ORLANDO, Fla. -- It's not enough for retailers just to merchandise confectionery. They have to be proficient at specialized merchandising to tap into sales growth from impulse buying.
That was the message hammered home by Joe Sireno, director of sales communication, merchandising and sales services for Nabisco Food Group, Parsippany, N.J., who spoke at the American Wholesale Marketers Association winter convention here.
"You really have to be good at this game. If you get it right and do it well, merchandising can help you survive and thrive," he said.
Supermarkets and convenience stores can be gold mines for candy sales, and for the same reason -- the opportunity to attract impulse buys, Sireno said in an interview after his presentation.
"If retailers take a new approach, they can really turn some new dollars" with the candy category by grabbing more aggressively for the impulse purchase, he said.
Illustrating the strong link already present between stores and impulse volume, Sireno said 92% of convenience store consumers purchase confections; of that business, 85% is impulse sales. Another indication of the importance of impulse opportunities, he said, is that in supermarkets only 25% of total candy sales are generated from the confection aisle; the other 75% of purchase decisions are made off-shelf, at impulse locations.
Sireno called the front end a "sacred area" for encouraging profitable impulse buying. "There's tremendous profit potential in this area, because everyone has to go through the front checkouts. Candy is not promo-dependent, as long as it's at the front end."
According to Sireno, 26% of front-end dollars come from confections,
and 32% of front-end profits come from confections. What's more, 70% of front-end purchase decisions are made on impulse. He also said that 36% of shoppers browse the lanes, and 17% buy for children that are accompanying them.
Sireno also said retailers have to keep the best-selling items at every checkout to reap the greatest benefit from the category.
Displays such as peg boards and spinner racks that hold bags are going to play a more important role in attracting off-shelf sales in 1994, according to Sireno. A total of "45% of nonchocolate sales are in bags," he added.
Cross-merchandising offers additional possibilities for impulse sales, he said. Sireno suggested starting with the coffee bar area, for chains that have one, because it attracts a steady customer, and "you don't want that area to always be the same."
Mints, gums, chocolates, cookie bars are good cross-merchandising possibilities for a coffee bar, he said, adding that the selection should be changed at least every two weeks.
Retailers also can take a tip from McDonald's and other fast-food chains by offering meal deals in the deli and sandwich case that include a candy bar or salty snack item with each sandwich.
Sireno also had suggestions for merchandising candy gondolas, which are increasingly becoming a focus for category management. He emphasized that the term "category management" still means merchandising. "There's just more information at our disposal. The planogram is really a must, especially in the gondola. Every product should have a permanent place," he said.
One of the key aspects of better-managed gondola candy merchandising is getting rid of items that don't work, because they cost the retailer money instead of making money.
"You want to put the best-selling items in the middle of the aisle. And make sure there's always a section for new items; it speaks to your [store's] personality, which means a great deal."
New items are very profitable, Sireno added. He noted that 354 new candy items were introduced in 1993.
