PHOENIX — New research to be presented here today at the General Merchandise Marketing Conference of GMDC, Colorado Springs, confirms the importance of interdepartmental cross-merchandising in building sales and market share, said Jerry Friedler, an independent consultant based in Milton, Conn., who authored the study.
The study looked at a Valentine's Day test in four “substantial” chains in various regions of the country, said Friedler, who also was the lead consultant working with Willard Bishop, Barrington, Ill., on last year's “Seasonal Best Practices” study. GMDC would not identify the retailers involved. Crossmark, of Plano, Texas, a food broker focused on customized retailer services and execution, conducted the research.
“The new research supports the recommendations that were made in the 2006 study. It says that if companies look at seasonal as an opportunity for competitive advantage, one of the ways they can achieve this is through interdepartmental planning,” Friedler told SN prior to the conference.
The new report “clearly quantifies the dramatic results that can be achieved around key holiday periods, and the important steps that need to be taken to maximize the double-digit growth opportunities available,” said Dan Nelson, senior vice president, marketing and development, and chief operating officer of GMDC.
Retailers and suppliers have asked how much growth can be won by taking some of the steps and approaches recommended in the “Seasonal Best Practices” study, he noted. “The Valentine's Day report tells them that the potential is very big indeed. The results you can achieve more than outweigh the processes you need to put in place and things that should be done to achieve them.”
The four retailers in the test brought products relevant to Valentine's Day into one area, together with a dedicated checkstand, the study noted.
Among the observations of the study, based on syndicated data from ACNielsen, Schaumburg, Ill. were these:
In the categories that were tracked by ACNielsen, such as candy, spirits, electronics, candles, fresh fruits, bakery and toiletries gift sets, participating retailers saw a dollar sales increase of 37.4% for the two weeks preceding and including Valentine's Day of this year vs. the same period the year before. Non-participating retailers' sales rose 28.3%.
The participating retailers saw a market share increase that represented $5 million in incremental sales, and the increase impacted results storewide.
Among categories that showed the largest percentage growth in share of market in participating retailers vs. non-participating stores: imported table wine, up 301%; men's gift sets, up 236%; prerecorded videos, up 191%; and “special” chocolate candy, up 153%.
Some Valentine's Day-related categories, such as floral, greeting cards and plush toys/balloons, were not tracked by ACNielsen.
Valentine's Day was chosen for the test because it crosses many departments and because it is a very emotional holiday for men, women and their children, Nelson said. It also is a tightly confined purchase period, he said.
“You can see dramatic results when you have a strong theme and highly visible location, and you can build important shopper loyalty and a strong emotional bond with the shoppers who count on you to help them with their Valentine's needs,” Nelson said.
While the events lasted for two weeks, retailers noted that most Valentine's Day sales happen in the three days leading up to the holiday, Friedler said. “By creating these unified destination departments, these retailers are setting up their locations over time as the place to shop for Valentine's Day, so the consumer doesn't think about going somewhere else,” he said.