DSI WILL DO FRONT-END STUDY

JOEL ELSON

WEST PALM BEACH, Fla. -- Magazine wholesaler Distribution Services Inc. here plans to develop a best-practice program for front-end merchandising of magazines, snacks and other nonfood at supermarket checkouts.

The periodicals distributor will work with suppliers of competing front-end products in a study that will test the efficacy of managing checkstand magazine fixtures as a separate department or category. According to Michael Porche, DSI's executive vice president, the study will identify the kinds of products customers want to buy, not the items retailers and vendors want to stock.

The magazine wholesaler has yet to sign a formal agreement with other vendors, but it is talking to food and nonfood packaged-goods companies about their potential participation in the study, said Porche. He declined to name potential supplier or retailer participants.

This project is similar to the "Front-End Focus" study conducted by Time Distribution Services, New York, and M&M/Mars, a division of Mars, Inc., Hackettown, N.J. Results from the first phase of that study, which assessed shopper attitudes and behavior at the checkout, were presented at this year's FMI Convention. A third phase of the study, examining factors that influence checkstand sales, is under progress.

"We'll use a partner discipline approach that combines our collective resources to determine what is the best way to ultimately manage the checkout," said Porche. "We want to learn what products should be there and their positioning."

In the food channel, products like batteries, film, shaving needs, confections and soda represent 90% of total front-end sales, according to Porche. "Each category tries to establish its own space. However, suppliers want to understand how consumer purchasing behavior influences space and placement of these items."

During the first quarter DSI will begin a six-month pilot study at three stores in order to benchmark the checkout product categories that should be planogrammed at the front end. The study will underscore the correct amount of "traditional" checkout items to carry, he added. "No one, even retailers, understands the checkout process as it relates to what are the best ways to merchandise front-end magazine and candy racks, both at express and regular lanes," Porche said.

Magazine wholesalers usually play a major role in designing and stocking checkout magazine fixtures. However, too often retailers manage the space based on upfront slotting payments, said Porche.

Assigning a front-end manager with the ability and autonomy to manage the whole checkout area would eliminate department struggles for additional space at checkout fixtures among some buying executives, he said. "The retailer would assign the checkout and all of the merchandising of that area to a team or leader," Porche said. According to Porche, power struggles within the organization become centered at the checkouts. "Magazines in some stores are placed based on relationships rather than on hard and fast information on what really moves and on what should be at certain checkouts because of store demographics," he said.

Commenting on the value of such a study, Gary Schloss, vice president of general merchandise at Carr Gottstein Foods, Anchorage, Alaska, said the chain determines products at checkout based upon "whatever is the best deal and has the most potential for impulse sales with the customer, like magazines, candy and some film and batteries." "Quite frankly, the mass merchandisers have been experts at front-end merchandising for years, in treating that area as a different department, with a different manager," said Charles Yahn, vice president of general merchandise at Associated Wholesalers, York, Pa.

Because of the strategic importance of front-end racks and their high shopper exposure, "if you have a coordinated plan to keep the product there, full and refreshed according to the proper season, it is an excellent selling area," Yahn stated.