By Maureen Licata - Western Grocer,January/February 2004
After combing the aisles and piling groceries into shopping carts, shoppers can relax as they wait in line at the checkout. But through they've ticked off all the items on their list; consumers are still ready to make additional purchases if the right item is clearly visible and close at hand.
The checkout is a haven for impulse sales and retailers who stock this valuable section of the store with enticing products will realize even greater profits.
We have plastic bins at the checkout counter and the items they hold generate $50,000 per year," says Dave Sikorski, manager of Harry's foods in Winnipeg. "The bins create a clean, uncluttered look and that's important for impulse buys. We sell sesame snaps, corn nuts, wine gums and other snacks as well as seasonal items, most with a 30 percent margin."
Consumers are just as likely to purchase items at the checkout that offer immediate gratification, like confectionary and jerky, as those geared to later use such as batteries and single use cameras. But their placement can be critical. Sometimes, manufacturers enlist the outside help to ensure optimum positioning. SPAR Canada, based in Toronto, executes programs for vendors in the retail environment, says President Jeff Deverett. "We place products strategically so that people will purchase impulsively. Every consumer will go through the checkout, so it's some of the most prime real estate in the store. It's a real power selling area. As long as they are not hard decisions for consumers to make, they will often make impulse purchases."
And kids can assist parents in their decision making, he says. "Pester power works well, particularly for pre-schoolers who are attracted to packaging."
But overly inflated prices can detail purchases, he stresses. "Low-priced, high -turn items are easy buys," he says. "Things like disposable cameras and batteries are purchases based more on need than, say, a candy bar, but they're still impulse purchases. For example, more batteries are sold at the checkout than elsewhere in the store."
Besides batteries to power the myriad devices that pervade modern life, consumers also appreciate the presence of single-use cameras and phone cards as they wait to have their purchases tallied up and bagged. "Phone cards are very popular and becoming more so," says Ross Gordon, President of retail Results Corporation of Edmonton. "Retailers in both urban and rural areas should stock a few different brands that include overseas calling cards." If they're not signed up for a package deal, cell phone users may opt for pre-paid cellular cards to facilitate their need to communicate. And these can even be sold electronically via a terminal operated by retail staff, thus eliminating inventory and shrink.
And while consumers seem wildly interested in digital cameras, the sale of single-use models is "not affected", says Gordon. "Even waterproof one-time use cameras are often reasonably priced."
Since they're also high theft items, he recommends selling batteries from a display rack equipped with a Lexan cover. "Retailers need a variety of items around tills," says Gordon. "People get bored while waiting. There's the potential to focus a consumer's attention for a long period of time."
According to Rob Sage, manager of the grocery store in Whistler, B.C., a range of products and "sure fire winners" has generated success at the front end. "We feature batteries and cameras along with small snack items that go well with other purchases shoppers are making. We have found that people respond."
Besides the inedible offerings, consumers respond well to snacks, both sweet and savory. Kraft Canada tempts shoppers with a range of tasty cookie and cracker options, including Oreo, Chips Ahoy!, Ritz Crackers and Crispers.
The increased pace of consumers' lifestyles as well as the need for convenience means that more people are looking for on-the-go snacks to fill in their eating occasions," says Allan Lindsay, category business director, biscuit, for the Toronto-based company. "This makes the checkout an important source for snacking needs and it has resulted in new packaging formats and sizes for added convenience."
While they stand in the line-up, consumers are most likely to reach for confections including gum, chocolate, mints and cough drops, according to Tim Boughtflower, in-store communications and team leader for Cadbury Adams of Toronto, manufacturers of Trident, Caramilk, Dentyne Ice, Halls and Mr. Big.
"Our research shows that 81% of households purchase confections from the front end. Fifty-nine percent of consumers purchase gum once or several times per week.
David Brough, business manager, space management for the company, suggests that retailers balance the offerings between innovation in categories and core strong performing skus. "Brands and categories need to stock products that consumers are coming to purchase. The correct assortment is important. It only takes a consumer seven to ten seconds to make a purchase decision within the categories of gum, chocolate and cough/throat drops."
Consumers make a primary decision when it comes to snacking, sweet or salty. And meat snacks are an emerging alternative within the salty snack segment, says David Pellettier, director of sales-non grocery for Con-Agra Foods of Toronto. Available in jerky and meat stick formats, Slim Jim brand targets healthy, nutrition conscious shoppers. "People following high protein diets are looking for this type of product," he says. "Snack foods are demonstrating dynamic growth across Canada and healthy portable snacks are driving the growth. Meat snacks are $44 million in grocery.
Clip strips help retailers to rotate products as well as allowing them to present an all-important clean and uncluttered appearance, he says. "They present a great vehicle to keep the front end current with the latest emerging trends."
Toronto-based Jack links of Canada makes its kippered beef steak and beef jerky products available in 18 count caddies, or they can be easily clip-stripped, says Andre Dittrich, national director sales and operations. "They're healthy snack alternatives," he says. "Though the predominant demographic for the product is males between 18 and 45, women and kids also enjoy them."
The top selling skus are original and teriyaki flavors and he recommends stocking those along with their shelf stable beef and cheese stick combos, to stimulate more impulse opportunities.
"The Atkins diet will be around for a while," says Dittrich. "These products are very impulse driven and should be stocked in sight lines."
Presenting the right mix of products is sometimes the domain of a dedicated checkout aisle manager, says Deverett. "The products, including promotional items, are rotated all the time. "It's a real science, capturing all the incremental sales."
Though not considered or planned, impulse purchases generally characterize most trips to the grocery store. Retailers can engender interest in the well-chosen and compelling by heading consumer preferences. And the extra jingle of the cash register can make both retailer and shopper very happy.