CHECKOUT & IMPULSE SALES
Have you planned
your impulse strategy?
The checkout is prime real estate in any store.
By Laura Durham
By definition, impulse sales are
unplanned. That may be true for
shoppers but for retailers, being
successful at adding one product
to every basket is part of a very
deliberate and planned strategy.
The joys of justification
“Impulse sales are obviously till
purchases but I would go a bit further than
that – when shoppers are walking down the
aisles, there is lots of impulse buying going
on there,” comments Maurice van Bergen,
director of Betech International.
For example, items that are crossmerchandised should make sense – like a
cheese grater alongside your dairy fridge or
salad dressing with your fresh produce. He
says that customers will be more willing
to buy something extra if they can see a
logical connection where the product has
been placed. For example, he’s seen an
increase in sales of Florida’s Natural – a
range of fruit sweets – after placing them
in the dried fruit and even the fresh fruit
sections of the store, rather than in the
sweets aisle as the high fruit content of the
products make them a tasty alternative.
Cross-merchandising done badly will
jar and cause customers to step back and
wonder, “what the hell!” Toothpicks in the
chocolate aisle and gummy sweets next
to gravy powder just doesn’t make sense
– and will be more likely to irritate than
entice customers.
“Irrelevant of the shopper profile or
shopping mission, shoppers typically
disengage from shopping when standing
in the queue at the till, therefore, the need
to disrupt and re-engage with relevant
solutions and POP (point-of-purchase)
communication tailored to the shoppers’
needs is more important than ever,”
comments Nicole Margolius, shopper
marketing manager at Kraft Foods South
Africa.
“Whatever you do, it has to add value,”
Kirkbride says.
Van Bergen suggests that retailers need
to think carefully about the product mix of
an impulse sales strategy. Take microwave
popcorn, for example. It might be an
interesting addition to a checkout – for
those customers who forgot it off the
shopping list – but generally, he says, the
category would be a destination shop.
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A good impulse sales strategy helps to
make the experience worthwhile for
shoppers. Shoppers need to be able to
justify that extra purchase. How successful
you are in displaying, positioning and
promoting those impulse purchases will
translate into how easily shoppers are able
to justify them.
“You know you’re doing impulse sales
well if your customers don’t even realise
your strategy,” comments Janet Kirkbride,
owner of Red Jersey Consulting and
specialist in integrated marketing in the
fast moving consumer goods (FMCG)
industry.
Turn the Valley of Death
into the Promised Land
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SUPERMARKET & RETAILER, JANUARY 2013
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CHECKOUT
& IMPULSE SALES
Collaborate for customers’ sake
“An impulse strategy should not be based
on self-interest but mutual benefit. There
needs to be a good understanding of
consumers’ and shoppers’ usage behaviours
and occasions. Retailers need to understand
what they are trying to do and do it in
a way that adds value to the shopping
experience,” says Kirkbride. For retailers, she
sets out five key objectives:
■ Penetration – add an item into each
basket
■ Frequency – add an item every time
■ Weight – add higher value items
■ Share – add more baskets overall by
differentiating the store in area, drawing
in more shoppers
■ Profit – improve the mix of product sold
For brands, an impulse sales strategy
highlights lesser known or new products
and motivates trial. “It gives exposure
to lines that aren’t well-known or new
products to stimulate trial,” she says.
“While the methodology itself may not
seem innovative, few manufacturers are
leveraging category strategy and unlock­
ing shopper insights. While it’s vital for
marketers to grow their brands, they
must be aware that today’s shoppers are
becoming more astute and calculated
in their purchase decisions and that the
brand alone may not be enough to drive
conversion,” comments Margolius.
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Demonstrators and promoters become brand ambassadors – whether
for the store or specific product – and must be chosen with this in mind.
“The reason to buy needs to be made
fully apparent at the moment of truth –
if need be in the most literal way to make
it easier and more impactful for shoppers.”
Treats at the till
The checkout is the most hankered
after space in the whole store. The real
estate is often sold to the highest bidder
– irrespective of whether the product
actually fits into the retailer’s impulse
strategy. According to Inper­spective’s
Shopper Diary Study, shoppers doing a
top-up trip shop around 25% or less of the
typical supermarket environment (monthly
mission covers 60-80%).
“The checkout therefore remains an
important area in the store for driving
impulse purchases,” says Margolius.
“Snacking categories are extremely
high impulse and if they get into the
shopping basket, whether it’s chocolates,
candy or gum, it has a direct link to
increased consumption patterns,” she
adds.
In response to customer feedback,
Woolworths has added a much wider
range of healthier snacks to the checkout
catalogue. Woolworths has also tried
to make it as convenient as possible for
customers to use fewer plastic bags by
placing reusable bags near the tills.
inconsistent view around what truly
will drive profit per square metre at the
checkout,” comments Margolius.
The queue question
A braai isn’t limited to a particular time of year or season – even the rain won’t stop a planned
braai so why, then, do only some stores have a braai display all year round?
While it is always a happy way to greet customers, having a flower display at the end of the shop
means customers can take home a bouquet without worrying about it getting squashed.
they may have stuck to their shopping
lists in the pet care aisle, lower self-control
displayed at the checkout could very easily
lead to them popping a few doggy treats or
kitty toys into their trollies.
Woolworths adds a limited edition of
special occasion snacks to its checkout
offering – like Easter eggs, Christmas
stocking fillers and Valentine’s Day treats.
Retailers have differing strategies with
regards to their checkouts with shoppers
claiming to find as many as 79 categories
at the respective till points (Inperspective,
Shopper Diary, 2012). “This frightening
statistic only validates the proliferation of
SKUs found in this area and as such, an
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‘Treats for me’ tend to dominate the
checkout – whether it be a cold drink,
chocolate bar or small packet of chips.
Rightly so, because by the time a shopper
gets to the till, she certainly believes a
reward is in order. Kirkbride suggests that
this ‘treats’ idea could be taken further to
include ‘treats for kids’ and ‘treats for pets’.
“We don’t always treat ourselves but we’re
very likely to treat someone else,” she says.
For example, instead of just relying
on ‘pester power’ to sell sweets and
confectionery, children could be nagging
for higher margin items, such as hair
accessories, toy cars or other characterthemed products. For pet owners, while
Talking about the till, there’s always the
interesting debate of which queuing system
to use: The snake queue, sometimes known
as the communal or fair queuing system
versus the conventional checkout. “The
ideal checkout process is one that operates
efficiently, allowing customers to conclude
their transactions expeditiously, whilst
offering them the option of purchasing
any last minute treats,” comments the
spokesperson for Woolworths.
Always a feature of Woolworths Food
and Dis-Chem stores, newer stores across
the board seem to be introducing the
communal queuing system – an indication
that the pros far outweigh the cons.
“The fair queue has proved to work
so well. 99% of customers love it and
even those that don’t understand in the
beginning, are able to see how quickly it
moves. It’s now being rolled back into other
Pick n Pays,” comments Stuart Duffield, GM
of premium stores across the country for
Pick n Pay.
For stores that use convenience as a key
differentiator, this system seems to work
best, as shoppers tend to have smaller
baskets, which can be processed quickly.
The problem is that at peak times,
a long queue could be off-putting for
customers coming inside the store.
Malcolm McKibbon, finance director at
Pick n Pay Louis Botha, says this perception
is sometimes a problem in the store,
particularly in the after-work trade, when
the line can sometimes extend past the
entry to the queue.
However, the speed at which the tellers
process the customers actually reduces
the time spent waiting anyway. Also, in a
small store like Louis Botha, the communal
queue was actually the only viable option
to maximise the space available.
Once the queuing system has been
decided upon, the next big decision is
product mix. Factors to consider when
choosing which products to include at
the till, according to Betech’s Maurice van
Bergen, are pack sizes – obviously smaller
packs are more suited for an impulse
purchase – and product presentation.
The way a product is displayed can make
a big difference to whether it’s bought
on impulse, particularly for lesser-known
brands.
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CHECKOUT
& IMPULSE SALES
Duffield says Pick n Pay’s Rewards department decides on
the breakdown of the run based on rate of sale and the space
requirement of each product. “It also allows us to put certain items
in the run that don’t have to be in the aisles, such as magazines and
chocolate countlines.”
As an importer of products, van Bergen says that POS stands and
dump bins are very effective as they shine a spotlight on foreign
products and stir interest away from the traditional chocolate and
snack fare laden on the shelves. He believes impulse products must
be strongly supported by consumer advertising so brands are top of
mind when it comes to the purchase decision.
In the communal queue, the location of a product also has a big
impact on whether it actually goes into the basket. For example, if
your product is displayed at the beginning of the queue, customers
are likely to miss it completely if there are only three people in
front of them. The space just before the tills should therefore be
the most highly contested space – unless your store is busy all the
time.
The conventional checkout obviously has limited space for
impulse lines so retailers need to experiment with what works.
Some stores choose to stock different items in alternative queues
which does allow for a bigger variety of products to have a spot at
the till. There is also the option of offering a different mix at every
checkout. “However, not all tills are open all the time so brands are
at the mercy of the retailer as to where their products are placed –
and the resulting sales,” comments van Bergen.
The general merchandise gem
A product doesn’t necessarily have to be new to be part of an
impulse sales strategy. General merchandise, for example, is a
category that does very well cross-merchandised. This serves to
remind customers that you carry these lines, especially smaller
ticket items. “General merchandise is the most profitable impulse
sales category both in terms of sales and margins,” comments Red
Jersey Consulting’s Janet Kirkbride.
There are many opportunities in your store to create occasion solutions.
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the day instead of a giant display that
becomes an eyesore and safety hazard.
“Retailers should be aiming for incremental
volume, a richer mix of product and a good
return on space,” she says.
A pleasant point of interruption
Certain general merchandise items can do very well at the till,
especially ones that are inevitably left off the shopping list.
Woolworths Nicolway is a superb example
of a store getting cross-merchandising
right. Throughout the store, different
elements have been combined to create
one idea or solution. For example, within
the butchery, customers will be tempted
to buy any number of accompaniments
to the meat or chicken they had actually
planned to buy. From steak knives to meat
marinades to recipe books, it’s all there.
What’s more, the cross-merchandising
opportunity was present at the very design
of the store, with low racking and wire
stands being present throughout the store.
Even at the checkout, more money can
be made out of the right kind of general
merchandise than sweets and chocolates.
Shoprite and Checkers stores employ this
strategy by placing various small household
items, stationery and a few novelty items
at each till. The challenge is for store
managers to work out whether putting
these items at the till has actually worked.
Something else to remember is that
shoppers choose their checkout counter
based on which has the shortest queue and
not because of the products merchandised
there. “Therefore, a mix of the right
products, those that represent the greatest
contribution to margin, consistently
merchandised at each and every checkout
counter will be more successful in
addressing shopper needs,” says Kraft
Foods’ Nicole Margolius.
Entertainment value
Shopping for bread and milk is boring –
there’s no way around that. Shoppers still
hope – at least subconsciously – that they
will be surprised, entertained or excited
next time they go grocery shopping. It is
also in retailers’ and manufacturers’ best
interests that this happens.
Ensuring a pleasant shopping experience
begins with the basics. That is, fully stocked
shelves and helpful staff. Shoppers who
are frustrated that they can’t complete
their shopping lists will be put off adding
anything extra to their baskets. Unmanned
service counters and scales will also add
to these shoppers’ general irritation of
the store. On the other hand, if these two
prerequisites are being done efficiently,
shoppers will be more to open to (a) relax
as they journey through the store and thus
be more observant of planned interruptions
like displays and promotions and (b) be
more willing to open their purses a little
wider for that extra item because shopping
was such a pleasure.
This requires collaboration between
retailers and suppliers – to create a number
of points of interest throughout the
store. “You need to keep it interesting for
shoppers, keep them coming back to your
store,” says Kirkbride. That being said, too
much point-of-sale around the store is just
going to lead to the frustrated and irritated
customers you were trying to avoid in the
first place. She suggests changing displays
regularly to prevent customers from
becoming bored while they shop.
Another habit to avoid is using floor
space to stockpile products on promotion
under the guise of a display. If you do
have too much stock, rather make sure a
merchandiser keeps restocking throughout
Shoppers will welcome interruptions to
their shopping trip if they get something
out of it: A moment to watch a chef at
work, a sample of something new or an
opportunity to start a conversation about
a product or service. Demonstrators and
promoters become brand ambassadors –
whether for the store or specific product
– and must be chosen with this in mind.
There’s no point choosing just anybody –
the person behind the stand or frying that
boerewors must be friendly and outgoing
and have the product knowledge to be able
to actually get involved in the conversation.
Retailers could also bring in experts in
particular fields to add more value to a
shopper’s trip to the store. For example,
bring in the local vet to talk about pet care,
or a nurse to provide helpful information
around World Diabetes Day.
A last point on demonstrators is that
for the promotion or demonstration
to be deemed a success, it should lead
to conversion. For that to happen, the
product actually needs to be available at
the point of interruption. This is especially
important where a promotion is taking
place away from the relevant shelf or
even aisle. Customers should be able to
make the decision to purchase and almost
immediately have the product in hand. If
they are then directed to aisle X to find it,
they will more than likely lose interest as
they move away from the stand.
A purposeful strategy
Kirkbride recommends that retailers –
rather than any brand manager – owns
an impulse sales strategy. That way, the
strategy will serve the store agenda, which
will ultimately serve the customer. This
also extends to the weekly broadsheet in
local newspapers. Instead of just promoting
known value items (KVIs) on deal, retailers
should be using the valuable space to
differentiate and draw feet. “Use this
space to sell above-margin items,” she
recommends.
This is particularly necessary in a tough
economic climate like ours, where shoppers
are often picking their store of choice for
the week based on price.
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