Light bulb technology is steadily improving, but the basics still rule supermarket lighting selections.
Offering consumers the very latest in lighting trends seems like a smart decision for any retailer, but supermarkets ought not neglect conventional lighting options when presenting the most modern in luminosity, industry sources told SN.
Take Publix Super Markets, for example. The chain has enjoyed major growth in light bulb unit sales over the past few years, according to Maria Brous, director of media and community relations for the Lakeland, Fla.-based retailer.
The secret, she said, is Publix's private-label line, which includes four-packs of soft white light bulbs and three-way light bulbs, combined with a careful selection of newer, specialty bulbs.
"Specialty bulbs help build margin in the category and satisfy the needs of our customers," Brous said, while the private-label selection provides the high-volume items in the category.
Soft white, three-ways, outdoor flood bulbs, appliance and candelabra bulbs are the products supermarkets need to stick with and stock, said Larry Ishii, general manager of GM/HBC, Unified Western Grocers, Commerce, Calif.
Four-pack soft white bulbs are the mainstay, "no question about that, and I don't see a drop off in the future," Ishii said.
This, however, can be a blessing as well as a curse. "The high-volume light bulbs make it hard for retailers to branch out in this category without sacrificing meaningful sales," Ishii said.
Because supermarket lighting category sales rely more on providing convenience than on providing a wide selection, retailers should identify where the biggest percentage of sales contribution will come from and make a sharp decision on what to carry, sources told SN.
This can mean retaining strong national brands and private-label bulbs only.
Consumer values follow strongly identified brands rather than simple commodity items, said Robert Passikoff, president of Brand Keys, New York, a brand and customer loyalty research consultancy.
"You've got brands like Toyota, General Electric, Discover Card and Starbucks that resonate, and private-label store brands that are doing a great job of differentiating themselves. And then there are the other brands that are falling away and becoming category placeholders," he said. "You know them, you're aware of them, but they don't mean anything to you."
It is these "placeholder" brands that supermarkets should avoid, Passikoff said. "When a brand loses meaning, it loses strength, and therefore it loses customer consideration and ultimately any purchase at all," he added.
Paying attention to preferences by region is another important factor, Ishii said. "Certain brands are preferred in certain areas, and sales can be driven by following that regionality," he said.
Figures from Information Resources Inc., Chicago, show that General Electric Co., Cleveland, Ohio, light bulbs are at the top of the category for supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52 weeks that ended Sept. 4. General Electric held $66.9 million in dollar share of sales; private-label light bulbs were next in line at $14.2 million, followed by Osram Sylvania, Danvers, Mass.; Philips Lighting, Somerset, N.J.; and Feit Electric Co., Pico Rivera, Calif.
Overall, the category is down 5.2% from a year ago, and "while General Electric is the top vendor, sales went down in every GE brand that falls in the top 20 selling brands, with the exception of Reveal Light Bulbs, which rose 18.1% and GE Soft White Light Bulbs, which rose 41.1%," said John McIndoe, vice president of global media relations at IRI, Chicago. Sylvania light bulbs rose 3% as well.
Private-label light bulb sales rose 9% for the same time period, McIndoe added, proving that strong brands and conventional options are doing the best in sales.
"Spot bulbs are still one of the fastest-growing categories for us, and the biggest change in light bulbs in over 10 years," Price Chopper's Serota said. Spot bulbs give a softer, cleaner light that eliminates shadows and are commonly used in modern kitchens, and throughout the entire house, he said.
Still, the traditional soft white bulbs are by far Price Chopper's largest lighting selection in terms of sales units, he said.
At Publix, compact fluorescents are the most popular specialty bulbs, Brous said.
"We compete by providing the customer a complete shopping experience. Although we may miss a specialty bulb in our offering, we do not miss the items the customer would expect to find in a grocery store," Serota said.
Expanding the lighting category in a supermarket is a balancing act, Passikoff said. Retailers must find a way to entice customers to buy lighting products while they are already in the supermarket rather than going to a hardware store, and as always, convenience factors in.
"Convenience has multiplied nearly eight times in terms of importance to consumers in the past decade, so people are not looking at traditional retail outlets in the same way. And retailers have to re-craft their images to prove their ability to deliver almost anything," Passikoff said.
One way to stimulate additional sales is with cross merchandising. "While the light bulb part of the industry has always been a steady business, I've recently seen the opportunity to cross merchandise with the college market's back-to-school season and with lighting for the home office environment," said Steven Jacober, president of the School, Home, & Office Products Association, Dayton, Ohio.
Price Chopper's Serota agrees. "We are always looking for ways of creating additional sales through impulse merchandising. Related tie-ins are also a great way to stimulate these sales," he said.
Due to the steady need for the product, even merchandising light bulbs can be difficult. "The product itself makes merchandising for the category typical," Ishii said. "It hasn't changed too dramatically in the past five years or more."
Getting light bulbs outside of the lighting section and into other areas of the store is key to merchandising, said Robert Stuart, spokesman for General Electric. "Vanity bulbs could be placed by cosmetics, night lights could be placed by baby food, and outdoor lights could be placed in seasonal when appropriate. There is a lot of opportunity for cross merchandising and promotion."
No matter how creative merchandising gets, there is always the issue of where to put the merchandise. "The problem with light bulbs is not in understanding what to carry but one of where you can actually allocate space for it," Passikoff said.
"Promotions should be used to drive sales since conventional store retailers don't have the space for things like recessed lighting displays and other applications found in newer homes," Ishii said, referring to retailers that typically have 4- or 8-foot sections available for lighting.
It is not the bigger space allocation itself, but the strong promotions that bigger stores tend to run that give them an advantage, Stuart said. "Supermarkets should keep the product in front of customers, whether with endcaps or circular advertising."
"We believe we have devoted ample space," Publix's Brous said. "We provide our customers with variety, value and choice in the convenience of their regular grocery shopping."
In the end, maintaining a current selection that includes trends as well as classical best sellers may be as simple as listening. "Our current light bulb sets are very productive. We are very fortunate to have a customer base that does not hesitate to communicate to us on items they would like to see in our stores," Serota said.
But not too much at Price Chopper has had to change. "We have not had many requests in this category," he said.
Style and Efficiency
With a higher margin and improved style and efficiency, specialty bulbs are an essential product to offer customers.
However, it is more difficult to decipher whether customers are ready for new offerings. "Specialty bulbs are still a slow growth area because I don't think consumers yet understand what a compact fluorescent or a mini spiral bulb is, nor do they fully grasp the wattage savings on electric costs from energy-saving products like these," said Cathy Kennedy, nonfood buyer for Bashas', Chandler, Ariz.
Rising gas prices and hurricanes in the South may just boost consumer consciousness. "The difference this year from last year is that consumers are becoming more aware of the energy-saving products on the market," said Jack Serota, vice president, GM/HBC, Price Chopper Supermarkets, Schenectady, N.Y. -- WENDY TOTH
