Clearing up the chaos and having an efficient assortment are just some ways to boost candy sales.
By Timothy LeBel
In these uncertain economic times, consumers are looking to the simple things in life to bring them joy, like a bag of M&M’S. Chocolate category sales are up 5.3% in the grocery channel in the latest 52 weeks ended Oct. 9, according to data from Chicago-based SymphonyIRI Group.
To help maintain this momentum, Mars Chocolate North America conducted a marketplace analysis to identify best practices in the grocery candy aisle. The Mars team considered five different studies that examined a variety of metrics—from shopper behavior and best practices in shelving to category, brand and segment profitability.
The resulting insights unveil the P.O.W.E.R. practices that maximize category velocities:
•Pull shoppers into the aisle by leading with confectionery
•Optimize segment flow and space
•Way-find with power brands and the shopper decision tree (SDT)
•Efficient Assortment Analysis
Pull shoppers into the aisle by leading with confectionery
Confections are highly impulse-driven in the grocery channel, with 66% of brand decisions being made in the store. (SmartRevenue, 2008). Retailers that lead the aisle with confectionery sell 6% more than average.
Retailers must create a flow for the consumer to easily shop the category and make a purchase. To do this, they need to stock the correct items in the candy aisle using merchandising tools that entice consumers to pick up incremental candy items.
Optimize segment flow and space
The ideal store set for confectionery will anchor the ends of the section with premium chocolate and gum/mints. Research shows that most retailers should reduce space given to premium chocolate and increase space for everyday premium chocolate, everyday chocolate and confections.
The center of the confectionery set should include everyday chocolate and candy confections, which are the highest traffic categories, to help draw shoppers in. Regular chocolate should get about half of the confectionery space.
In addition, retailers should shelve brands vertically to realize a 10% higher indexed confectionery velocity.
Way-find with power brands and the shopper decision tree (SDT)
Retailers must think like consumers. The confectionery SDT varies based on whether the purchase is for immediate or future consumption.
According to research, , consumers prefer shelves that are neat and well-kept, aisles that are organized and fun to shop and directional signage. In an average store, the confectionery assortment is often in chaos with more than 120 brands, more than 650 items, with multiple package types.
To simplify shopper navigation, retailers should build the set around the “power brands” in each sub-category. Power brands have broad appeal and high volume, and they serve as segment signposts. Other brands play a supporting role, but retailers should ensure adequate representation from the top 15 power brands, which include Dove, M&M’S and Snickers brands in the chocolate segment and Starburst and Life Savers brands in confections, as well as leading brands from other manufacturers.
Efficient assortment analysis
Creating an optimal assortment is key. Grocers should continuously review their assortments to ensure they include the latest innovations.
New flavor combinations are gaining in popularity. A recent study found that consumers buy their favorite chocolate products 75% of the time and they buy something for variety 25% of the time. (Mars Line Optimization Study, May 2010, SymphonyIRI Group FDMxC for the 52 weeks ended July 19).
Another trend is the emergence of the hand-to-mouth segment. In this segment, the stand-up pouch (SUP) format offers a good value and it is resealable for freshness, portability, portion control and share-ability.
Combining these two trends, Mars is launching three lines in 2012: M&M’S brand candies in an 8-ounce SUP in three flavors: milk chocolate, mint dark chocolate and raspberry dark chocolate; Dove Milk Chocolate Covered Raisins & Peanuts; and M&M’S Snack Mix, available in three sweet and salty varieties.
By following the Mars P.O.W.E.R. strategies, grocery retailers can maximize category sales and profits while meeting shoppers’ needs. The key is to increase category velocity, which can be done using these tools.
Timothy LeBel is vice president of sales-grocery/value/military for Mars Chocolate North America.