Cookies and crackers, for years a mainstay near the center of the store, are moving on up -- to an earlier position in the shopping pattern.
That tactic, though still not widely used, is one of the most dramatic changes taking place as a result of category management efforts in this all-important category. Other modifications include a better mix of products and better-defined segments within the category, retailers told SN.
The category has been helped along the category management path, they said, because of its direct-store-delivery nature.
It's rare for category management to result in the movement of entire categories, especially one as large as cookies and crackers.
"We've had a few customers who have said, 'Hey, if I can't drive enough consumers to the aisle, another approach is to put the aisle in front of the consumer,' " said Glen Fleischer, senior director of customer strategy at Nabisco Biscuit Co., Parsippany, N.J. "So they've moved the cookie and cracker aisle so it's by their primary traffic aisle because it's going to drive more impulse purchases."
Fleischer said the shift was a realization on the part of grocers that all categories are not created equal. "They've come up with two very important delineations; one that I'll call planned purchase categories, and the other which would be impulse.
"When they start to think about store layout, they're saying, 'How do I optimize my store to take advantage of some of the categories that are expandable consumption, high-impulse, like cookies and crackers?' Since it's such a big one, and so profitable for them, they're recognizing the power of putting it earlier in the flow. "We've quantified with them that [putting it earlier in the flow] will drive significantly more category and total store sales. It's a big deal to do in terms of the resources required, but they're absolutely doing that." Others, he said, are testing or studying it.
"It's been a good move for us," said an executive at a chain that has made the shift. "We wanted to get this high-impulse category up front in the shopping trip because impulse purchases seem to decline as the shopping trip goes on." Cookie sales are up, said the executive, who would not be specific. "Let's just say we're pleased with the early results."
Nabisco's Fleischer predicts that others who try such a shift will also be happy.
"I think aisle location is a home run," he said. "You're looking at those kinds of things that can drive incremental and more profitable results." Those who have moved the aisle, he said, are happy because "they didn't have to promote to get that extra sale. They just had to think about making sure the product was in front of the consumer."
Another retailer who has begun to move his cookie and cracker aisles, who also wanted to remain anonymous, said the move has been beneficial.
"We haven't done it in all of our stores, though we hope to finish soon. It makes a lot of sense. People don't buy cookies and crackers because they need them. They buy them because they want them. They're not staple items. Because of that, you want to get them up front so people, men in particular, see them when they're still early on in their shopping trip. As they continue to shop, people seem to cut corners and become more interested in just getting out of the store."
While some retailers have physically moved the cookie and cracker aisle, most have made changes within the aisle. Part of that, Fleischer said, comes from a focus by grocers on understanding consumer segments.
"In cookies and crackers, there's a very mainstream-oriented consumer, there's a wellness-oriented consumer, there's a specialty-oriented consumer and there's a price-oriented consumer. There are different strategies and tactics to meet the needs of all of those consumers. So they're asking what the consumer segments are and developing plans to win against each one of those segments."
Category management, one of the retailers stated, has helped his chain "clean up" its cookie and cracker offerings.
"In terms of product selection, it seems things are more organized," he said. "We've got distinct segments. We always had those segments, but things were kind of all over the place. Through category management, we've weeded out some items. We seem to have a crisper section now; everything looks more manageable, and I think that helps keep shoppers from being intimidated."
Fleischer said there's a tremendous difference in category sales based on how the category is configured on the shelf. "The way to win is to do what we call in the cookie and cracker category, the 'unified by manufacturer approach.' While there are very clearly consumer segments, if you put each manufacturer's items together in a block, the consumer sees total franchise equity.
"We think the reason for that is that the dwell time in the aisle -- we've studied that by putting cameras in the aisle to study how people shop -- is greater in this set. We're talking about seconds or portions of minutes. But to the degree that the consumer is spending more time in front of a high-impulse-purchase, high-profit category, that's going to enable the retailer to drive more sales from that category."
Retailers interspersing private-label cookies with their branded counterparts may want to revise their strategy," Fleischer said.
"We tested that. We showed analytically that it's better to have it separate, because when you put it next to the branded, you're encouraging a trade-off. So you might drive store-brand sales, but at the expense of total category sales. You're trading off higher price and profit for lower absolute profit.
"That was pretty insightful because in the model three years ago, the view was private label vs. branded. I think the view today is, 'How do I leverage the sales of both to win against my target consumer and drive total category sales?' "
"We made the switch," said one of the retailers contacted by SN. "It seems that just as it helps give national brands some franchise equity, it helps the image of the store brand. Our private-label cookie sales are up."
Having cookies and crackers together, Nabisco's Fleischer added, also has proven beneficial. "We've shown that having them together in the same part of the store expands the mass and the appeal and the sales of the total category."
The same can't be said for salty snacks.
"With salty snacks, which would be a similar eating occasion as crackers, you're better off separating the two so you're not giving the consumer an either-or opportunity."
Effective category management of cookies should include a definition of the in-store bakery's role, according to Bob Blattberg, director of the Center for Retail Management at Northwestern University, Chicago.
"A big issue is going to be the bakery section vs. the packaged goods," he said. "If bakery becomes more important in the retailing environment, which it may because it's a fresh department, which a lot of retailers are focusing on, that's going to add some complexity because the category has to be managed in its entirety; the fresh with the packaged varieties."
"We really haven't worked that into the equation," said one of the retailers contacted by SN. "I know the best practice approach says to work in bakery -- and even dairy -- but I think it's more important to get the packaged area right first. Then you can see about the other areas."
That approach is fine, said Blattberg, encouraging grocers to focus on the bulk of any category. "Figure out what is 90% to 95% of the business and get focused on that. Spending all that time on the last 10% doesn't add up to much. I believe in getting it close and getting it done, rather than trying to figure out every nuance to it."
