Sweets and Snacks World, Confectionery Production
20 December 2013
Robert Engström, director of operations for bulk merchandising at Akriform Plast considers strategies to help retailers and suppliers maximise confectionery sales.
What is your strategy to remain relevant to the confectionery customer of tomorrow? Despite difficult economic conditions, the global retail industry as a whole has continued to grow. Maximising sales is the driving force to continued growth. Rather than simply offering the lowest price point for confectionery, supermarkets and convenience stores must now make the shopping experience more stimulating to drive sales.
The how, what, when, where and why of maximising sales is as varied as the number of retailers. It is crucial to understand where the intersection lies between confectionery as an impulse purchase, current trends, how to reach the customer and what to offer the customer.
The collision of the physical and virtual worlds is fundamentally changing purchasing behaviours. In The Future of Retail, Deloitte points out that: “The retail paradigm has shifted from a single connection point with customers to a multi-pronged approach that crosses both physical and digital channels.” Effective internal and external digital initiatives are becoming a strong competitive differentiator. Leveraging the appropriate technologies to enhance the customer experience in both the physical store and the digital world is key.
The confectionery industry lends itself to endless possibilities in terms of stimulating and viral digital campaigns. Collaboration between retailers and confectionery suppliers to implement strong digital programmes using mobile devices, social media, online purchasing, and so on, creates a strong competitive advantage.
Likewise, an agile and innovative internal information technology organisation is crucial to support business strategies. Do tools exist to cut costs, streamline processes, collect data, and so on? The development of new technologies is helping supermarkets, convenience stores and confectionery suppliers to reduce labour through automation, improve margins with strategy-based pricing, reduce cost through web-based solutions and improve category management. A clear and adaptive digital plan will be critical to success in the future.
Merchandising displays should increase impulse shopping, optimise retail space and/or reduce operational costs. The Global Association for Marketing at Retail reports that in 2012, more than 75 per cent of purchasing decisions were made in store. So how do you transform the physical space into a compelling customer experience instead of just a point of transaction while adhering to these guidelines?
Lighting, fixtures and colourful high-impact graphics all have a major role in stimulating the customer to encourage impulse shopping. The drama of lighting, fixtures and graphics is the difference between a display that makes you yawn or one that drives you to stop and look. Regularly changing the graphics and colour arrangement to feature discounted or seasonal confectionery creates a unique experience when the customer walks through the door. However, it is important to keep it simple. The goal is to attract attention, not overwhelm and confuse.
Creating a focal point and balance will help to ensure your merchandising does not overwhelm the customer. Methodically plan and adjust your merchandising so you purposefully direct the customer’s eye. Place complementary products in close proximity to promote multiple sales. Your merchandising should invoke a particular mood or desire. A lack of balance creates a sense of instability and anxiousness. Disorganised, messy environments will have a negative impact on merchandising efforts. All aspects of merchandising are enhanced when you keep your store clean.
Vertical displays can more easily catch the customer’s eye and optimise retail space. Displays that are slightly altered in shape and/or size from adjacent shelving improve product visibility. For global companies, it is important to consider the direction in which the customer reads. Is your merchandising display effective for those reading left to right or vice versa? Minimise stock build-up to keep costs low, but maintain sufficient stock of popular products. Consider merchandising displays that are both impactful and functional. Displays that are easily assembled, maintained and customisable reduce operational cost.
Effective merchandising builds excitement, educates consumers and drives product awareness. The store layout, design, shelf management, service, product range and cleanliness are all important factors to consider.
Pick and Mix
Bulk candy, which is commonly referred to as Pick & Mix candy is gaining popularity across the globe. Pick & Mix is the concept of commercially dispensing multiple products in one merchandising display and allowing a customer to choose a mixed assortment based on their needs and wants. The concept is similar to bulk retailing, although Pick & Mix customers traditionally purchase one container (bag or cup) of mixed products for one price.
“The biggest misconception about introducing bulk candy to the confectionery aisle is that it will harm packaged candy sales,” explains Jacob Yusuf, managing director, Candy People. “We have seen the exact opposite,” he adds. “Bulk candy is a complementary item. It provides a vibrancy of colours and activity, attracting the impulse customer to the candy aisle. The customer can pick and mix their own unique assortment and portion, and while they are at it the customer picks up their favourite packaged candy bar too.”
Pick & Mix bulk candy provides several benefits: the freedom to choose one’s own assortment, portion control, share-ability and reduced environmental impact. These characteristics are on-trend with the growing demand for variety and convenience from the more diverse, educated, health and environmentally conscious consumer of today.
Consumer’s taste buds are forever evolving and this holds especially true in the confectionery category. It pays for retailers to keep on top of the newest flavour sensations. Bulk candy allows the retailer to easily rotate products as taste trends evolve. Customers do not have to choose between sweet, salty or savoury varieties. Pick & Mix bulk candy allows the customer to choose all these varieties in one unique assortment, building customer loyalty. Similarly, options for ethnic flavours, local favourites, dietary options, and so on can easily be incorporated into the bulk selection.
Taking advantage of innovative digital channels, impactful merchandising and the bulk candy product category can help supermarkets and convenience stores edge past the competition and maximise sales. An integrated and evolving strategy that aligns the virtual world, physical space and product mix can be the path to address not only the needs of customers today, but also to meet the expectations of tomorrow’s customer.¨