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Retailers, manufacturers look to strike the right balance on the front end

4 min read


Dusek and Hughes discuss front-end sales at FMI Connect

The shopping list is a common tool for consumers, who often shop for groceries with a focused and definite goal in mind. And while getting them to stray from buying only the items on their lists can be a difficult task, it is certainly not an impossible one. But are retailers and manufacturers really doing all they can to inspire impulse buys? According to Bill Dusek, managing director at Dechert-Hampe & Co., and Ron Hughes, senior manager of shopper strategy and innovation at The Coca-Cola Company, who covered the topic at FMI Connect in Chicago this week, there is more that can be done to spur shoppers to put those last-minute items in their baskets.

Last year, front-end sales accounted for about $6.4 billion of the total spend at supermarkets, according Dusek, and beverages, confections and magazines mostly drive front-end sales for food retailers across formats.

“The front end is a big, big business,” he said. “You have to manage that space appropriately.”

According to Dusek, the so-called “power categories” that drive front-end sales are defined by their household penetration, how frequently they’re purchased, the degree to which they are impulse buys and their dollar share of front-end sales, and determining the best-selling items at the front-end is key to driving impulse purchases there. For retailers looking to get the most out of front-end sales, efforts like eye-tracking are often helpful, but the most important thing, Dusek said, is for retailers to understand that every shopper is different and that creating an effective front end is an ongoing process that must change with consumer tastes.

One of the biggest things to keep in mind, Dusek and Hughes said, is self-checkout, which is under-merchandized by many retailers, who ultimately miss the opportunity to make those last-minute sales to shoppers.

Overall, they said that retailers looking to find the right balance at the front end should look to those “power categories” to create excitement around the checkout process, remember that display innovation is a critical piece of the puzzle, incorporate additive technology that is not disruptive to consumers’ shopping experiences, collaborate with consumer packaged goods manufacturers to ensure that the front-end design is customer-centric, employ a front-end department manager and incorporate marketing tactics that are targeted and relevant to shoppers.

“Because everything is highly impulsive, any time you get people’s attention you’re going to enhance your opportunity to get them to drop that one more item in the basket,” Dusek said.

For Hughes, the collaboration between retailers and manufacturers is the most important part of maximizing front-end sales. He said that front-end merchandising must strike a balance between what’s right for the retailer, what’s right for the manufacturer and, most importantly, what’s right for the shopper.

“It’s a real give-and-take,” he said.

In the self-checkout realm, Hughes said he sees a lot of room for improvement, especially considering that self checkout was originally designed with an eye toward operation and not an eye toward merchandising opportunities. What has resulted is a common strategy he referred to as “quick-fix merchandising,” in which retailers just tack on products at checkout without really considering an overall strategy. Developing an effective front-end strategy requires taking a retailer’s business needs and shopper insights and looking for ways to innovate, he said.

“Your solution needs to be compact, but highly visible…if you want to attract that shopper’s attention,” Hughes said.

Achieving innovation in the front end requires a collaboration between retailers and manufacturers, he said, and retailers and manufacturers should work together to create a front-end landscape with a “distinct identity.” An optimized front-end display includes modern visuals, framing, digital or mobile messaging, lighting that highlights potential impulse-buy items and clarity.

“The idea is to keep that shopper in the shopping mode longer,” Hughes said.

However, he added that it is also important to keep in mind that front-end displays should never overwhelm shoppers, especially when it comes to features like LED lighting or digital message displays.

“It has to be done in a way that makes the product the hero,” Hughes said. “Shopper marketing must be targeted, it must be relevant….It’s a shopper’s world and we must fit in it.”


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