Front-end eyed as bigger retail opportunity

Retailers need to update their front-end merchandising strategies to capture an increased opportunity with a changing shopper, according to speakers at an educational session at FMI Connect in Chicago.

"The front end of the food store is the last impression shoppers have of your store, but it can be overwhelming to them," said Steve Zoellner director of Merchandise Solutions, Mondelez Global.

"You need to focus on power categories which drive more than 90% of front-end sales, which are beverages, confection and magazines," said Ron Hughes, director, Shopper Experience Innovation, Coca-Cola Refreshments. Power categories reflect attributes including high impulse, frequent purchases, and high household penetration, he said.

A consortium of seven major companies have sponsored an FMI Connect exhibit called "Front End of Tomorrow" that focuses on how to address the opportunity. Consortium members conducted research using shopper insights and best practices analysis to develop conclusions.

Among the points discussed during the session, speakers said 44% of shoppers often buy front-end products on impulse, a 1% conversion opportunity equates to $560 million opportunity for the grocery industry, and mCommerce shoppers spend 18% more on impulse categories during a mobile trip. Speakers urged the industry to focus on interactivity, engagement, enhanced capabilities for mobile shopping, and improved layouts to help drive success.

The front end is "right for SKU rationalization," said Bill Romollino, VP, shopper insights, Time Warner Retail Sales and Marketing. "Retailers need to determine what items need to be there, and focus on those items and eliminate clutter in order to excite customers."

Speakers said that 38% of front-end transactions are completed at self-checkout lanes, which they said indicates the need for new solutions.

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"We need new, innovative impulse merchandising solutions at self-checkout," said Mike Inderrieden, director, human factors self-service, NCR Corp.

Joseph Bivona,VP, customer development, Time/Warner Retail, in an interview at the show floor exhibit, said the consortium's focus is agnostic in the sense of promoting the front-end over any particular segments or products.

"The goal is to understand what consumers are looking for, and what the front-end experience should look like," he said. "Displays at stores haven't necessarily changed, but consumers have changed, so we need to change with them."

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