Grocers who offer the proper mix at the proper price points can do well in the consumer electronics category.
By Craig Levitt
Clearly, consumers aren’t flocking to the local supermarket in search of iPads or 3D televisions. That does not mean there isn’t a market for consumer electronics in the grocery channel. Categories such as blank media and cell phone and iPod/iPhone-related accessories, to name a few, can provide food retailers with the opportunity to make pretty healthy margins.
In the days of tape decks and VCRs, grocery stores fared quite well selling blank media. Today, industry observers say that with blank media sales across all channels on the decline, grocery should be prepared to capitalize.
“Because of this decline many traditional consumer electronics retailers are reducing their shelf space, or in some cases completely eliminating their blank media assortment,” says Cheryl Severini, senior marketing manager for Woodland Park, N.J.-based Maxell Corp. of America. “This is a great opportunity for grocery to increase sales and grow retail dollars.”
Since grocery is not traditionally a destination for blank media, Severini says that if grocers are to do well with the category it is important to keep product visible and within easy access to capitalize on the impulse purchase. She also says that at grocery, smaller pack sizes are much more popular than larger sizes, adding that “grab-and-go” packs such as disc packs with no jewel cases are becoming more popular.
“We have been highly successful with our smaller blister card packs, which range from three-pack to five-pack configurations,” says Severini. “Maxell also offers shelf displays, floor displays, wing racks and clip strips, providing a solution to any space issues.”
In addition to blank media, Maxell offers a wide assortment of headphones, audio/video care and maintenance, disc storage, computer peripherals, flash media and hard drives. While blank media generally sells best at price points $9.99 and under, observers say the sweet spot for the category at grocery can range up to about $24.99.
Offering an array of products in the $4.99 to $24.99 range is Mizco International. According to Art Serrano, vice president of sales for the Avenel, N.J.-based company, those products include ear buds, phone chargers, flash drives, mice and mouse pads, and memory cards, among others.
“It becomes easier to sell electronics in the supermarket as the complexity of the sale goes down,” says Serrano. “Everybody knows what a cell phone or iPod is, so you don’t have to go to Best Buy to pick up a set of ear buds or a phone charger. That’s where we are being successful these days. We are selling products that are very high-turn, high-demand items. The household penetration [on a flash drive or cell phone charger] is almost 100%.”
Serrano agrees that visibility is important when selling the consumer electronics category at grocery and says that while point-of-purchase materials can be helpful, they aren’t always necessary. More important than point-of-purchase materials, he says, is the need to be priced correctly and to be in the proper location within the store. Serrano says “without a doubt,” the best place for retailers to merchandise consumer electronics is within or adjacent to a battery end cap. “We do very well on one side of that end cap,” he says.
Although grocery doesn’t sell high-end electronics that does not mean the channel should ignore the latest in technological trends. Observers say that those grocers that keep up-to-date with the latest and greatest electronics are poised to pounce when accessories for those products are introduced. For example, Mizco will soon be introducing accessories related to GPS devices, such as chargers and mounts, and accessories for the iPad, such as carrying cases.
“As GPS devices items become more affordable more households are getting into them, so we are getting into the accessories related to them,” says Serrano. “With the iPad, even though it was just recently launched, there is a big void there for accessories, so there is an opportunity to jump on it.”