The battery market has changed along with the products that require their use, and for retailers, the key it knowing which products are likely to be in demand beyond the standard range this Christmas.
by Kevin Scott
The current economic climate has seen consumers across all categories demand better value from the brands they buy and batteries has been no exception to this, as consumers seek to make their money work harder, as well as better satisfying their changing demands.
Perhaps the best known brand in the sector is P&G’s Duracell. P&G says the key overall drivers of battery sales are visibility and availability. Batteries are mainly bought on impulse and as long as retailers make sure customers know where batteries are in-store and can see the product they want, successful sales will follow. The familiar Duracell copper and black cells instantly identify the category for many shoppers and create a focal point.
Traditionally, alkaline batteries have dominated the market however with technological advances, they are now declining in both value and volume terms.
This has been driven in part by a continued decline in electronic device sales and usage, coupled with shoppers using up the batteries that they have at home in the cupboard. The value of the category has also been weakening (average pence per cell has been in decline over the last four years) driven by static pricing, high promotional deal-depths and a shift in the mix of cells sold, i.e. more bulk buys and fewer premium cell types.
As for Duracell itself, the brand had a record value share in December 2011 with 70.8%, and Duracell Ultra Power continues to increase its share of the alkaline market, growing by 29% in the last three years as the brand works to trade shoppers up. Duracell is the number-one brand in the UK and growing, which is why it continues to invest. Some 88% of Duracell alkaline volume sales are from exclusive shoppers (i.e. they buy Duracell 100% of the time) or ‘highly loyal’ shoppers (i.e. they buy Duracell +50% of the time).
Emerging trends for batteries
Portable power has become an essential element of everyday life for consumers, and the way this power is consumed is critical in understanding the evolution of the sector.
In a declining market, innovation in future technology and great value for the shopper is critical. Within the alkaline market, it is paramount to drive category value through offering shoppers value for money on a product that offers long-lasting power.
An example of a new and emerging market is the need to power smartphones. Consumers and businesses will always need power, wherever they are and whatever they are doing. Duracell will always be the brand that provides them with their power needs and through a joint venture between Duracell and Powermat, the brand is developing power that is wireless, smart and user-friendly.
Specialty battery types, such as coin cells for 3D glasses, are also in growth.
Approximately 40% of batteries are bought on impulse, prompted by displays in-store, and half of these are made from displays at the checkout. However, regardless of whether they are on the shopping list or picked up on impulse, more than 85% of households buy batteries in the UK – there is still a fundamental need for them.
It is important for a retailer to develop a store-wide strategy on batteries to realise the full potential of the category, through both planned and impulsive purchases. There are three key sites for merchandising batteries:
- A clear and easy-to-shop main fixture with signpost branding
- Secondary sites around the store next to products that use batteries
- Till units or checkout displays to grab the attention of impulse buyers.
One to watch
The rechargeable lithium battery is proving to be a vital development in the current battery market space, however at this stage the lithium battery still has a great deal of ground work to put in before it can be ready for full market penetration and mass distribution.
Current low self discharge (LSD) offerings such as Sanyo’s eneloop are already beginning to bridge the gap between the standard cell and the not-quite-there yet rechargeable lithium battery. Readily available en masse, with all the attractions of a lithium battery but significantly greater longevity, the eneloop battery is successfully filling the niche that the lithium offering has not quite hit yet. Available in the most popular AA and AAA sizes, unlike its lithium cousin, eneloop is the pre-charged, ‘green’ battery that can be charged up to 1,800 times. Both energy and cost effective, LSD batteries can deliver a much stronger performance for a greater amount of time – meaning less time and money is spent on purchasing batteries, something which will go down a treat when it comes to Christmas morning.