The Future of Front End
In its present state, the average supermarket front end is overdue for a makeover.
“Today, the front end continues to serve a transactional role for both retailers and shoppers, and frankly very little innovation has occurred in this space,” notes Michael Taylor, president, North America private brand at Stamford, Conn.-based Daymon Worldwide. “For retailers, it’s the last point of contact, and the last chance to sell something to the shopper. This is why we typically find impulse or convenience items like batteries or snacks at checkout.
“This area of the store doesn’t currently create a meaningful consumer engagement to drive more than just impulse purchases. For the shopper, this is the point in their shopping trip where they want to move quickly to pay for their purchases, and therefore they’re not as engaged as they are in other areas of the store.”
To address this problem, grocers will have to innovate. “Retailers have an opportunity to create new, differentiating experiences for shoppers through more engaging and interactive merchandising,” observes Taylor. “Surprising them with unexpected items in unexpected places or in unexpected ways will drive more impulse purchases and profits, and make a final important connection to the store banner.”
His recommendations take the section out of its long-established comfort zone.
“Fresh/foodservice is clearly a huge opportunity in filling immediate needs like ‘what’s for dinner,’” says Taylor. “We also suggest moving from the standard assortment of gum and candy to instead provide specialty items like premium indulgences or healthy snack options to surprise and inspire shoppers. Another idea is to use the space to merchandise the items shoppers frequently forget, such as birthday candles, greeting cards or pet treats, or to remind them about special occasions. Both of these ideas would reward a shopper by saving them another trip to the store.”
Keeping Candy Dandy
Despite such advice, it doesn’t seem that candy and gum are ceding space in most front ends any time soon, so the trick will be growing category sales in the section — however the section is defined.
“At The Hershey Co., we understand that unplanned purchases can occur anywhere there is a transaction point, whether in a traditional store, online or mobile,” asserts Bethany Bauer, senior manager, Hershey Paypoint Experiences at the Pennsylvania-based company, adding that alternative pay points such as self-checkouts, grocery pickup, deli and prescription are growing the fastest. “The Hershey Paypoint team is working to develop flexible merchandising solutions for the new methods of conducting the transaction.”
These include a suite of tools to analyze each retailer’s front end performance in relation to category space allocation, planogram efficiencies and merchandising best practices. Among the company’s front end initiatives are several click-and-collect merchandising tests expected to be in place by the end of the first quarter of 2016, and the Safeway Candy Zone, which has resulted in double-digit sales growth for Candy Zone items, and strong sales growth for the entire candy, mint and gum category.
“Retailers must consider flexible racking solutions (i.e., nonwelded magazine pockets) to ensure retailers can react to category shifts, allow for new categories, pack types and innovation,” urges Bauer.
Hackettstown, N.J.-based Mars Chocolate North America and one of its sister companies, Chicago-based Wrigley, are pursuing a similar path, addressing the evolving checkout process by designating the physical areas where shoppers pay for their goods and services as transaction zones.
“Our goal is to help retailers drive sales growth within the different transaction zones by ensuring the right category space allocation and item assortment, in order to increase sales of impulse items to more shoppers,” explains Tiffany Menyhart, Wrigley’s director category management.
For instance, Mars and Wrigley found that merchandising gum and mints over the belt on the left side of the queue increases total front end sales, due to their high impulsivity and low decision time, while magazines’ high impulsivity but much longer decision time mean they should be merchandised further away from the cashier. The companies further note that retailers can encourage multiple impulse purchases on the right side of the queue by merchandising complementary categories in the same need state adjacent to each other.
As an example of this, nonchocolate confections and chocolate can be merchandised next to beverages due to their high impulsivity and low decision time, as well as high overlap in purchase. Similarly, since more than 90 percent of beverage shoppers also buy salty snacks, the latter should be merchandised above the cooler to take advantage of this.
As noted above, soft drinks are another integral element of the front end. “In the case of beverages, shoppers are looking for or compulsively want quick and easy solutions at the end of their trip,” asserts Ron Hughes, director of shopper experience innovation at The Coca-Cola Co., in Atlanta. “We strive to provide that convenience and are committed to providing shoppers with an experience that offers them unequaled ‘ice-cold’ refreshment. We are also focusing on providing a delightful shopping experience by incorporating new and emerging technology, sensory experiences, and compelling call-to-action messaging into our solutions.”
To maintain the category’s fizz, “The Coca-Cola Co. is approaching the front end through an omnichannel lens, making sure we develop robust front end landscape insights that are relevant to all categories and shoppers,” says Hughes. “We are studying how the front end landscape will evolve over the next three to seven years, and the role beverages, other traditional power categories and new emerging categories can play in helping customers grow sales and profits.”
Further, in common with candy companies, Coke is looking to impulse purchases beyond the front end. “We are also developing strategies for how retailers can leverage and better understand opportunities brought about by alternative checkout methods and the evolving checkout landscape,” adds Hughes. “We are looking at new insights on shopper attitudes and buying behavior relative to front end checkout and total-store checkout opportunities.”
A Better-for-you Boost
Doubtless coming as no surprise to Daymon’s Taylor, healthier items at the front end are much in the news of late. While this article was being written, Aldi’s and Target’s efforts in this direction were grabbing headlines. But what does the rollout of such a program actually entail?
“Last year, around National Nutrition Month in March, I began pilot-testing more nutritious offerings at two checkout lanes,” recounts Elisabeth D’Alto, retail dietitian at ShopRite of Timonium, in Lutherville-Timonium, Md. “The pilot test came about after talking with shoppers and store associates during tours and nutrition consultations. It was apparent that there was a need for better-for-you options on the front end checkout lanes. I’m encouraged by the positive feedback we’ve received on the program over the past year, and these two lanes now have become a best practice for our store.”
Although the pilot was ultimately successful, getting to that point wasn’t a completely smooth process. “When I was initially selecting the products to be merchandised on the front end, it did take some trial and error at first to figure out which products worked the best,” admits D’Alto. “We featured an end cap cooler that included plain bottled water, unsweetened iced teas, coconut water, 100 percent juices and low-fat milk. I also wanted to make sure that we were sensitive to customers’ dietary concerns, so we offered a variety of low-sodium, reduced-sugar, low-fat, gluten-free and dairy-free options.”
Another issue was making sure shoppers knew about the new offerings. “Sometimes customers can be [so] bombarded with all the messaging and signage in a store that it’s hard to set a program like this apart from others,” admits D’Alto. “However, with that said, this is a program that creates a point of differentiation for us compared to other retailers in our market. Another advantage is that we have a registered dietitian like myself on staff to help drive its success and offer free nutrition services to our customers.”
The program’s success means that “ShopRite will soon be ushering in an initiative that places better-for-you snacking items as an available option in the checkout lane of nearly all of our stores,” according to D’Alto. “ShopRite also plans to add better-for-you beverage choices in coolers in most of its stores. The complete rollout is expected to take about a year, and will start in mid-2016.”
CPG companies are also aware of growing consumer interest in healthier items, and planning accordingly at the front end. As an example, Mars and Wrigley note that the appropriate “categories should be evaluated for product mix that satisfies growing needs for better-for-you snacking and beverage.”
Hand in hand with the push for healthier products at checkout is the advent of more perimeter items merchandised at the front end.
“Having ‘healthy’ checkouts, including those that offer fruits/vegetables, is definitely a topic of conversation,” affirms Kathy Means, VP of industry relations at the Newark, Del.-based Produce Marketing Association. “Though there’s a long way to go, we are seeing movement.” While much of this worldwide movement is occurring in the convenience store sector, Raley’s and Target are among the grocers testing this merchandising format.
Means believes that produce’s presence at the front end “is likely to increase,” but adds: “It’s important to note that offering produce in some checkout lanes doesn’t mean doing away with other items in other lanes. Consumers looking to grab something at the last minute can find what they want, whether that’s produce or other foods or magazines or razor blades. Because it’s not an all-or-nothing proposition, chains can experiment.”
Fruits and veggies aren’t the only perishable products making their way to the front end, however.
Cindy Sorensen, VP business development at the Midwest Dairy Association, in St. Paul, Minn., notes that “dairy products are well positioned to help retailers capture more of the quick-trip shopper experience that they are losing to other channels of trade. The greatest opportunity for a traditional grocer is to more conveniently locate those items in the store.”
To boost consumption of milk and other dairy products, Sorensen suggests grab-and-go coolers “at the front entry of the store [containing] those items that are most frequently shopped for quick trips: milk, juice, eggs, cheese and butter…. and we recommend a display of bread and bananas also be located in close proximity.”
As part of a better-for-you front end assortment, Sorensen points out that “[d]airy products such as single-serve milk, cheese sticks and yogurt lend themselves well to being included on a front end fixture, along with other healthy snack options such as granola bars and fresh fruit,” citing Hy-Vee’s Blue Zone checkouts as a particularly noteworthy example of this form of merchandising.
“Retailers have an opportunity to create new, differentiating experiences for shoppers through more engaging and interactive merchandising.”
—Michael Taylor, Daymon Worldwide
“Offering produce in some checkout lanes doesn’t mean doing away with other items in other lanes.… Because it’s not an all-or-nothing proposition, chains can experiment.”
—Kathy Means, Produce Marketing Association
“Dairy products such as single-serve milk, cheese sticks and yogurt lend themselves well to being included on a front end fixture.”
—Cindy Sorensen, Midwest Dairy Association