Shining a light on batteries

Grocers do not have to offer the lowest price on batteries if they promote them properly.

Shoppers cannot buy what they cannot see, no matter how discounted the product. That holds especially true for an impulse category such as batteries. Battery makers across the board say that for retailers—particularly grocers—to get the most out of the category, first and foremost the products have to be visible.

“Winning retailers embrace the fact that display visibility and multiple points of disruption in-store, not deep price promotion, are the keys to driving growth in this impulse category,” says Bob DiGrigoli, category sales manager for Duracell, the Bethel, Conn.-based brand of Cincinnati-based Procter & Gamble.

Obvious areas to display batteries include a full battery portfolio in the front of the store along with an extensive battery offering at checkout. Industry observers say opportunities also exist in less likely areas. Some suggest spreading inventory across the high-traffic areas with logical adjacencies second.

For food retailers, these adjacencies include pharmacy for hearing aid and medical device batteries, seasonal, the baby aisle and hardware/general merchandise. Clip strips of batteries throughout the store have also proven effective. “We’ve seen successful retailers use this tactic to grow the category, especially when they use signpost battery brands like Duracell,” says DiGrigoli.

Determining how and where to display batteries can often be difficult for retailers and many manufacturers offer assistance. Through its Shopper Based Solutions (SBS) strategy, Energizer places a premium on finding the right location for products while organizing a shelf that is compelling to the consumer, say company officials.

According to Lou Martire, vice president of trade development for St. Louis-based Energizer, the initiative is designed to help shoppers make the right battery choice at the shelf, no matter the use. In addition to providing retailers with a recommended product mix, in-store location shelf organization and category messaging, Energizer has a dedicated shopper marketing team that is available to help retailers implement these initiatives in their stores.

“We do not rely on instinct and intuition; rather we do a great deal of consumer research that tells us what works,” says Martire. “This initiative has been proven to improve the in-store experience for shoppers and has driven conversion, trade-up and multiple purchases. Most importantly, we have found that retailers adopting the SBS strategy enjoy above average sales growth.”

Many grocers would welcome a strategy that provides above average sales growth. According to industry estimates while the entire battery market is up about 1.7% for the year, grocery sales, though still up from last year by 0.7%, are not keeping pace with the industry. Some observers say a number of factors account for the lag in grocery sales,  including the stocking of limited brands and the high-low nature of the business.

“In the grocery channel, 46% of battery sales are done on a reduced promoted price,” says Aaron Halvorson, senior director of category development and business insights for Rayovac North America, based in Madison, Wis. “This is 30% higher than the all outlet average of 34% of sales done on promotion. Grocery has an opportunity to offer an everyday low price value.”

With direct-to-consumer communication, Halvorson says Rayovac can help retailers construct programs to communicate offers, assortments and deals that target shoppers and drive incremental sales.

Pricing strategies
Supermarkets do not necessarily have to offer the lowest price to do well with batteries, many experts say. “Batteries are an impulse item,” says Duracell’s DiGrigoli. “When displays trigger shoppers to buy they will buy. Retailers don’t need to give away dollars unnecessarily.” Because batteries are an impulse item, he says retailers need to fight the urge to put the battery shelf in the electronics departments—where they seem to logically belong. “Since visibility is the main driver of sales, these lower-traffic departments are not ideal for the main battery section. Another category-dilutive tactic is offering large-count packs. Since it is an impulse item, shoppers aren’t necessarily in the stock-up mode. So if the pack is too big, you are leaving dollars on the table and driving the category down.”

Despite the impulse nature, like with most other categories, consumers are still looking for the latest and greatest battery products available. Both Duracell and Energizer will be offering batteries designed to retain power for up to 10 years. This summer Duracell launched its Duralock with Power Preserve Technology. The entire portfolio of Duracell batteries will carry the Duralock Power Preserve guarantee. Energizer is rolling out its Energizer Max with Power Seal technology. Additionally, Energizer Ultimate Lithium batteries are stronger, lasting longer in high-drain devices such as digital cameras, according to Martire.

Also designed for high-drain devices is the Rayovac Advanced High Energy battery. Halvorson says the battery lasts as long as equivalent products on the market at a lower cost. Rayovac has also launched a line of portable power solutions.

“The ‘fan favorite’ on the go charger is a little rechargeable keychain that holds a charge for up to 12 months and provides 45 minutes of extra talk time. The ‘backup charger’ rechargeable lithium ion battery can provide an additional 6 hours of talk time.”

Selling sustainability
Batteries are generally not associated with sustainability, however, LEI Electronics, based in Barrie, Ontario, Canada, is doing its best to change that with its EcoAlkalines batteries brand. Already a landfill safe, Certified Carbon Neutral alkaline battery, EcoAlkalines can now also contribute toward certain LEED (Leadership in Energy and Environmental Design) credits and prerequisites.

“We are seeing that the initiative to go green is really strong,” says Lionel Lalonde, vice president of sales for EcoAlkalines. Lalonde equates the battery category to that of laundry detergent. “As consumers and retailers are becoming more aware of the detrimental environmental impacts of many of our household consumables the demand and necessity for green offerings in this category of products is on the rise.”

As more and more retailers work toward sustainability, they are naturally gaining interest in providing a green battery to consumers, say observers.  Lalonde says EcoAlkalines will soon be available in some major national and international retailers and expects that it is going to take a few retailers to change to green to get others to jump on the bandwagon.
Convincing consumers may take a bit of time as well. Lalonde has watched how other categories introduce green solutions to consumers and intends to do similar with EcoAlkalines.

“[Other categories] didn’t just put product on the shelf,” says Lalonde. “They talked to the quality and pricing, and we meet those two right off the bat. We are equal in quality and better priced. [It is] about understanding what carbon neutral is and understanding why we have a green battery.

“There is a phenomenal green story behind EcoAlkalines and we are proud to be able to share that story. In order for the consumer to understand the green benefits of EcoAlkalines batteries there needs to be a greater awareness and understanding of the importance of green terms such as ‘carbon neutral,’ ‘LEED’ and ‘landfill safe.’ The green movement has had increased momentum recently and we don’t anticipate that it will be too long before those terms are household terms and will be a ‘must-have’ for the informed consumer.”

This entry was posted in 2012 12 Article Archives, Nonfoods for Profit and tagged , , , , , , . Bookmark the permalink.