Seasonal Excitement
Cross-merchandising offers a win for the consumer, supplier and retailer
Build those events, and they will come. By Bob Gatty
For 25 years, Jerry Lynch worked for Rochester, N.Y.-based Wegmans, and in his last job was business group manager, general merchandise (GM). Today, Lynch runs the International Periodicals Distributors Association, a position he has held for the past six years.
So Lynch knows a little something about GM at retail, including seasonal, having helped lead the efforts of a company recognized in the industry as one of the best in GM, as well as food. He has a solid fix on what works and what it takes for supermarket operators to maximize seasonal sales opportunities.
Foremost, he says, is staying abreast of changing consumer interests and translating them into a company's go-to-market strategy. “The test,” he says, “is if you are profitable.” But if smart category management responds to the consumer with the right product mix that generates profit, the program will succeed.
With seasonal, Lynch stresses the importance of timing, with products changing to reflect the season. “You have to make sure you are there ahead of the season and have time to prepare and execute your program,” he says. “A lot of products may not be something the customer is used to seeing, so a high-traffic location, ads and signage are important.”
Cross-merchandising offers a win for the consumer, the supplier and the retailer, Lynch notes, pointing to valuable opportunities for tying seasonal books and magazines in with seasonal events such as grilling or holiday cooking — heavily promoted events that help build excitement, traffic and sales.
“It makes it easier for the consumer when you can bring products from different departments in the store together, but it is challenging to execute across departments both from headquarters and store-level standpoints,” says Lynch. “The best-in-class retailers are those who can cross those hurdles and bring this to the consumer. It's not easy, but when it is done right, it looks great when you see it in action. It's the right thing to do.”
Partner for Success
Supermarket operators should seek out partnering opportunities around seasonal, advises Lynch. “There are not a lot of categories where you can just walk in, sell it and leave,” he says. “You really have to walk those initiatives through from beginning to end, from the time the product is ordered until the time the event is concluded. There are so many factors in play: the weather, unforeseen events can cause havoc with your plans. So you really have to be nimble and able to react.”
A seasonal “Best Practices Report,” published by the Colorado Springs, Colo.-based Global Marketing Development Center (GMDC) in 2006, stressed the importance of selecting the right supplier partners for effective seasonal events, which GMDC said should be part of the overall corporate strategy. That advice still stands, according to experts.
The supplier should have a history of successfully supporting the retailer's business and meeting or exceeding expectations, and have high-quality and abundant personnel available to help identify and leverage business-building opportunities, the report recommended. In addition, it said, the supplier should be able to provide data and analytical information to help make the event succeed and to assess its performance.
Outdoor products readily lend themselves to such events, and Gary Peterman, president of Maxum Holding Co., whose company manufactures and sells outdoor living, beach and patio furniture, believes grocery is a growth area for his company.
“We work with grocers on events,” he says. “When you look at grocery and the footprint in the store, some of the big chains are using the vestibule area. A lot of the trend around seasonal events is to create a treasure hunt experience, which will have the most impact for grocery.” Effective events, he adds, include promotions for grilling or patio activities that can include grills, umbrellas, patio furniture, meat, poultry, spices — and even bug spray.
Peterman says Chino, Calif.-based Maxum is redesigning furniture and outdoor living products to better fit within the grocery store format and make them easier to sell. “We are designing and packaging so our products are very portable, and are coming up with alternative methods for delivery at grocery,” he notes.
He credits Meijer, Wegmans and H-E-B, among other retailers, with “creating a destination for quality goods that can compete on price with the big-box retailers.”
While price is important in seasonal, grocers don't need to be the low-cost provider to be successful, he contends. “People know there is a short lifespan on these products. They have grown accustomed to knowing that at the end of the season, they can obtain a bargain price because the market has dictated that over the years.”
But Peterman believes grocers that understand how to tie in promotions with national brands and private label, and can pull together an assortment of items to create an interesting shopping experience, will succeed.
Increase those Rings
“Summer seasonal GM should be about improving and expanding the consumer's enjoyment outside the home,” says Eric Rubel, COO at Linden, N.J.-based PIC Corp., which manufacturers pest repellents and related products. “Seasonal GM should be driven through innovative, first-to-market, high-impulse product that sells in the last 3 feet,” he adds. “It is best if these products can tie in and enhance the fun, outdoor spirit of summer living.”
Rubel points out that GM is a great way for retailers to increase rings and receive above-average margins. “These sales are 100 percent incremental to the category,” he says. “In addition, the unheralded benefit is for the customer to share with her friends and family the great product she found at her local grocery store, not just the lowest cost.”
Seasonal, of course, is also about kids, school and creativity, and Crayola, the market leader in crayons, is an expert in this arena. Today, the company is much more than crayons, although it makes more than 13 million of them every day and has a 90 percent market share. Easton, Pa.-based Crayola also offers a myriad of new products — like Color Bubbles and dry-erase crayons and boards — that responds to virtually every child's imagination.
Bob Friend, director of Crayola's consumer sales team, says the company is seeing strong growth in the grocery channel that is outpacing both mass and drug.
“Grocery stores are getting more competitive,” he notes. “They are focusing on the three main components: making sure they have the right assortment, are convenient for moms, and that the shopping experience is fun again. When grocers started making the category fun and started leveraging the creativity of the Crayola brand, people began stopping by and shopping, rather than just picking something up.”
Friend points out that Crayola does extensive advertising during key seasons, offering opportunities for retailers to tie in merchandising to create seasonal spikes in sales.
“We have made a commitment to focus on the grocery channel,” Friend says, noting that in 2012, the company will introduce a line of products tailored to grocery — “the right size so they can get in a smaller footprint, priced right, and priced where the grocery retailer can make a very healthy margin.”
Therefore, seasonal can mean excitement. It can mean excitement for shoppers as theylook for ways to enhance special occasions for themselves and their families. And, if done right, it can mean excitement for retailers as they experience those higher rings.