To build the category, grocers need to broaden their offerings and increase visibility to capture impulse sales.
By Carol Radice
Battery sales showed signs of life this fall and industry observers are optimistic that the fourth quarter, which is traditionally the category’s strongest, will help end the year on a high note. That comes as much-needed good news considering some of the category’s recent challenges, including changes in consumers’ battery purchases and the increased focus on lower-tier and private label batteries. This prompted national brand suppliers to aggressively respond by offering free batteries on-pack and lowering price-points, which took its toll on sales.For their part, manufacturers are looking beyond batteries for ways to build sales in the redefined “power” category.
“The face of the category has changed quite dramatically in recent times,” says Lou Martire, vice president of trade development for St. Louis-based Energizer. Martire explains that as the types of devices and their power requirements evolve, companies such as Energizer have responded by developing a broader and more technologically advanced portfolio. “Today, the category is more aptly labeled the ‘power category’ because it encompasses more than just round cell batteries. That was enough to satisfy our needs a generation ago, but today it is simply not enough,” says Martire.He anticipates that consumers will be especially responsive to performance improvements in longer-lasting and renewable choices that will keep them powered for longer periods.
Because today’s consumer relies on a wide range of electronic devices, the qualities and features they look for vary as well. With devices such as smartphones, for instance, convenience is king. To address this need, Energizer has introduced a selection of portable power products to satisfy demand for on-the-go and cord-free charging. The new items include Energizer Energi-to-Go external power packs, the Energizer Inductive Charger and Universal USB Chargers for homes and vehicles.
Observers say that other devices driving battery sales include wireless video game controllers, toys, LED flashlights and remote controls for TV, DVD, and Blu-ray.
The need for specialty batteries, particularly those used in medical devices, remains strong as well, notes Aaron Halvorson, senior director of category development and business insights for Rayovac North America, based in Madison, Wis. “With an aging population, lower-cost hearing aids, and greater access to hearing professionals, hearing aid battery sales continue to experience healthy growth,” says Halvorson.
Interest in larger packs of alkaline batteries is also strong. As Halvorson points out, currently one-third of alkaline battery sales stem from large packs. He notes that as quality has increased, so too has consumers’ interest in rechargeable batteries. Halvorson believes as multiple price, value, and quality tiers become more available, adoption of rechargeables will continue. “Regardless of the specific battery segment, the role of Rayovac is to provide the same power and performance as other top brands, but at a value to the consumer,” he says.
Another segment that is showing promise is alternative batteries that are environmentally friendly. Barrie, Ontario, Canada-based LEI Electronics produces the Eco Alkaline line of batteries, which company officials say is certified carbon-neutral. These landfill-safe batteries have no added mercury, lead or cadmium and contain 98% recyclable materials. According to Lionel Lalonde, vice president of sales, in addition to being earth friendly, the performance of their batteries rivals national leading alkaline battery brands. “Increasingly people are aware of the impact traditional alkalines and rechargeable batteries have on the environment,” says Lalonde. “At the same time, consumers look for value, but insist on having high-quality batteries to use in today’s demanding high-drain products.”
One segment that did experience a dip this year was lithium batteries. Often used to power high-drain devices, experts say the need for lithium batteries has stalled, in part due to the drop in the number of hand-held cameras, CD players and handheld GPS units being purchased, all functions the average smartphone can now handle.
Create a buzz
While battery segments fall in and out of favor depending on changes in technology, it remains a true impulse category, says Volker Kuhn, general manager for Duracell North America, based in Bethel, Conn. Duracell is part of Cincinnati-based Procter & Gamble. With that in mind, Kuhn points out that retailers should avoid relying on deep price promotion and instead focus on two strategic elements—display visibility and multiple placement points in the store. “One of the biggest mistakes retailers make is not having a well-rounded battery set at the front of the store in a high-traffic area,” says Kuhn.
Retailers should not overlook the checkout when promoting batteries, say observers. “Featuring premium brands in this location is one way grocers can compete and overcome the fact that they don’t have as many adjacency opportunities as mass retailers,” says Kuhn. What grocers do have are plenty of cross-merchandising opportunities, including pharmacy for hearing aid and medical device batteries, baby, seasonal and general merchandise, he says.
Christmas certainly drives battery sales, but observers say retailers should also prepare for sales surges during severe weather events. Indeed, many retailers in the Northeast were out of C- and D-cell batteries leading up to Hurricane Irene. “Preventing lost sales is key. It’s worth taking more inventory risk to avoid the out of stocks,” says Kuhn.
Springtime is also a popular battery buying time. “During this time, high-traffic events such as Easter, Mother’s Day and Father’s Day, as well as spring cleaning time, all present opportunities for retailers,” he says.
While supermarkets may not be considered a destination for batteries in the same way mass, DIY or club channels are, Halvorson points out that there are many things grocers can do to better capture consumers’ attention in the store. He says at minimum retailers should be placing batteries in intuitive locations such as the front of store, checkout, other high foot-traffic areas, and near toys or other electronics. “Following this, retailers need to shout out the value by providing pack sizes that offer a value—either in per-battery or in per-pack pricing,” says Halvorson.
Next, he says, it is important to make sure to have on hand the cell sizes consumers needs, especially AA, AAA, C, D, and 9V. Consumers are seeking a price/value benefit, which as Halvorson notes, can mean a number of things from focusing on performance and quality to the pack size. Brand is the final tier, yet critical in the purchasing decision tree, says Halvorson, adding that battery consumers typically will only purchase from a certain set of brands. “With this in mind, give consumers a choice by offering a premium brand such as Duracell or Energizer and a value brand like Rayovac,” he says. The price of private label batteries may be appealing, but Halvorson cautions that consumers’ quality perceptions are still fairly low, making it a risky addition at this point.
According to experts, the popularity of smartphones and tablets will be one of the driving forces in the category in the coming years. In fact, Energizer’s Universal USB Wall and Car Chargers are already proving to be popular. As Martire explains, this product transforms any outlet into a charging station, providing convenient charging of multiple devices from any standard wall outlet or from a vehicle’s DC outlet. “They’re compact, ideal for travel and are available at two power levels: one for devices up to five watts such smartphones and digital cameras and one for the 10-watt power needs of the iPad, iPhone and iPod,” he says.
Although Energizer’s USB Chargers work with the USB cables that already come with devices, given that consumers also like to keep a cable at work or in the car, Energizer is also offering charging cables: Energizer’s Micro and Mini USB Charging Cables are compatible with most USB-powered devices, and the Energizer Dock Connector USB Cable is made for the iPad, iPhone and iPod. Energizer has packaged the cables and chargers separately so that consumers can buy only what they need and avoid duplicate purchases. These accessories range in price from $9.99 to $24.99.
Energizer also continues to show its commitment to inductive charging technology with an expanded line of products that are enabled with Qi, which observers say is gaining momentum as the universal charging standard. Energizer, which has a full suite of Qi-certified products, is now offering a single-zone version of the Energizer Inductive Charger for convenient, cord-free charging. Company officials say this model features a slim-line rectangle design with one charging area that is perfect for wireless enthusiasts who prefer to have multiple charging stations or have smaller surface spaces. The company also recently introduced a Qi sleeve for the popular iPhone. To help shoppers quickly and easily confirm device compatibility, Energizer is placing a QR code on its packaging that consumers can scan for instant access to a list of Qi-enabled devices.
Looking to change the perception that batteries are a commodity and that all batteries and power solutions are created equal, Duracell officials say retailers can expect to see continued meaningful innovation from the company going forward. According to Kuhn, Duracell’s Ultra product is their longest-lasting all-purpose battery and the only one with a power indication strip. In addition, The company’s 15-minute charger is the fastest they have ever offered. In addition, Duracell recently formed a partnership with Powermat to offer more wireless recharging personal power solutions. “Our goal is to develop the strongest brand possible and drive consumer demand all year long, during hurricanes and especially during the holidays, by creating products based on consumer-inspired innovation,” he says.
With so many retail channels competing for limited consumer dollars, one way grocers can better compete and build sales in the category is by offering consumers alternative choices, notes Lalonde. “Eco batteries offer a point of differentiation whereas offering yet another traditional battery brand simply serves to cannibalize sales. Our Eco Alkaline batteries have been specially formulated for extended life and are the perfect eco-friendly choice for electronic devices like flashlights, alarm clocks and radio-controlled models,” he says.