While this story from Canadian Grocer is focused on grocery stores (obviously), there are strong takeaways for any retailer looking to make better use of the last few steps of the shopper journey. In short: data in key, and never underestimate the power of the impulse buy.
At the end of every shopping trip, customers are preoccupied by their mobile phones, restless kids or getting their debit cards ready (sometimes all of the above). But for once in your store, they are also standing still… waiting… waiting.
Think of it as a chance to grab their attention and make one final sale.
As the study “Optimizing Checkstand Merchandising: Maximizing Shopper Interaction in a New Era of Technology” says, to boost sales, grocers should focus on the “power categories” of beverages, magazines and confectionery, and use data to find the right product mix.
Focus on categories that have high household penetration, high purchase frequency and provide higher impulse sales.
“Having products that are relevant will keep the shopper in shopping mode versus switching into transaction mode,” says William Romollino, VP of shopper insights at Time Warner Retail Sales & Marketing, in Parsippany, N.J. The firm conducted the study, along with the Kelly School of Business at Indiana University and VideoMining, with additional analysis done by Chicago-based Dechert-Hampe Consulting. “Ultimately, retailers want to keep customers engaged as long as possible to raise basket size.”
While the checkout lanes might be an afterthought to customers, they shouldn’t be for grocers: the category represents 1% of total supermarket sales, which is the same as the general merchandise department (1%) and bigger than the pet-food category (0.8%). The study determined only 10% of shoppers buy an item at checkout, but if that were increased just one percentage point, grocers would generate an additional US$15,000 per year, per store.
Retailers looking for a sales lift at the front end should lose the batteries and stock up on beverages.
The study found beverages are the top sellers at checkout, with 43% dollar share of frontend sales, followed by confectionery (32%) and magazines (17%). Items seemingly collecting dust are salty snacks (3%), batteries (1.6%), snack and energy bars (1.4%) and razors and blades (1.3%).
Romollino says a common mistake is to put products at the checkout that are not impulse buys and that can be bought elsewhere in the store.
“A lot of retailers put up end caps devoted to general merchandise sale items,” he says. “Because the check- out is so impulse-oriented, I don’t think it’s smart to send pricing messaging.”
Another merchandising mistake is blocking end caps with secondary display merchandising, such as flower bouquets.
“Those primary checkout displays are virtually unshopped when they’re blocked,” says Romollino. An eye-tracking portion of the study found shoppers spend time looking at all areas of a checkout’s end cap, but the most time is spent viewing items before the conveyor belt, on the customer’s left. “Retailers need to understand where these hotspots are and make sure that top-selling products are in these spots,” says Bill Dusek, managing director at Dechert-Hampe.
The study also found that some categories may deserve more space. For instance, beverages take up just 10% of the linear space at check- outs despite contributing 43% of sales. Candy has 30% of space but does just 18% sales. One conclusion: the front end should be managed as its own department with its own category manager.
Of course, the right product mix should take into account a retailer’s customer base. Toronto-based Longo’s, which caters to a high-end crowd, moved away from strictly sweet treats to include better-for-you options such as protein bars and on-the- go nuts and seeds.
“We carry a mix of premium chocolate and some indulgent treats, but with the trend to health and wellness, we wanted to offer a healthy alternative to the traditional offerings,” says Mary-Ellen Schick, category manager at Longo’s.
Gum and food-focused magazines remain mainstays at Longo’s, and instead of batteries–which Longo’s stopped selling at the check- out about two years ago–the retailer now incorporates gift cards.
“In our quick-based, online world, it offers our customers a solution to a need,” says Schick.
Dennis Carveth, director of category development at Mars Canada, notes that by the end of their shopping trip, consumers have been inundated with messages, so a clean, well-organized front end is important.
“As the only area of the store that 100% of shoppers visit and the last area they experience, ensuring front ends are well managed is a key success factor for not only sales, but for creating a strong impression of how consumers perceive your banner.”
Illustration: Daniel Downey
This story originally appeared in Canadian Grocer
