Impulse sales are the heart and soul of local retailing, helping to push up basket spend and deliver the vital extra sales and profits that today’s retailers vitally require in today’s uber-competitive marketplace.
by Antony Begley
Unplanned purchases are what local retailing is all about these days and never have they been so important. Driving regular footfall is one thing, but capitalising on it is what makes convenience retailing tick in today’s ultra-competitive trading environment. Encouraging every shopper to add just a single item into their basket that they hadn’t intended to buy can make a huge effect on a store’s profitability at the end of a year – but where to start? The key is in being proactive.
But what exactly does proactive mean? Well, it turns out it means a lot of things, but all of them involve putting a little extra thought and a little extra effort into ensuring that your store is set up to offer customers as many nudges as possible to encourage them to add an item or two onto their planned basket spend.
One of the most successful methods of driving impulse sales is in the efficient, but notoriously difficult practice of upselling at the till. It’s easy to do it badly, as countless retailers in train stations do by offering every shopper an enormous bar of chocolate for £1, regardless of what they’re already buying or whether they look like the sort of person who might want a slab of chocolate.
Do it well however and it can drive huge incremental sales. The former David Sands business made it a core activity in their stores, often choosing highly desirable, high margin, high value products like punnets of local strawberries to turbo-charge basket spend. Who doesn’t like fresh, local strawberries?
CJ Lang now routinely practises upselling at the till and while it can be difficult to ensure staff completely ‘buy in’ to the idea, when it’s done well it works wonders.
The right range
Not everyone has access to plump local strawberries of course, but staying aware of the key impulse categories means you needn’t miss out. They key impulse categories – certainly in terms of driving volume sales – remain the old favourites: confectionery, gum, soft drinks, crisps and snacks.
The most obvious place to drive impulse sales is at the tillpoint, but don’t forget to put in place a strategy that will create impulse sales throughout the store. Aisle ends are great for promotional stock and clip strips can be used throughout, particularly for linked purchases. The area around the entrance is great for dump bins and seasonal displays and even on all major fixtures you can still push up impulse sales by keeping the fastest rate of sale products at eye level.
Every fixture on your store should be laid out with impulse purchases in mind.
NPD is a particularly strong driver so why not dedicate some permanent tillpoint space to NPD? There is no shortage of great new products for retailers to build activity around, often backed by big money marketing spend.
A great example is new goodnessKNOWS from Mars, available this month. Mars describes the new brand as its “biggest launch in 20 years” and is throwing £4.6m behind the launch. Even better, 10% of profits from sales will go to a “Goodness Knows Fund” that will support community projects and local initiatives.
Coming in four snackable squares with fruit, whole nuts, rolled oats and dipped in dark chocolate, goodnessKNOWS is pitched as a shareable treat that can be eaten all at once, or broken up through the day. The product will be available in three varieties: Cranberry & Almond, Blueberry & Almond and Apple, Peanut & Almond, all with an RRP of 90p.
It contains no artificial colours, flavours or preservatives and contains fewer than 160 calories.
Michele Oliver, VP – Marketing – Mars Chocolate UK, says: “Following a successful launch in the US last year where it became the third largest brand in its first six months, we’re thrilled to launch goodnessKNOWS in the UK.
“It has been created to fit in with people’s busy lifestyles, coming in four squares that can be enjoyed all at once or eaten throughout the day. However, it is not just snacking on the go, consumers increasingly want products that match the values they live by. Not only is goodnessKNOWS a great-tasting treat, it provides the consumer with that little bit more – a product that can help to spread a little bit of goodness in their communities by giving back to good causes in a small way.”
Cadbury Dairy Milk has also been busy on the NPD front with its Big Taste lines in a handy 43g single format that is ideal for the impulse market. Cadbury Dairy Milk Big Taste Toffee Whole Nut combines the textures of whole nuts with toffee smothered in Cadbury Dairy Milk chocolate. The product is ideal for shoppers looking for textured eats, chunky bites and intense chocolatey flavours when they’re on-the-go or during the afternoon dip.
No overview of impulse sales would be complete without a look at the daddy of impulse sales, gum. The category is worth over £263m [Nielsen, Mar 2017], although a whopping £248m of that is accounted for by Wrigley alone.
As in so many categories these days, the growth is coming through sugar-free variants and Wrigley expects this trend to continue – so this should be reflected in the gum fixture in-store. The Wrigley Extra brand alone is worth £205m with the core flavours – Peppermint and Spearmint – mopping up £131m worth of sales themselves.
NPD is just as vital in the gum category when it comes to creating impulse sales and the launch of the Extra gum bottle range has helped grow the category and encourage customers to trade up. Julio Guijarro, Marketing Director, Wrigley UK, says: “Bottle formats are seeing increasing success, with the trend towards snacking at work and eating and drinking on the road being key to their performance. Consumers are looking for a convenient way to keep their teeth clean and healthy after eating and drinking, when brushing isn’t possible. Wrigley’s bottle formats (offering both 46 and 60 pellets) meet this demand – they’re ideal for desk or car and are a great oral care solution for those who graze frequently throughout the day. They have seen 19% growth in the last 12 months [Neilsen, Mar 2017].
New price marked packs and price marked hanging bags have also helped add some excitement into the category.
Confectionery is another must at the tillpoint, as Susan Nash, Trade Communications Manager at Mondelez International explains: “The confectionery category is one of the biggest opportunities to drive sales in store. Confectionery is the most impulsive category [CPT 2015], meaning it can really help you drive your sales – in particular incremental sales. Around 19% of shoppers will visit just the till area and nowhere else in store [HIM, 2014].
“A huge 70% of purchase decisions are made in store, which makes display and category management vitally important tools. By stocking a range of exciting confectionery singles and merchandising them effectively, retailers can ensure they make the most of the impulse opportunity.”
Scotland’s £830m soft drinks category [IRI, Jan 2017] continues to be one of the most profitable categories for convenience retailers, particularly in summer – and plays a vital role in impulse sales.
But to keep leveraging the category as efficiently as possible, retailers must keep up with the latest shopper trends, says Adrian Troy, Marketing Director at AG Barr.
“The soft drinks market has evolved, with shoppers increasingly looking for greater choice at the fixture,” he says. “AG Barr is encouraging retailers to ensure that their soft drinks range includes a wide variety of low and zero sugar variants to cater for the needs of all Scottish shoppers.”
Troy highlights Irn-Bru Sugar Free, Scotland’s No.1 low-calorie flavoured carbonate [IRI, Jan 2017], as a must stock, as well as Irn-Bru Xtra, the first new permanent product from Irn-Bru in 35 years.
The same low and no sugar trend applies to flavoured waters and energy drinks – so it’s vital that retailers review their ranges to ensure they are not missing out on impulse sales by failing to stock the lines shoppers are looking for.
Positioning in-store also plays a key role – for example, shoppers that are looking for a healthy option tend to look at the water fixture in the chiller, so AG Barr recommends that Rubicon Spring is stocked in the chiller cabinet, sited between carbonates and water. Irn-Bru Xtra should be merchandised between Irn-Bru’s regular and sugar-free brand variants.