Nonfoods Talk: Phoning it in at the front-end

Seth_MendelsonConsumers seem to be more intent on surfing the Internet than perusing the front end. How does this impact the sales of products at the checkout?

Damn those smartphones.

Not only are they taking over the universe, they are now intruding on different facets of life that are having a direct impact on commerce—as in business at the grocery store.

Take the front end, for example. Back in the good old days—say pre-1995—consumers had no choice but to stand, wait and stare at their surroundings as other shoppers checked out of the store. It was the heyday of impulse purchases at the front end. With little else to do but wait, many shoppers were quick to pick up a magazine or two and, after perusing them, often placed the periodicals into the shopping basket. A couple of candy bars, mints and other goodies, such as film or batteries, often found their way into a shopping cart at the front end.

That has all changed and a lot of the blame has to go to smartphones. Today, consumers no longer idly stand and wait their turn at the front end. Now, they stare at the smartphones and wait for the next phone call or text message to come through. Some, I dare say, may even be on the Internet checking sports scores or news items while they wait.

Eyes on the smartphone mean fewer eyes on the various products at the front end. Nowhere has this impacted products more than in the magazine category, which has long relied on catching the consumer’s attention with catchy cover art and headlines. Now, instead of staring at a steamy cover featuring Kim Kardashian or Lindsay Lohan or a regal shot of Princess Kate in her latest high fashion outfit, the shopper is often head down looking at the face of their phone, waiting for the next super-important text or email. What a waste of a good cover.

Retailers, of course, need to fight back. First, they must ensure that the wait period at any checkout is relatively brief, giving the shopper less time to pull the smartphone from their pocketbook or pocket. Second, they need to grab the consumer’s attention with displays that will make them take notice, get them interested and get them to purchase the product being displayed at the front end.

Speaking of smartphones, a number of retailers have reported an uptick in sales of phone accessories, especially with licensed protective covers that sell for under $30 and are great impulse purchases. My younger son, who is somehow a Chicago White Sox fan living in the metro New York area, found a White Sox cover for his smartphone at an area retailer. The purchase was made and, I am told, at a very good margin for the  retailer.

Carrying a selective array of products in the phone accessories segment makes a lot of sense for grocery retailers. Besides the strong margins, these items have very high impulse sales potential and cater to a younger, hipper audience.

What is going on with the lighting category? More importantly, can supermarkets cash in on this trend? With new technology such as LED lighting allowing for light bulbs that last an advertised 20 years or more, suppliers are increasing the price-points of bulbs to more than $20 for a single bulb.

Some retailers say they are not sure how to handle the new technology, with many worried that the higher price-points and fewer turns could hurt their profits. Suppliers argue that the new technology will reduce consumer costs—for the bulb and for the price of electricity. They also say that it will take years for consumers to stock up on the new bulbs and that will provide a windfall for retailers who embrace the products.

“It will be 2019 or 2020 before consumers are fully stocked with these items,” says one manufacturer. “By that time we would hope to have a new format to re-start the process.”
They add that supermarket retailers should not be worried about the cost of these new bulbs. As long as consumers are shown the benefits and savings, lighting manufacturers are confident that they will purchase these items at any store that has a significant selection of product at competitive price-points. 

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