Help Your Grocery Clients Promote The Items That Boost The Bottom Line

by | 3 minute read

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.

The Opportunity

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.

The Challenge

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.

The Solution

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 Sales​Fu​el​.com.

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-own­er of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.