The potential for profits exists in nonfoods categories, as long as they are the right categories.
Frankly, the list has grown long. More retailers are getting involved with nonfoods and some are going to great lengths to make a difference with the category. For those retail officials who oversee the nonfoods segment at grocery stores, they may want to implement some new merchandising techniques to build awareness of the category.
1) There is definitely a growing demand among consumers for beauty products (read: cosmetics, hair care items) that are made from natural resources. While some drug stores and natural supermarkets have jumped on this trend, most traditional grocery stores have veered away from it, convinced that the higher price points will drive many shoppers away or the complexities of natural items is too much for the food store.
It does not have to be that way. In more affluent areas, and even in middle class neighborhoods, retailers can do fairly well with an all-natural selection of products, providing they back the section with the right merchandising support in terms of educational materials in-aisle. Perhaps, even hiring a specialist within the department to answer questions and build awareness can help.
2)As more grocery stores employ dieticians to help consumers navigate food aisles and purchase the right products for their families, perhaps it is time that retailers get some expertise in the nonfood aisles, especially with the aforementioned cosmetics section, the over-the-counter medication area and vitamins.
Look at the drug store chains. They are going to great lengths to differentiate themselves from the competition with various departments. Supermarkets need to do the same thing, at least where possible, to get the consumer to say that they want to visit the nonfoods section instead of just happening to stumble upon the section while doing their food shopping. Of course, that also means having the right mix of products, great signage and placing the section within a popular spot in the store.
I also think that many suppliers are very willing to help, as long as they get something from this as well. My guess is that with the number of consumers walking through the doors of a typical supermarket, many vendors would welcome the opportunity to partner with a grocer to get a step up on the competition.
3)Stop trying to be everything to everyone. Supermarket retailers need to pick the nonfoods departments they want to emphasize and then make a statement with them. For example, the pet category needs a healthy assortment of product in food and supplies and they need to be merchandised together and given the proper in-store support. The same is true for cough/cold, feminine hygiene, lighting products, batteries and a host of other categories. The bottom line: if you cannot make a statement with a category, do not get involved with it.
Speaking of lighting products, a friend of mine went to a local supermarket to get some incandescent bulbs. He was shocked to find out that the store no longer carries those types of bulbs and more shocked when I told him that suppliers no longer make them. Despite all the publicity around the dramatic changes in lighting products, many consumers still do not know that government regulations and new technologies have made many products obsolete and that new more energy-efficient and much more expensive items have taken their place.
The onus is on the suppliers to do all they can to build awareness with consumers and retailers alike. The lighting category is going through a big change—lets fill people in on what is happening.