order of business is to estimate demand. But if you’re first to the market with heart-shaped cheese, you’ll have no historical data from previous years to ground your forecast. You can use third-party data and other techniques – but in the end, you’re new to the market. To some extent, this means you may be diving in based on gut feel.

This reality makes responsiveness more important than ever – and responsiveness starts with real-time visibility. Let’s say you settle on a regional strategy where 65% of your product goes to distribution centers in the Northeast and 35% goes to the Southeast. Ideally, you’ll want to monitor actual sales with real-time point-of-sale data. If you see an uptick in one area over the other, you’ll want the supply chain responsiveness to quickly replan your product distribution strategy and maximize sales.

Sentiment analysis is important, too. Let’s say Kim Kardashian suddenly tweets out how much she loves your upscale blender. Or maybe Wallace and Gromit give your heart-shaped cheese some props on Twitter at a country music festival in Georgia. Hopefully, you have the social media sentiment analysis to identify the trend (people retweeting about your product) and the real-time analytics to understand what it means (more sales in the South). You’ll also need responsive logistics processes to move products to where they’re selling the most.

Make it personal this Valentine’s Day

At the same time, keep in mind the growing demand for personalized products – which can change your supply chain strategy dramatically. Depending on your approach, you will have to plan for where the personalization happens.

If the product is entirely personalized – like, say, a tailored suit – then the personalization happens at the point of manufacturing. But for most Valentine’s Day products – like, say, chocolates with personalized messages on them – you can do the personalization closer to the end consumer.

Let’s run with the chocolate example. Increasingly, customers are attracted by the option to print personalized messages on the chocolate box. The chocolate manufacturer could approach the personalization in at least one of two ways. First, they could mass-produce boxes with common enough messages that appear personalized. I’m thinking something like: “Richard, I Love You.” (Just an example. No pressure to send me one!) This works, of course, because you can likely estimate how many Richards (and other names) are out there – and then plan accordingly.

But why not just set aside boxes with empty message spaces, and then use specialized printers to add truly personalized messages on-demand? To optimize logistics, it would probably make the most sense to locate such capabilities at distribution centers rather than at manufacturing facilities. Whenever a request for a personalized product comes through, you can route the job to the location closest to the customer – because all these printers are networked. Then, you send out the finished product by FedEx, UPS, or another logistics partner for at-home delivery.

Sweethearts never die

Let me just wrap up with the news that NECCO, apparently, is being bought by another company – which plans to relaunch Sweethearts next year. Sweethearts never die. Happy Valentine’s Day to All. I’ll be expecting a slew of personalized chocolates with messages singing my praises.

Follow me on Twitter @howellsrichard

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About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.