Impulse Byes: Study finds most checkstands are letting sales walk away.
Here’s the figure, in case you haven’t seen it in a while: 70 percent of brand decisions are made at the point of purchase.
Here’s one you may not have heard yet: Nearly 46 percent of shoppers make impulse buys in the checkout lane once a week or more, according to Promo Edge, the research arm of P-O-P printer Menasha Corp., Neenah, WI.
To capture more of those lost sales, M&M/Mars and Time Distribution Services outlined best practices for checkout lane management after a joint study with six retail chains (500 total stores). Called “Front-End Focus,” the May study was conducted by Dechert-Hampe & Co., Northbrook, IL. It found that top-performing checkstands have 24 percent higher sales than average checkstands. That translates to more than $1 billion in potential revenue nationally. Checkout lanes account for $4.3 billion in supermarket sales – 1.1 percent of all store sales, but 1.5% of profits. “The checkout lane is the only place in the store that everyone walks through,” says Dechert & Hampe managing director Ray Jones. “The experience there leaves an important impression.”
“In most supermarkets, the front end is managed by committee,” Jones says. “Most grocers couldn’t even tell us how they were doing, because they had no benchmarks, and didn’t aggregate sales by checkstand,” instead tallying them with aisle sales.
M&M/Mars, Hackettstown, NJ, and TDS (Time Warner’s distribution arm), New York City, clearly have an interest in convincing grocers and mass merch chains to manage the front end as a separate department rather than lumping it in with aisle category management. Here’s their advice:
– Focus on major categories: Confectionery, magazines, soft drinks, batteries, and film generate most of the sales and profits. Forget multi-SKU lines like razor blades; they’re not impulse buys, and there are too many varieties to stock upfront.
– Stay stocked: Consumers don’t typically shop across lanes for impulse products. Make sure key items are in every lane.
– Choose items based on purchase frequency, impulse appeal, and image, as well as sales, profits, and productivity.
– Use demographics: Vary product mix by store to suit local shoppers.
