In the year ending 2nd July, Hotel Chocolat saw an increase of 12% in year-on-year revenue growth. Meanwhile, its pre-tax profits doubled to £11.2m.
This is perhaps interesting in itself, but even more so considering rival Thorntons has reportedly seen pre-tax losses of more than £19m under new owners Ferrero.
So, why is Hotel Chocolat succeeding where Thorntons clearly isn’t? Here’s a few reasons why I think the chocolate brand is winning consumer favour.
Earlier this year, Hotel Chocolat launched a brand new website – redesigned to eradicate previous bugbears such as poor search, longwinded checkout, and awkward navigation.
The new site is certainly an improvement. Now, the header menu is much more streamlined, with categories more deeply nested. I particularly like how it points users to shop by interests such as ‘health enthusiast’ and ‘caramel lover’ – especially good considering most consumers turn to the retailer for gifting purposes.
The site’s focus on discovery also extends to the ‘Gift Creator’ – a feature that helps consumers build bespoke and personalised presents.
There are other good features too, such as the ability to check in-store stock, and handy information on ‘letterbox friendly’ items on product pages.
It’s far from perfect. There are still frustrating niggles, such as awkward and slow load times and a poor filter tool.
However, it offers a far better UX than before, with these new features perhaps contributing to more online purchases where consumers might have once abandoned their baskets or abandoned their search.
Shop and café format
Another factor that has contributed to increased consumer interest in Hotel Chocolat is its new café and shop format, with the retailer now rolling out 18 of these stores in locations across the UK.
While the retailer already has an affiliated restaurant in London (called Rabot 1745), it has been able to further capitalise on its well-known brand name and USP of a chocolate-themed café. Instead of just boxed confectionary, shop+café’s sell hot drinks and ‘eat-in’ food including porridge and brownies. This had led to a reported increase in footfall, with the retailer giving passers-by an extra reason to enter and linger.
Meanwhile, where Hotel Chocolat has been unable to introduce the full café format into certain locations, it has still added extras like its ‘Ice Cream of the Gods’ service where possible. Again, this is likely to have helped increase footfall and boost sales (particularly during hot weather spells).
Alongside adding a café element to its stores, Hotel Chocolat has entered into the world of events and experiences. It launched its ‘chocolate lock-ins’ series, offering shoppers the chance to attend tasting sessions in-stores after hours. Similarly, it now holds chocolate-making workshops for kids, as well as more in-depth ‘bean to bar’ learning workshops.
— Hotel Chocolat (@HotelChocolat) September 26, 2017
By creating memorable experiences, Hotel Chocolat is able to connect with consumers in a much more meaningful way. Instead of simply providing a product, it also enables the brand to give consumers something of real value, which in turn is likely to increase loyalty in the long-run.
While rival Thorntons has also experimented with events – last year teaming up with Bompass & Parr to create a ‘sensory pod’ in Westfield shopping centre – it hasn’t invested in any long-term endeavour.
Another area of expansion is Hotel Chocolat’s new subscription box service, which is set to launch next year after a successful test run. Called ‘Tasting Club’, it offers consumers the chance to receive a selection of curated chocolate in the post each month.
Hotel Chocolat is marketing it as something of an elite members’ club, building on the exclusive nature of tasting products before they’re sold in stores.
Naturally, the subscription model will also provide the brand with the opportunity to capture recurring sales, hooking consumers in to a rolling service each month. This kind of service also allows brand to develop a relationship with those who sign up – as well as the opportunity to deepen it further by surprising them with offers and innovative boxes.
Of course, it remains to be seen whether the model is a true success in the long-term. There is the danger that subscribers will soon lose interest or sign-up for a single box – especially if the retailer does not diversify its offering. However, with a successful trial period, it is certainly a sign that there is a demand for the brand’s product.
Expanding its core product
Finally, another reason Hotel Chocolat could be capturing consumers is the fact that it continues to experiment and diversify its product range.
Instead of just food, the retailer now sells its own coffee and alcoholic drinks including cocoa infused gin, vodka and beer – as well as traditional prosecco specifically chosen to accompany its chocolate. Meanwhile, it also sells popular Christmas and birthday hampers and even its own brand recipe book.
— Hotel Chocolat (@HotelChocolat) October 1, 2017
While this is bound to be a draw, it is also important to note how Hotel Chocolat’s brand ethos contributes to its overall appeal. With a dedication to sustainable and ethical cocoa farming, it has been able to build a reputation for high quality in every sense.
On the back of its recent profits, Hotel Chocolat has also invested in British manufacturing operations in order to ramp up production – a sure-fire sign that it’s enjoying the sweet taste of success.