When Chandler, Ariz.-based Bashas’ Supermarkets decided to overhaul its front end sections, the Southwestern grocer embarked on the project only after a great deal of preparation.
“Three years ago, as we set out to remerchandise the front end, we surveyed all retailers in our market to see what new items/categories they had included in their front ends, and they all were merchandised with the current gum, candy, magazines, general merchandise, HBC and refrigerated beverages,” notes Bashas’ Category Manager Dave Vehon. “The front end purchases are, for the most part, impulse sales of items in a specific price range. Since convenience stores base their merchandising on impulse, we studied items that they had and we did not. Items like small-bag salty snacks, peg-bag candy, breakfast bars, sandwich crackers, bag crackers, bag snack mixes, sunflower seeds and meat snacks were a void at our front ends. We also noticed that retailers like Target and Walmart devoted shelf space at the entrance to the checkstands to merchandise that would change every two weeks or monthly, [and] that would vary from seasonal candy and snack items to beverages and general merchandise.”
After making these observations, “Bashas’ reduced the space devoted to magazines, sales of which have been declining, and replaced [them] with consumables currently not merchandised,” says Vehon. “These items included peg bags of Chips Ahoy, Cheez-Its, Chex Mix, fruit snacks, nuts, sunflower seeds, meat snacks and cracker items, to name a few. We created shelves at the entrance of each checkstand adjacent to the beverage coolers for promotional merchandise.”
Along with new products, the section got a new look. “We lowered the height of the front end checkstand, allowing our customers better visibility across the front end so they could see what checkstands were in operation,” adds Vehon. “This had a side benefit of helping cashiers see where lines were forming so they could quickly respond and call for additional cashier help.”
Further, the grocer “designed a simple unit for the self-checkout lanes that provided chilled beverages and a limited assortment of snacks and confection,” he recounts.
That level of attention to the front end is necessary, Vehon believes. “Retailers need to constantly monitor the sales of SKUs on the front end to identify the decliners and test more trending items such as better-for-you and healthier options,” he advises. “This not only includes snack items, but also beverages. With the demand growing for nutritional bars and juices on the front end, declining gum, mints, magazines and carbonated soft drinks will go away.”
The reason for this is to engage shoppers, thereby sparking section sales growth. “Space at the front end is premium, and every retailer must maximize the space with items that customers are responding favorably to, based on sales,” he observes. “The only drawback could be potential lost sales as you try to find the right items that will replace the decliners.”
When asked how the new front end has been received by shoppers, Vehon replies: “We believe the change has been favorable for both our customers and store team members. By lowering the height of our checkstands, store members have a better view of customers and their checkout needs. [For shoppers, we] added nonfood, HBC and consumables that did not exist before in this area of the store. Customers have reacted favorably by purchasing more of the new items we’ve introduced in the checkstand area. Since the front end revision, we have realized incremental sales and profits, not to mention monies gained through space placement. A win for customers, suppliers and for our company!”
Going forward, Vehon expects further innovations at checkout, even as some things remain the same. “Not only will the front end still have impulse items such as snacks and beverages, but there may also be interactive devices that help with decision-making, such as ordering dinner while in line,” he predicts. “The front end queue may also be configured differently, making for more impulsive offers prior to checkout.”
The 3 Rs
Mars Chocolate North America’s latest front end initiatives take into account its extensive global research into the emotional journey embarked on by consumers during their shopping experience, which led the candy maker to identify three key shopper need states that influence impulse purchase at the front end: Refresh, Reward and Remind.
“We’re currently working with a variety of retailers to activate the optimal Refresh, Reward, Remind category space allocation and merchandising,” says Aundria Cummings, senior director of category development at Hackettstown, N.J.-based Mars Chocolate. “We’re looking forward to furthering our front end insights with in market testing in 2016, which will optimize the layout by need state, enhancing impulsive purchasing at all of our customers.”
A Cooler Front End
Kathy Means, VP of industry relations at the Newark, Del.-based Produce Marketing Association, lists some key considerations for grocers interested in adding produce to their front ends, including customer convenience, such as merchandising any necessary utensils or napkins alongside fruit and veggie snacks; adequate refrigeration; frequent restocking to maintain the display’s attractiveness; promotional efforts via website, in-store signage and circulars to make sure shoppers know about the offering; and the necessity of monitoring the performance of such an initiative, both in terms of hard data (stats and scans) and soft data (customer reaction).
Among the advantages of merchandising produce at checkout, according to Means, are an enhanced store image conveying that “we care about you and your kids,” an increase in impulse buys, promotion opportunities with suppliers, higher produce sales to improve the profit margin, and grab-and-go customer convenience.
Dairy can also benefit from front end positioning. Cindy Sorensen, VP business development at the Midwest Dairy Association, in St. Paul, Minn., notes: “Historically, milk has been placed in the back corner of a grocer. This is due to operational efficiencies for stocking coolers, but also grocers’ banking on incremental purchases from shoppers as they walked past other products on their way to/from the milk cooler. However, [in] today’s competitive environment, which has milk being sold in many places which are much more convenient to shop than a grocery store, traditional grocers need to consider secondary placement of milk at the front end.”
Sorensen accordingly advises retailers to place grab-and-go coolers filled with quick-trip dairy staples at the front of the store, but not everyone’s in favor of such a move. “Oftentimes, grocers have told me they don’t like offering [the coolers] because they believe they may have lost additional sales on that customer’s trip to the store,” confides Sorensen, although she’s quick to add, “Our research indicates that shoppers appreciate the convenience for this quick-trip solution to fulfill their need and will reward those grocers on their stock up trips because they know their grocer understands the needs they have as a consumer.”
She also suggests that retailers roll out a Fuel Your Day snack solution center, a kiosk that should ideally “be located in the front of the store to fulfill the needs of those consumers who are looking for a healthy snack on the go. We tested this concept in-store and increased sales of all items included, with a higher sales lift on all dairy items included in the display.”
In fact, the chief advantage to all of the above strategies, notes Sorensen, is increased dairy sales. “These merchandising ideas fulfill a consumer need, whether … for on-the-go snacks, healthy snacks, convenient quick-trip fill-in shopping needs, or hassle-free checkouts with kids in tow,” she observes. “Consumers today are shopping at upwards of six retailers for all of their food needs, so how can a retailer capture some of the slippage to other channels? It’s by understanding consumers’ busy lifestyles, which means fewer meals at home, more snacking, [and] less time overall for shopping and meal planning.”
One slight drawback to dairy at the front end, however, is that “a retailer must commit staffing to keep dairy products stocked and in code at the front end,” concedes Sorensen. “This requires protocol to include all secondary locations in ordering and stocking procedures.”
Sorensen is a firm believer that healthier items, including dairy products, will eventually become an expected part of the checkout experience. “Overall, we are seeing more retailers moving away from traditional front end items such as gum, candy and soda and … now replacing those items with more healthy items, most of which are higher dollar-ring and higher profit-margin items,” she notes, describing the shift to such products as “a win for retailers and their shoppers.”