LIGHTING THE NICHE

JOEL ELSON

Supermarkets are increasingly micromarketing lightbulb assortments according to stores' demographics and customer-income levels.

Dotting the lighting center with a selection that appeals to various customer groups is key to attracting and holding lighting-center sales, according to general merchandise buyers surveyed by SN.

While basic lightbulb selections still account for the majority of the $1.1 billion in lightbulb sales, supermarkets are developing customer niches with specialty bulbs that contribute healthy margins to their lighting sales.

"New product innovations such as lower-wattage, energy-saving bulbs attract shoppers," said Dave Lynam, merchandiser for general merchandise and health and beauty care at Harding's Friendly Markets, Plainwell, Mich.

"The product segment, which runs from $8 to $14, is an ever-enlarging category with higher-priced bulbs people are using after they see them in new electrical fixtures," said Ross Nixon, grocery merchandiser at Dahl's Food Markets, Des Moines, Iowa.

At Harding's porch lights, outdoor and indoor floods, and bent-tipped bulbs make up a prominent part of the section, said Lynam.

The retailer gives lighting products fairly high visibility in its supermarkets. It runs one to two ads per month for four-bulb packs, night lights and three-way bulbs, typically slashing margins from 30% down to 10% on advertised specials.

While Lynam acknowledges lightbulb promotions can take some people out of the lightbulb market for a while, they still need other types of lightbulbs, he noted.

Yet, halogen bulbs are absent from Harding's 4- to 16-foot lighting departments. "There hasn't been a strong demand for them," Lynam admits.

Dahl's Food Markets uses store-specific sales data to determine product mix, said Nixon.

"It's the easiest job. If your customers are buying an item you keep ordering it, and if they don't, you discontinue it," Nixon said.

Stores in areas with a lot of new housing development include halogens as a larger part of the overall mix, although sales of these bulbs have been on the slow side, he confirmed.

He sees the $8 to $14 price tag on a halogen bulb meeting too much shopper resistance, even though the bulb can last three years. "Consumers must grow accustomed to the long-term benefit over cheaper, shorter-lived conventional bulbs," he said.

Since halogens are still relatively new, Nixon believes there will be sales growth of this item. "Some consumers might buy halogens as a replacement or repeat purchase after using them in appliances and household fixtures."

At Dahl's, slower-turning items get fewer facings, or might be purged from the mix altogether. However, one-of-a-kind items might be kept to round out the overall assortment. Dahl's mainly promotes four-packs of 60-, 75- and 100-watt soft-white bulbs, three-way lights and 100-watt bulbs.

At Fiesta Mart, Houston, lighting sections are planogrammed with customers' pocketbooks in mind.

"We're doing more micromarketing now by store demographics in an effort to tailor the mix in our 8- and 12-foot lightbulb departments. We look at it from that approach -- adjusting the mix by customer needs," said Duane Robelia, general merchandise and HBC buyer.

Many of the stores are located in low- to middle-income communities where residents are some of the largest users of the state Lone Star benefits card, Robelia said.

In lower-income areas, basic bulbs perform better. Customers with fixed incomes shop more by price, Robelia added. The chain's lighting department shelf sets take into consideration that energy-saving bulbs do better at more affluent mainstream stores. Specialty bulbs, on the other hand, have become a part of the chain's basic assortment.

"We promote the basic items that people want at our inner-city stores and feature products like soft-whites and lower-wattage bulbs at our higher-income areas," said Robelia.

"There will always be room for specialty bulbs. It helps that a lot of specialty lamps are also being sold by the home centers," Robelia said.

While bulbs in four-packs make up the majority of sales for Homeland Stores, Oklahoma City, "specialty products are very important for maintaining department grosses," said Ken Jones, general merchandise director.

Homeland's 12- to 20-foot lightbulb departments also offer lower-wattage bulbs and halogen lighting products.

Homeland Stores actively promotes specialty bulbs in an effort to drive sales in the more profitable specialty-lighting end of the business.

ShopRite retailers, supplied by their co-op wholesaler, Wakefern Food Corp., Elizabeth, N.J., regularly promote lightbulbs by running constant in-store specials displayed prominently from the regular in-line department.

At ShopRite stores in Glassboro, Moorestown, and Cherry Hill, N.J., shelf call-outs alert customers to weekly category features and in-store specials.

The ShopRite at Ellisburg Shopping Center in Cherry Hill, for example, recently promoted a $1.99 half-price special on Sylvania halogen bulbs, down from the regular $3.99. A 67-watt Sylvania energy-saver bulb (equal to a 75-watt lightbulb) was priced at two bulbs for 99 cents, or $1.20 off the regular shelf price.