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Optimizing
Maximizing Shopper Interaction In A New Era Of Technology
Front End Checkout Merchandising
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Front-End Focus Leadership Sponsors
The Front-End Focus Leadership sponsors are committed to providing continued front-end merchandising insights and
integrated solutions to improve store performance & enhance customer satisfaction
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The Front-End Situation
A location most every shopper passes
The Front-End checkout is a critical location in the store
Major location for immediate consumption snacks and other impulse items
It represents a significant source of impulse sales
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Emerging Front End Checkout Trends
Increased retailer focus on checkout trips, basket size and sales performance
Retailers increasingly want to reduce design and style complexity
Lower profile fixtures – streamlined look – category segmentation
Average program life – 4.5 years
Additional and larger beverage coolers
Self-checkout transactions continue to grow – more stores & lanes/store
Growing desire by some retailers to add space for promotions
Emerging categories & speed to market of new items
Role of the Power Categories
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Sales of Front-End Items
Annual Supermarket
Front-end items generate $5.85 Billion for Supermarkets
Improving Front-End Checkout Merchandising could yield an additional $1.76 Billion in sales
The Front-End Represents About 1.0% of Grocery Store Sales and 1.3% of Profits
* Source: Front-End Focus, Progressive Grocer 2012 5
Grocery Front-End Checkstand
Store Sales Store Profits
1.0%
1.3%
$7.61 Billion
$5.85 Billion
$1.76 Billion
$ Opportunity For Improvement Of
Front-End Merchandising
Annual Supermarket Sales* =
$585 Billion x 1.0% of Sales =
$5.85 Billion
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Incremental Sales Driven By Impulse Buying Are Key
Percent of Decisions Made In-Store
Magazines and Consumables drive incremental sales and those purchase decisions are generally made in store
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* Source: Front-End Focus
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Beverages, Magazines, & Confectionery Generate Over 80% of Checkout Sales & Are Purchased Frequently
Percent of Total Checkout Dollar Sales
And they are the power categories across all lane types
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* Source: TWR Checkout Research, 2011 (eight retailers and over 1,400 stores), 52 weeks through 2010 to 2011, Impulse Marketing
Percent of Consumers Buying At Checkout Once a Month or More
(% of Purchasers of Category)
84%
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Front-End Power Categories
$ Share of Front-End Sales
Impulsiveness of Purchase
Front-End Power Categories Are Defined By Key Metrics
Frequency of Purchase
Household Penetration
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* Source: Front-End Focus, DHC Analysis
High performing retailers consider four essential shopper demand criteria when allocating space
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Best Practice: Manage The Front-End Based On Consumer Buying Behavior
Focus on key categories that: • Have high Household
Penetration
• Have high Purchase Frequency
• Provide Higher Impulse Sales
• Generate higher Front- End Sales
Health Items Razors/Blades Baked Goods
Lip Care Oral Care
Household Products Audio/Video/DVD
Other Snacks Beauty Care
Grocery Products Film/Camera Supplies
Children’s Items Nutrition/Energy Bars
Books Maps/Horoscopes/Puzzles
Low Scores
Salty Snacks Batteries/Flashlights
Cookies/Crackers Nuts/Seeds
Meat Snacks Gift/Phone Cards
Tobacco Accessories
Mixed Scores
Confectionery Beverages Magazines
High Scores
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* Source: Front-End Focus
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Magazines And Confectionery Should Be On ALL Lanes
Consumers tend NOT to shop across checkout lanes so retailers must have key consumer front-end categories available on every lane
“I don’t select a checkout lane based
on the items displayed there.”
67%
60% “I rarely take items from one checkout and wait in line at
another.”
60%
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* Source: Front-End Focus, Envirosell
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Visual Attention is Focused on the Power Categories Resulting in Incremental Sales
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* Source: TWR, Indiana University
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Visual Attention is Focused on the Power Categories Resulting in Incremental Sales
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* Source: TWR, Indiana University
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Visual Attention is Focused on the Power Categories Resulting in Incremental Sales
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* Source: TWR, Indiana University
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Self-Checkout
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Penetration Of Self-Checkout Usage Has Reached A Critical Level, Similar To ATMs
Self-Service Devices used in Last 6 Months
5%
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* Source: Self-Service Consumer Study
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Cashier Lanes
$34.50$31.71
Basket WithoutCheckout Item
Basket With CheckoutItem
Checkout Purchases Make A Big Difference In Profitability
+8.8%
…Especially at self-checkout where there is a 13% increase in basket size
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* Source: Front-End Focus, TWR Checkout Research, 2011
Self-Checkout Lanes
$23.40$20.61
Basket Without Checkout Items
Basket With Checkout Items
+13.5%
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Inspiration
Simplicity
Shoppers Choose to Use a Self-Checkout Lane Based Upon 4 Core Shopper Needs:
Speed, Control, Simplicity, & Inspiration
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Source: Coca-Cola SEI Qualitative Concept Optimization: Grocery Self Checkout, Gongos Research, 10/2011.
I want to get in and out as quickly as possible
I want control of the check-out process Control
I want it organized and clutter-free
I want shopping to be more fun than a chore
Speed
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Front-End Merchandising Can Dramatically Effect The Value Of The Lane, Especially At Self-Checkout
Lack of merchandising at self-checkout dramatically hurts sales
Merchandising of self-checkout is generally an afterthought
Without merchandising self-checkout, the potential lost sales is almost $100,000 per store
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* Source: Front-End Focus
Average Annual Front-End Dollars
$8,772
$25,900$23,671
Regular Express Self-Checkout
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Audits Suggest That 50% Of Self-Checkouts Are Not Merchandised
Self-Checkout Merchandising Conditions % of Stores Where Self-Checkout Has…
Good Merchandising
11%
Average/Less Than Average
Merchandising 39%
No Merchandising
50%
Lack of merchandising has a pronounced effect on impulse sales
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* Source: Industry Audit
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Self-Checkout Lane Today Vary Dramatically in Layout & Merchandising
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Self-Checkout Merchandising Today Tends to Fall into One of Three Broad Categories
Incongruent SCO areas with items or categories that have little shopper relevance, but appear to generate some revenue and/or liquidate inventory
Tacked-On Quick-fix solutions that simply position merchandising next to a SCO
Cluttered Disorganized, bazaar-like environments that are congested with fixtures, creating queuing confusion and hindering SCO checkout access
Poor Merchandising
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Incomplete Solutions that lack key categories shoppers seek and buy everyday from regular checkout lanes
Inconsistent SCO environments with merchandised categories that vary greatly by SCO lane
Disconnected Solutions that were designed with little regard to shopper needs and behavior/ checkout process
Uninspired Functional, transactional solutions that still have opportunity to better inspire impulse purchases
Good, Not Great Merchandising
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Empty SCO environments that sacrifice profitable front end sales for operating efficiency
Zero Merchandising
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50% of SCOs have NO
Merchandising
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Maximize Sales at Self-Checkout Lanes With More Complete Merchandising
Front-End sales at Self-Checkouts improve significantly with more complete merchandising
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* Source: FEF Study, DHC Analysis.
Self-Checkout Sales Per $ MM ACV Index by Level of Merchandising
10997
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Low Merchandising (<200 Inches)
Limited Merchandising
(400 Inches)
Most Complete Merchandising (>400 Inches)
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Beverages, Magazines, & Confectionery Are The Sales Drivers Of The Self-Checkout Lanes
Strategy: Focus on these key categories on self-checkout to drive incremental sales
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* Source: Front-End Focus
% of Front-End Dollar Sales in Self-Checkout Lanes
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There Are Many Incomplete Approaches To Merchandising The Self-Checkout Lanes
But none of them are integrated … until now
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Innovative solutions that leverage both new technology and
checkstand best practices...
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Front End Solutions Collaborative Team Best Practice Fixture Designs
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Front End Solutions Collaborative Team Best Practice Fixture Designs
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Front End Solutions Collaborative Team Best Practice Fixture Designs
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Front End Solutions Collaborative Team Best Practice Fixture Designs
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An integrated solution of technology and merchandising that is installed simultaneously
Sponsors of the Front-End Solution Center are looking to test front-end merchandising concepts with retailers that want to improve their check-out sales.
Working Together To Provide Integrated Merchandising Solutions For Self-Checkout Lanes
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Optimizing
Maximizing Shopper Interaction In A New Era Of Technology
Front End Checkout Merchandising
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