For Andrew Boudreaux, category management specialist for the Hershey Company, studying data is really the only way to understand the consumer shopping experience. He has worked in numerous sectors of retail, from convenience stores to specialty retailing, which includes several channels, including micro markets. Using data, he shared what micro market operators should know about:
- What role does candy play within a micro market?
- What packaging is best suited for the micro market shopper?
- How to maximize ticket sales in a micro market through informed merchandising.
- Dedicating space to turn product categories.
This article is part of a series from Automatic Merchandiser and VendingMarketWatch.com that recaps some of the sessions from the 2023 NAMA Show. Check out Automatic Merchandiser’s Vending & OCS Nation podcast, hosted by Bob Tullio, for more comments on the education sessions.
Boudreaux pointed to four consumer trends that are impactful in 2023.
- Migration – A population shift to the suburbs and state-by-state moves.
- Home centricity and the pursuit of happiness – A shift to eating at home, enjoying the value of being home.
- Generational eating patterns – Shoppers are more influenced by better-for-you products and are snacking throughout the day.
- Inflation and economic uncertainty – Having an impact on how consumers buy.
Growth in snack categories
According to convenience store data accumulated by The Hershey Company, in the past 52 weeks, most snack categories are outpacing total store growth of 7.6%, with salty snacks up 16%, cookies and crackers up 14% and candy up 12.8%. “We believe that trend will continue based on historical data,” said Boudreaux. “If you look at the 2007 to 2009 period, the GDP was down 5% and personal consumption expenditures were also down 2.5%, but candy, mint and gum sales went up 8%.”
Boudreaux said that he expects growth in all snack categories to be at 5% to 7% in 2023 and 2024.
Micro markets and candy
Boudreaux said that candy and snacks are a huge category in micro markets and can’t be overlooked. While chocolate leads the way, sweets of all kinds have experienced significant growth, largely due to innovation and interest by Gen Z and millennial consumers.
King versus standard size
King-size products are more popular than standard-size selections, a change that happened and has not let up since 2014, Boudreaux said. Consumers decided that they preferred it, and retailers saw better margins in king sizes. Since 2014, king sizes have seen three times the growth of standard sizes. “It is paramount to have king-size items in a micro market,” he added.
Candy is an impulse buy – a quick decision
Boudreaux noted that candy purchases are made quickly. Shoppers walk when they can't find what they want. On average, 59 seconds is spent on an aisle looking for a product with almost 50% of the shoppers only spending 30 seconds or less. Quick decisions are made. Accordingly, Boudreaux said operators need to make it easy for shoppers to find their favorite choices.
Maximizing ticket sales in a micro market through informed merchandising
Boudreaux said that the Hershey Company offers a gold standard planogram for retail and is applying the same principles for micro markets. He urges operators to use the data to set up their micro markets for maximum performance. He added that their own point-of-sale data, combined with operator data, has provided them with “the secret sauce.”
Making product placement decisions
While each planogram is going to be different based on demographics and other factors, Boudreaux’s data suggests the following for micro market operators:
- Lead the aisle with salty snacks, bars and meals.
- Keep impulse categories close to the kiosk.
- Keep like products together.
- Organize the power brands to make shopping easier.
- Once-a-year planogram adjustment is sufficient.
- Look at local convenience stores for planogram guidance.
- Use space-to-sale analysis to have the right assortment.
Boudreaux suggested that operators use a combination of industry data and their own data to develop the best planograms. He also invited operators to collaborate with his team, to share and accumulate data.
ABOUT THE AUTHOR
Bob Tullio is a content specialist, speaker, sales trainer, consultant and contributing editor of Automatic Merchandiser/VendingMarketWatch.com. He advises entrepreneurs on how to build a successful business from the ground up and specializes in helping suppliers connect with operators in the convenience services industry – coffee service, vending, micro markets and pantry service specifically.
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