Your grocery clients know they have a fight on their hands. Sure, consumers love to come into their stores and buy fresh produce. But, with the grocery sector only expected to grow by about 1% this year, forward-thinking operators need to advertise other product lines to see a big sales boost. Here’s what winning retailers are doing.
In the second annual Power of GM and HBC in Grocery report, Acosta and Food Marketing Institute analysts take a top-down look at the industry. These days, sales of health and beauty care supplies in traditional stores amount to $50 billion. While 80% of consumers shop for these products in grocery stores, at least 77% of the spending happens at other retail establishments. A similar pattern happens in the general merchandise category. Of the $31 billion that consumers spend on these products in bricks-and-mortar stores, 88% goes to stores operating outside the grocery category.
We all know that grocery stores can tempt shoppers with immediacy, convenience, great prices, and coupons. But, they still have to compete with online operators who are offering shoppers their own form of convenience and deals. In fact, for every dollar spent on e‑commerce, 43% goes to general merchandise, while 27% goes to beauty and 13% to health care.
If your grocery store clients want to score higher sales of items linked to better profit margins, they need a new game plan. They can start by listening to their clients. Consumers say they’d shop more in stores if they had:
- More promotions 69%
- Better selection 60%
- Better aisle organization 45%
Analysts point out that grocers who engage in store disruption are seeing sales increases. For example, these grocers are changing aisle organization. Since 50% of shoppers visit the perimeter and only 20% visit HBC and GM aisles weekly, smart grocers are making changes. A produce shopper may find a display of vegetable steamers arranged next to the beans and broccoli. That placement is guaranteed to increase steamer sales.
Top grocers are winning by emphasizing cold/allergy/sinus medicine, vitamins, toothpaste, shampoo and weight control products in the HBC category. The emphasis includes better promotions and improved aisle organization. Top retailers have received a boost of 5.3% in sales of these products as a result of making simple changes.
Top grocers are also promoting and prominently displaying general merchandise items like culinary, office supplies, and kitchen storage items. Their efforts on this front have yielded a 7.4% sales boost.
Grocers must increase the amount and visibility of promotions. That means cutting unique deals with manufacturers. They can also engage in more regimen-based or thematic promotions. To understand which media types most influence frequent grocery shoppers check out their profile on AudienceSCAN, available at AdMall from SalesFuel.com.