Bridging The Last Mile Of Customer Experience In Chocolate Industry

5 mins

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Pallavi Pavithran

May 20, 2022

“Chemically speaking, chocolate is really the world’s perfect food” - Michael Levine

Who's going to argue with science? Not me!

We all love chocolate. It is our guilty pleasure treat when we need that little something to tide over until dinner…. A small handful of chocolate chips does the trick as does a small piece of good dark chocolate.

Satisfying one’s cravings and palates is a pretty straightforward way of offering a delightful experience. The chocolate industry has witnessed many new trends in customer experience and fluctuations in customer expectations. The world’s shopping habits have shifted from stereotypical in-store shopping to multi-channel online shopping.

And brands that are on top of these changing habits, emerge as winners!

The third episode of CX See Why Show revolves around these transformational changes and the end-to-end customer experience aspects in the chocolate industry.

Our host Dan Gingiss had a deep discussion with two seasoned professionals in the industry - Sarah Tomasaitis, Global Portfolio Insights - Gum and Mints at Mars, and John Kapos, CEO of Perfection Chocolates.

Dan Gingiss: We're going to talk about chocolate today. Is there a better topic? I think no!

I am so excited to bring a couple of friends to the show who are the real experts in the chocolate space. We have John Kapos, also known as Chocolate Johnny, everywhere on social media. He is the owner of Perfection Chocolates in Sydney, Australia.

John Kapos: Thanks for having me here, buddy.

Dan Gingiss: Also, we have Sarah Tomasaitis here with us. She is the global insights lead for gum and mints at Mars.

Sarah Tomasaitis: Thanks, happy to be here.

Dan Gingiss: Well, great to have both of you here. We will lean on you for some expertise in the field of chocolate. We are going to base our discussion on some research done by Clootrack. They can look at thousands of online customer reviews and dig deep to find the things that companies have to know.

What are the Top Drivers of Customer Experience in the Chocolate Category?

Dan Gingiss: We looked at almost 13000 online reviews. Here, Johnny and Sarah, I didn't put five elements of customer experience in any order other than alphabetical.

My question to you is, what do customers want from chocolate products? What do you think about all of these five things? Which one do you think is the top factor customers care about?

John Kapos: I would say Taste. Because, when I make a new product, and they try it, if the first thing is ‘Wah, my god, that is so good!’, they would buy that. If they got a ‘yuck it's not that good’, they wouldn't buy.

Sarah Tomasaitis: I have to go with Taste, too, because people are going into this category because they just want something great to eat and something great to snack on.

Dan Gingiss: Well, we brought the experts here today because they know what they are talking about. The Taste and Flavor is absolutely the top category driver that leads to a positive experience of happiness among customers buying chocolates.

Interestingly, Utility came in second.

Utility is the ability to package and the giftability of products—then Price, which I think is always interesting when prices are not first.

Interestingly, these top drivers did not change across the different types of chocolates, such as white chocolate, dark chocolate, or milk chocolate.

Sarah Tomasaitis: When people purchase chocolate online, they are very mission-driven. If you are in a store, you might say ‘what I want,’ but when you're buying online, you might be purchasing for gifting, the birthday coming up, or holiday, etc. So Utility factor is probably a lot bigger in the online space than what you see in the store.

Dan Gingiss: Very interesting. John, you see the same thing when people come in to buy?

John Kapos: I would say it is fifty-fifty. Most people come to buy for themselves and then we have the other half who want to buy gifts.

What are the Top 3 Positive Factors of Customer Experience in the Chocolate Industry?

Dan Gingiss: Look at the three aspects that customers are most happy about with chocolates. We looked into the positivity in customer reviews and what we see is that Texture & Consistency is the main factor. Utility and the Taste & Flavor are still there.

Around the Texture & Consistency, the words we can see from the ratings and reviews are crunchy, creamy, and smooth.

When we talk about Utility, ‘a great snack’ or ‘a great gift’ are the words that customers frequently use in their reviews.

Indeed, around Taste & Flavor, when they say delicious and amazing, the positivity around there will certainly be high.

Either one of you got surprised with these words showing up, or you didn’t expect these words?

Sarah Tomasaitis: These look right, and I guess from my experience in purchasing chocolate online, there is a concern like if the products are going to come intact, melted, or damaged. Like that, consumers are often a bit worried about this. When they receive the chocolate, and it meets their expectations, they say, ‘it’s amazing.’ It will scrutinize a lot of factors, especially when they're purchasing online.

Fluctuating Customer Experience: What Do You Think Is Happening Here?

Dan Gingiss: Clootrack also looked at whether happiness around chocolate differs over a period of time.

Note: The values are the difference in the positivity in the reviews around main themes from the first half of 2021 (H1) to the second half of 2021 (H2).

And what was particularly interesting is, when we check all 3 of these charts of Texture & Consistency, Utility, and Taste & Flavor, something is going on during the holiday season in December. The positivity is going way down.

Is this because a supply chain issue is going on, or it’s just a high demand for gifts during the holidays? What do you think is happening here?

John Kapos: I feel this chart is wrong as Utility is down in December. That's Christmas time. And in August and September, it’s high! I don't understand why it's like that. I thought it would be the other way, but you got me stumped on that one. Also, I don’t understand why Texture & Consistency is also low at Christmas.

Dan Gingiss: I should say, just to be fair to talk with John here, these numbers are from the US customers, so maybe we do things differently in the US than in Australia, and that's why it's becoming a bit strange.

But the only thing I can guess is that the demand is high in the wintertime and Christmas season. And, there are more people ordering chocolates. So there is more chance for things to go wrong, which just brings these numbers.

John Kapos: We Australians are the largest consumers of Easter eggs. I think our numbers in Australia would be much higher on Christmas as well. Every chocolate brand will be waiting for Christmas because there are a lot of sales of Christmas gifts.

Sarah Tomasaitis: I do have a hypothesis. Like what you're saying, Johnny, people are generally very positive in December. So things always hike. We have to be careful researching since there are a lot of first-time buyers of this category, and they're not sure what they are ordering.

For example, when I first bought a dish detergent, I wasn't sure what size it would be. I was disappointed. I can imagine ordering chocolate in the wrong size as they might be confused. So it could be that many first-time buyers are coming in during these seasons, and they can be disappointed if they're purchasing the wrong thing by accident.

Dan Gingiss: I think you're right. What is happening is that the business of the season might go high. But there is some negativity because there are some problems, which brings everything else down. It is a good insight.

Happy Emotions: Verbatims From Chocolate Customers

“these are delicious, fresh and very giftable, as they are beautifully and individually wrapped! I highly recommend without hesitation!”

“this milk chocolate was so smooth and creamy, this is like royalty of milk chocolate lol.”

“This is one of my favorite treats I like to get around the holidays. Anything in this brand is amazing, but the peppermint bark is hands down my favorite”

What is the Last-Mile Problem in Customer Experience?

Dan Gingiss: So now we're going to look at some aspects that customers might be unhappy about, and we took them in terms of where the negativity rating is above 25%.

We dig deeper into each of these aspects and look at the reviews categorized this way. On the Delivery & Shipping, we see exactly what you said, Sarah, like the ‘melted chocolates’ and ‘broken chocolates’ will ruin anybody's day.

We are going to have negative reviews for Packaging & Wrapping. We get complaints about boxes arriving open or inadequate packaging generally. When Price is a negative factor, the complaints about that would be it's too high as nobody's ever going to say it's too low.

When it comes to the Size & Quantity, as Sarah said, it was usually smaller than they expected, and maybe they're expecting something in full size.

Sarah Tomasaitis: Yeah, we are working in such a category that people love and have high expectations. So, if we don't meet their expectations, they're pretty bummed.

Dan Gingiss: Johnny, I noticed that there is not a lot of negativity about Taste or Flavor. More negativities are around the Packaging, Shipping, etc. How do you deal with that, especially during busy times?

John Kapos: I often received complaints like the packaging was broken, or the chocolate was broken even if we packed it tightly and correctly. Then, to prevent stuff like that, we now photograph everything before delivering it. We show the people how we are packing it perfectly in the iceboxes. Then, if it's broken or damaged, it's always in the hands of the delivery person.

How do Mass-Marketed Chocolates Differ from Hand Crafted Chocolates?

Dan Gingiss: Mars has a lot of products, but a lot of them are mass-marketed products. So nobody is expecting them to be the finest Swiss chocolate in the world from Mars. But when it comes to Johnny, you focus a lot more on the smaller scale and handcrafted chocolates. How do we account for both of these affecting customer expectations?

John Kapos: Well, I love Mars and all other manufacturers because that gives me plenty of space to up my game to give people a product that they cannot make, as well as they don't want to make.

I see that they're doing well because they are more prominent companies and advanced. So I can see what they're doing. They are trending with different spices with different products, adding various inclusions.

Dan Gingiss: Sarah, when you buy in a mass manufacturing chocolate bar, you have a different expectation than when you walk into a chocolate shop where everything is handmade. Do you see anything in your research about how people in their own heads maybe compare products?

Sarah Tomasaitis: I feel like there is a moment for everything. Like M&M and Snickers, most people have tried these products, in addition to buying their favorite chocolates online.

There is a time and place for everything, no matter what chocolate consumers love. They may try snickers or M&M. I'm sure they will also try Johnny's chocolate. They choose various chocolates for different moments and occasions, and it's the right choice for that moment. When you ask people how satisfied you are with premium chocolate, they will say they're super happy because that's what they chose for that moment.

John Kapos: Sarah, I'm so glad you said that. Because I love my products, but when we go to the movies, my wife and I will get a big popcorn box, and I'm not bringing up my Perfection Chocolate bar. I'm buying a bag of M&M!

What are the top Customer Complaints About Chocolate?

Dan Gingiss: We also looked at ‘unhappiness’ over time and the difference between the first and second half of 2021. There was a reasonable difference in terms of Size & Quantity, Packaging & Wrapping, and Price.

This chart shows the trend of ‘unhappiness’ in customer reviews. This is starting to show us why we were seeing some of the negativity in December, the gifting season. But, it seems that in the United States, we have a little bit of an issue around Packaging and Shipping.

We call it the last mile in retail; that's the part where you can't control your products because some other company will be doing the delivery.

I wrote a blog about this recently. I captured the delivery person following a package on my front step; he was only two steps away. He just needed to take one more step. Instead, I got a great snapshot of my package in the air. He didn't know what was in that package, whether fragile or chocolate.

Retailers really don't have anything to do with that experience yet. I imagine that must be incredibly frustrating, and you alluded to it, Johnny, by taking pictures and trying to show people ahead of time.

But the main issue is that the shipping fees seem to be rising to the top, and yet it's a piece that's out of our control.

John Kapos: Well, so what we've done now is, we started using Uber, they know that it's a box of chocolates or it's fragile. There is another company called Zoom, which explicitly delivers cakes and food products. So when they pack everything in the truck, it's always packed nicely. It's a little bit more expensive, but they always do it correctly.

And another thing is, my two sons did a lot of the deliveries when they were studying. They knock on the door, and we just literally hand it out, and every time we get a compliment saying ‘well, we just love that hands-on service’.

Dan Gingiss: It's an amazing customer experience, and then if something goes wrong, you know exactly who to blame.

Sarah, is there anything you see in your research and insights around Packaging or Shipping that comes up broadly? Is there something that causes you to rethink how we package a specific item?

Sarah Tomasaitis: Mars has been investigating this. But one of the things that we found a silver lining to the pandemic was that more consumers in the US have been used to shopping other than on Amazon. Mostly from grocery stores.

In the end, when you're buying through a grocery store, there are a lot more precautions and safety measures to make sure that the product arrives more intact.

It's also a lot more complicated when a consumer purchases a small Snickers bar that looks like a 10-pound bag online. So, on that side, we see a little bit more satisfaction for consumers because they know what they're getting.

Does The Chocolate Experience Differ in Different Seasons?

Dan Gingiss: What do you do in the summertime, when you know that your product is shipping out and melting? Do you work with distributors or grocery stores? How do you make sure that the product maintains its integrity?

John Kapos: That is a good question, Dan. We are trying to work with them here in Australia and the US. Amazon will not work with chocolates during the summer months. So I'm pretty lucky the winter months are your summer (In the US). We will work through the winter here, and then as you guys get into winter over there, I will hopefully have a full year of supplying Amazon in Australia and then in the US. That is how we deal with chocolate and anything perishable due to the heat.

Dan Gingiss: All right. I want to share with you some verbatims that show what the areas of improvement are.

What Chocolate Customers Say About the Negative Experience

“obviously, i wouldn’t order this in the summer or anything like that because they will melt and you’ll have wasted your money.”

“candy bar box arrived with smashed corners and looked like it had been thrown around the warehouse a few times.”

“unfortunately item was received broken in pieces due to soft mailer bag and item expired the day i received it.”

So this is what we see when customers complain online, and I always find it so powerful to read things and customers' own words. We have intentionally written those reviews exactly as the customers have written. There are spelling errors and grammatical errors, etc., because it's how you want to get the most authentic feedback. I think it's so important in our industry to hear the literal voice of the customer.

What Are The Key Takeaways From This Chocolate Episode?

Dan Gingiss: Let’s check the key takeaways from the show. We can also extend this out to other industries other than chocolates.

First takeaway

So we saw that Delivery and Packaging were vital issues. The melting and breaking of chocolate caused a lot of negativity. As I mentioned before, the problem here is the last mile in retail and how critical it is, even though retailers often can't control it.

I liked that Johnny is trying to control it by having his own employees in this case. But other retailers have to pay attention to this last mile, improve relationships with the shipping company, work on better packaging, etc.

Second takeaway

Price is something that every industry grapples with. But I think the main issue here in this industry, which applies to others, is that people just want value. So look at different pricing bands of chocolate. People didn't talk about price in the lower bands, and it’s not surprising. And then, as it started to get expensive, there was this question of price.

Sometimes it's worth it; sometimes it's not. But people definitely started making that value comparison. And finally, with Size and Quantity, many of the issues that came up were smaller than expected, or manufacturers are intentionally making the size smaller or look bigger in the advertisements.

Third takeaway

The takeaway here is we just have to be honest and upfront with our marketing. Show products the way that they are. Not over promise and under deliver. But do the opposite, under promise and overdeliver at least.

It’s a Sweet Wrap!

Sarah, What do you think about these takeaways, and how do they resonate with you?

Sarah Tomasaitis: Yeah, I think this makes sense. People love chocolate, so if the item doesn't arrive the way they expected in terms of Size and Quantity, they get disappointed.

It's just hard to buy online unless you're familiar with what you're buying. For example, they show the product in somebody's hand on Amazon. You may think how big it is when you see it in a person’s hand.

We do our best to make sure that we are communicating how great the product is and make sure that consumers are not surprised with the item they get.

Dan Gingiss: Johnny, what do you think about this? Do these three takeaways resonate?

John Kapos: Yes, everything that they said in that survey resonates with us as well.

Dan Gingiss: I think it comes down to when we talk about Price. I can use a different industry, for example. Look at the premium spirits industry. Is $100 Bourbon 4 times as good as a $25 Bourbon? Probably not! It's something you're paying up for prestige or a brand's name.

In certain urban worlds, a lot of people value that. So they pay. They are like exceedingly high prices for the same type of liquid in the same model. I wonder whether that is true with chocolate as well.

In some ways, you pay up because you know it's a premium. Can I ask that same question, Johnny?

Is a $13 bar of chocolate 13 times better than a $1 bar of chocolate? Or is it maybe 4 or 5 times better? I'm not sure there is an answer.

John Kapos: You're right; there is no answer. Every individual has a different taste. We just want to ensure we get the majority of them coming into our store.

Dan, the world has opened up pre-covid ways. They are traveling now. Americans are coming to Australia, Australians are going to Europe, etc. We are trying different flavors and different types of chocolates. We prepared to spend a little bit more money on a better product.

You go to Europe and eat that chocolate from Belgium, Switzerland, France, and Greece, and you are like, ‘wow, that chocolate was phenomenal’. When you go back home from the US or Australia, you want that quality of chocolate. They will be looking for it every day just to enjoy that moment with that bar of quality chocolate.

Dan Gingiss: Sarah, any final thoughts on this wide range of available products in this industry?

Sarah Tomasaitis: There's a wide range of products because there is a wide range of people. There's a demand on all sides. I agree.

Dan Gingiss: Guys, I want to thank you so much. This has been a ‘sweet’ conversation about chocolate. And it's just great no matter what the industry is, it's always good to talk to people who live in and read it every day.

Johnny and Sarah, thank you so much for sharing your knowledge with us. We really appreciate it.

Watch the show here - CX See Why – Understand the “Why” of Customer Experience with Dan Gingiss