SCOTTSDALE, Ariz. -- Seasonal products and promotions represent the greatest opportunities for supermarkets in their ongoing battles with other classes of trade, said David T. McConnell Jr., president and chief executive officer of the General Merchandise Distributors Council, Colorado Springs, Colo.
GMDC will gather for its annual GM Marketing Conference later this week. It will be a remarkable event where, for the first time, the trade group will pay travel expenses for the retailer and wholesaler attendees. McConnell spoke to SN prior to the meeting about the potential for seasonal goods and the state of general merchandise in supermarkets.
"Seasonal creates a splash. It creates excitement. It creates a distinctive look so that the store is a little bit different every time the customer goes in," McConnell said.
"The customer shouldn't have to go to the supercenter or the mass merchandiser for seasonal offerings, and I don't mean just the basics. The most exciting seasonal sets in the food store are bringing in new products, such as lawn mowers. Why not bring television sets and DVD players in at Christmas, and work with some of the entertainment suppliers to create some promotional programs tied around DVDs and CDs? There are a lot of opportunities here," he said.
These kinds of promotions are easier for retailers with bigger stores, but not beyond the reach of the smaller operator, he said. "Obviously, they have to be more selective, but the biggest asset they have is their wholesaler, whether it is a wholesale grocer or a service merchandiser."
With today's Memorial Day holiday and the upcoming Fourth of July, retailers are in a position to take advantage of the patriotic mood of the nation by offering some new, distinctive products, he said.
Other spring products can go beyond the usual selection of hoses, sprayers and plastic stack chairs, he said. Supermarket customers will buy higher-end grills, coolers and patio sets "if they are presented in an attractive fashion," he said.
"Be creative in the products and programs you are offering. Don't be afraid to try new and different things," he said.
There are opportunities for supermarkets in entertainment hardware and software if they can get past the loss-prevention issues, McConnell said. "Electronics is an area where many, many food stores can do a much better job than they realize because their customers will accept it," he said.
The key to loss prevention is source-tagging, but the industry is at a standoff over two source-tagging technologies -- with no compromise in sight, he noted. But not far in the future is the electronic product code identification system being developed and tested by the Massachusetts Institute of Technology's Auto ID-Center in Cambridge, Mass. "That is where we are going to see the biggest gains in terms of electronic article surveillance. Then entertainment will become a much bigger player in the process," McConnell said.
That also will help retailers reduce shrink in other promising categories, such as home office, he said. "Home office is another area where there are some high-ticket items on which we are not optimizing opportunities. Why can't a supermarket sell a $150 computer printer? I don't see a lot of people making the effort to do so," he said.
As computers become a more essential part of students' equipment, home office products are playing a bigger role in the back-to-school season, he said. "Back-to-school goes beyond filler paper, pencils and notebooks. It is now a home office issue. Kids are using the home PC to do their homework, and they are much more electronically oriented than their parents were at the same age. If you are not taking the chance and extending your product offering to some of those key categories, I think you are missing the boat," he said.
Overall, the general merchandise market is still soft, McConnell said. Last year had been tough prior to Sept. 11, although some had reported that it had started to rebound. "But following 9/11, business was soft and it has continued to be soft. Customers are still tight-fisted and reluctant to spend money," he said.
Even so, supermarkets could be doing a better job in selling some staple categories like light bulbs, batteries and film. "We just aren't thought of as a destination for lighting products by consumers. They have moved on, and my observation is that they are going to the Home Depots of the world to stock up, and we have become a convenience store for those types of items," he said.
The key, as in all departments, is the support of top management. "There is a lot of pressure on the division managers for general merchandise, pharmacy, and health and beauty care to produce more for the bottom line, and it seems like we are being squeezed more and more for space. There needs to be an acknowledgment that these products need to be a part of the center store mix," he said.