ACTING ON IMPULSE 1996

AMITY K. MOORE

News & Solutions Merchandising Report

When merchandising the candy category, "impulse" is a key word for supermarkets. Displays located throughout the store can significantly raise candy sales levels, retailers say."It's important to remember a disproportionate amount of candy is purchased due to impulse, which means merchandising candy in high-traffic areas makes good sense," said Marion Sullivan, corporate vice president of marketing at Roundy's, Pewaukee, Wis.

Whitney Hill, president of Whitney Hill & Associates, a consulting company based in Marietta, Ga., said out-of-aisle displays are needed because only one in five consumers shops the candy aisle.

"If you only have it in one place in the candy gondola, you're only getting a shot at 20% of the people," Hill said. "That's why you need to have it in other sections of the store." Carrying additional merchandise at the checkstands is not enough, he added.

Tom McClure, vice president of sales at Laurel Grocery Co., London, Ky., suggested that retailers take advantage of all the shippers available to them. "A store could have anywhere from 10 to 20 shippers up at any time -- a nice size supermarket I'm talking about." Smaller stores could use 12 scattered throughout the store, he said.

Many retailers find merchandising near the front end to be an especially good tactic for spurring impulse sales.

A source at a midsized Texas-based chain said he merchandises count goods on tables toward the front of the store at a multiple price point.

In terms of seasonal items, "you get your best response off a display," he said. The chain expands the seasonal idea by merchandising seasonal candies throughout the rest of the store, he added.

Getting store-level personnel to follow through is not a problem, he continued, because the chain provides store-level employees with directions for setting up promotional displays.

Other retailers take similar approaches in getting merchandising messages to the store level.

Roger Burks, senior vice president at The Mad Butcher, Pine Bluff, Ark., said he supplies store-level personnel with actual photos of what the department should look like after it's been set. "We have a little seminar and go over what goes where and so forth before the product comes in."

Bryan Ryckeley, a buyer at H.G. Hill Stores, Nashville, Tenn., puts instructions for store-level personnel in writing and then follows up. "If we're doing a special promotion, I'll send out a letter to all the stores saying this is what the promotion is. Generally, I have that followed up by a rep going to the store to actually implement the program," he added.

The Mad Butcher's Burks said he is tying in more candy with seasonal merchandise this year.

"[Right now] we're tying in and mixing in part of the Easter baskets; we're starting to merchandise a lot more candy into those departments," he said when SN spoke to him the week before Easter.

Burks said the size of a typical seasonal section varies from 4 feet to 24 feet. The biggest Easter seasonal area at one of his stores is 32 feet.

Planograms are used for both year-round and seasonal candy assortments, Burks said. "We set up our own planograms for these departments and it tells [the candy merchandisers] where to place [the merchandise]."

Ryckeley of H.G. Hill said his company is revising its candy aisle planogram. "It's got to be kept straight and organized. We've kind of had haphazard sets in a lot of our stores, and we're working toward getting a good planogram set."

Consultant Hill stressed the need to build displays throughout the store.

"The more places you put it, the more confectionery you're going to sell because it's heavily impulse," Hill said. "Sometimes you'll see stores that put a lot of [seasonal] stuff in the regular section and it inhibits sales of regular items."

The need for displays of seasonal candy, he added, is even greater. "It needs to be on display early so the consumer in that store understands you're going to be a big place for confectionery," he said.

Paul Kuny, national retailer sales director at M&M/Mars, Hackettstown, N.J., agreed with Hill.

"In addition to the fact that a majority of seasonal candy is sold in the two weeks preceding the event, 60% of those purchasing candy in those last two weeks had bought candy earlier in the seasonal timeframe. Early display is key for repeat purchases among those consumers," he said.

Roundy's Sullivan said the wholesaler views seasonal candy as being a part of the store's overall seasonal display commitment. "We have found the key to success of seasonal candy is in those stores that are willing to take some reasonable risks. The most serious candy sellers spend a lot of time and effort keeping good records in order to place an aggressive order from the onset. Then, they get the displays up in high-traffic areas very early in the season," she said. "It's critical to have multiple points of accessibility to drive incremental volume," Kuny of M&M/Mars said, referring to both seasonal and year-round assortments. "For example, singles and king-size candy should be at every checkout and can be effective at other key locations within the store." Hill of Hill & Associates said out-of-aisle merchandising strategies that have proved beneficial include: a rack or display in the deli department for shoppers who are seeking a quick meal or picnic items, a counter rack near the cash register if the supermarket has an in-store restaurant, and bulk and pick-a-mix-type candy displays, which he said get good response in the produce department.

Though out-of-aisle displays are crucial to the success of candy marketing, all those who spoke to SN warned of the need to remain focused on the primary candy display as well.

"Because variety is important to the candy consumer, there is importance in having a primary location with a wide assortment representing the various subcategories: chocolate, nonchocolate, gum and mints," Kuny of M&M/ Mars said.

Ample space must be dedicated to the section, Hill stated, saying 144 linear feet dedicated to candy display for a 25,000-square-foot store is adequate.

According to Hill, retailers should base their planograms on a couple of things: good variety of products and sales velocity. He added that brands should be grouped because they're often cross-couponed or advertised together. Major brands, he noted, should be placed in locations likely to catch shoppers' attention.

Hill also said it's time retailers invest in the store-within-a-store concept by creating larger candy sections in which candy-brand shirts and watches would help raise the gross.

In addition, he suggested retailers meld their margins -- a concept in which retailers can increase their overall margin by displaying several products at varying margin percentages. For example, a retailer could run a promotion on five candy items at 5% above cost. In-store, those five key items will be displayed with 35 other candy items. Those 35 other products may be selling at 10%, 25% or even 35% above cost, thus increasing the overall margin percentage more than the 5% the original five products would have brought in.

Hill and Jim Corcoran, director of trade relations at the National Confectioners Association, McLean, Va., said the grocery industry does not get its fair share of the confection business.

Hill attributes the lack of market share partly to the treatment of kids' novelties. "Kid's-type items are at a point where they deserve a section within the candy aisle. The grocery stores are letting the mass merchandisers, the drug accounts and convenience stores take most of the business," Hill said. Corcoran compared merchandising candy to merchandising detergent. "If you compare candy to the detergent section, there's only so much detergent that's going to be used. Are people going to wash more clothes because they will get a good deal on detergent? Basically, no. However, on candy, with good merchandising you can truly increase overall confection sales," Corcoran said.

Corcoran cited a kid's novelty display by a Giant Eagle in Pittsburgh as an example of good merchandising. "They move it around to different parts of the store. It's generally on wheels and they can put it in front of any gondola or anywhere in the store where space is available," he said.

The frozen food aisle could be an effective place to cross-merchandise candy, Corcoran said, noting that many confection companies have racks on which retailers can display chocolate bars in the freezer.