CHICAGO -- Floor-ready displays, aisle displays and front-aisle merchandising are strategies that can be used to increase seasonal candy sales, according to roundtable participants at the All Candy Expo industry trade show held here last month.
The topic of seasonal merchandising was addressed by representatives from Kmart, BJ's Wholesale Club, Schnuck Markets and Information Resources Inc.
Kmart is using floor-ready manufacturer displays to drive seasonal sales, explained Pete Briley, assistant category manager of seasonal candy and gift food sets at the Troy, Mich.-based discounter.
But to be successful, the displays must be user-friendly.
"Display modules with multiple flavors must have all the flavors positioned so that the shoppers in your store can select the one they want hassle free," Briley said. "If they cannot see a flavor they like, or if it is hard to get at, they probably won't buy it, and the store ends up with a lost sale."
Briley said manufacturers need to design displays that are easy for store clerks to place on the sales floor with minimal set-up, and retailers need to pay attention to quantity issues.
"Be careful not to ship in too much of a product because it leads to forced sell-throughs and excessive markdowns. If possible, have your display module built to meet your store's specs," Briley said.
Many smaller and weaker stores do not generate the volume necessary to drive a large display. Therefore, the displays should be shipped only to medium- and high-volume stores.
"But don't understock your medium- and high-volume stores. Sometimes these stores can use more than one module," Briley went on to say.
BJ's Wholesale Club is building its seasonal candy sales with huge main-aisle displays for Christmas, Easter, spring/summer and Halloween items, according to Jack Bielat, buyer/merchandiser for the Natick, Mass.-based retailer.
Christmas is by far the biggest seasonal candy selling season at BJ's because the company sells a variety of traditional items, like candy canes, along with imported boxed chocolates from manufacturers like Lindt, Bacci and Perugina, and liquor-filled chocolates, where allowed by law.
"It is our highest gross-margin season of the year, because many of these items are imported and are unique to our business," Bielat said.
BJ's merchandises its seasonal candies on "double candy endcaps" of two pallets on the bottom with two shelves above, giving the store three levels of displays. The displays are stocked as early into the season as possible, with Christmas items being loaded the first week in October, Easter during Super Bowl weekend, spring and summer right after Easter and Halloween right after Labor Day.
"These displays are located at the ends of our candy runs of steel. They are situated on the main aisle so they get lots of traffic, with 80% to 90% of members who come through the building passing these displays. It really captures their attention, and with the impulsiveness of candy, the candy just ends up in their carts," Bielat said.
"We bring all the seasonal candy together in one spot and condition our members to look for it in that spot season after season," he explained.
The displays are merchandised in about 40 linear feet of space.
"I would love to have more space, and we are lobbying to get more for these types of candies, but it is very difficult. The challenge is to offer as many items as we possibly can to our members to give them that variety, but to also be aware of the inventory risks that come into play after the season is over," he said, noting that sell-through is about 92% to 94%.
"The displays remain fully stocked right up until Christmas. We try to create a destination shop for these items via a full-page ad in our BJ's magazine that is distributed and mailed directly to over three million members," he continued.
Easter items at BJ's are mostly limited to "basket fillers" like hollow rabbits, jelly beans and marshmallow eggs.
"We no longer sell prepackaged Easter baskets, but we sell the ingredients to fill them, and it has been a very successful program for us," he said. But this past Easter's sales were disappointing, he noted, with 92% sell-through due to over-buying.
"Our Easter sales have traditionally been for children's candy, but this coming Easter we are going to look for adult items. We've neglected that segment. We're going to be looking for a smaller size box of upscale chocolates," Bielat said.
Margins on spring and summer items are usually lower, because they are targeted to business customers who resell them in candy stores and other outlets.
"In spring and summer we try to carry fad items. Right now we have Spice Girl lollipops that are just flying off the shelf. They are hot with the kids and they can't get enough of it," Bielat said.
Halloween items are supplemented with additional display space at the front of the stores near the cash registers.
"We actually plan to be out of Halloween before the holiday," Bielat said, adding that any of the club's 150 stockkeeping units of candy can be placed on the display in a pinch.
Schnuck Markets has increased its seasonal candy sales by moving the items up early in the shopping pattern.
Historically, Schnuck placed its seasonal candy items mid-aisle. But after running a test that moved the items to the front of the store, the retailer saw anywhere from 30% to 50% increases in seasonal sales, and even sold out before the holiday, said Keith Shannon, category manager for the St. Louis-based chain.
The chain also places signs in the regular candy aisle about every 4 feet, which inform shoppers where the holiday candy is located.
"From Labor Day until Easter Sunday we give our stores instructions to have some form of seasonal candy on the floor, because one holiday rolls into the next. We ship Halloween the week before Labor Day, and subsequent holidays are shipped the week of the previous holiday," Shannon said.
Shannon also noted that Schnuck has its own small version of the All Candy Expo three to four months before every major seasonal holiday.
"Each vendor has a table with their new items. Vendors have a chance to talk to the grocery department managers and review their orders for the current season," Shannon said.
"The stores bring their holiday records from the previous year. Based on our scan data and sell-through from the previous season, we place the orders for the upcoming season," he explained.
"We are successful with seasonal candy because we have a dedicated program of basic seasonal merchandising principles," Shannon said. "We feel that if the store managers have input [concerning] the product they are receiving, they will be a lot more dedicated at the store level in generating sell-through."
As a result, Schnuck has substantially reduced its after-season markdowns. The markdown program begins after the holiday, with 50% off remaining inventory.
Al Gordon, vice president of Information Resources Inc., Chicago, who moderated the roundtable, noted that a well-merchandised seasonal display can drive overall store sales.
"A well-merchandised seasonal candy department sets the seasonal theme for the retailer and sends the message to your shoppers that your store is THE place to shop for all of their holiday needs," Gordon said.
Gordon noted that over the last three years dollar sales of seasonal candies have grown about 30% faster than total sales of confections.
In supermarkets Halloween candy sales were up 5.3%, Christmas sales rose 5.2%, Valentine's Day sales were up 10.9% and Easter candy sales climbed 10%, Gordon reported.
Supermarkets dominate the Halloween and non-seasonal candy sales categories, with a respective 45% and 51.8% market share, Gordon said. By comparison, mass merchandisers have 38.3% of the Halloween candy business, and drug stores have 16.9%.
When it comes to Christmas candy, mass merchandisers lead the way with a 43.1% market share, compared to 26.2% for drug stores and 30.7% for supermarkets.
Mass merchandisers also sell the bulk of the Easter candy (44.1%), compared to drug stores (27.9%) and supermarkets (28%).
But drug stores still hold the lead on Valentine's candy, with a 36.6% market share, compared to 35.9% for mass merchandisers and 27.5% for supermarkets.