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Front End Focus Study Identifies Best Practices for Retailers
NORTHBROOK, IL – April 13, 2009 – Dechert-Hampe & Co. (DHC), in collaboration with The Coca-Cola Company, Mars Snack US, Time Warner Retail and the Wm. Wrigley Co., has identified a number of best practices for retailers seeking to maximize their checkstand sales and profits through the Front-End Focus study conducted by DHC.
The study’s aim is to help retailers maximize the performance of the valuable space at the check-stand. The latest phase of the project was focused on identifying those front-end merchandising practices in supermarkets which boost sales through an enhanced shopping experience.
DHC conducted the study in partnership with six retail companies that collectively operate more than 3200 stores and account for 12% of grocery volume in the United States. The research included store audits, shopper interviews, analysis of frequent shopper card data and point of sale transactions.
Key findings included:
- An average 16.6% of shoppers (one in six) make incremental purchases at checkout, with the rate of conversion varying by lane type. Regular lanes, where customers buy more and spend more time waiting in line, tend to have the highest incremental purchases: 20.5% of shoppers in regular lanes vs. 13.2% of shoppers in express lanes, with self-scan lanes yielding only 10%.
- Only a handful of power categories – magazines, confectionery and beverages – account for the majority (72%) of check-stand sales (magazines 25% of sales; candy, gum and mints 34%; and beverages 13%)
- Most shoppers tend not to switch lanes or shop across lanes, so a missing item can mean lost sales.
The study revealed a number of best practices that retailers can employ to help increase checkstand sales and profits – top-performing retailers generated 36% more sales at checkout than average stores and 65% more sales than poor-performing stores. Best practices include:
- Identify key lanes that account for the bulk of transactions and stock power categories on those lanes
- Confectionary should be carried on all lanes, including express, merchandized on both sides of the customer
- Maximize the presence of magazines at the front end, putting them on the end-caps, as well as in the lane, giving customers additional opportunities to buy
- Top-selling magazine titles should be in all lanes
- Make beverage coolers readily and easily available, include carbonated beverages, water and non-carbonated drinks
- Devote only a moderate amount of space to general merchandise and health and beauty care products – these item purchases are needs-driven and customers can find them elsewhere in the store.
For more information on the Front-End Focus study and findings: Visit website
Dechert-Hampe Consulting (DHC) is a sales and marketing consulting firm founded over 50 years ago, offering solutions that result in tangible change, measurable results, a competitive advantage and an enhanced return on sales and marketing investments. DHC has offices located in Orange County, CA, Chicago, IL and Fairfield County, CT. To find out more please visit: www.dechert-hampe.com