In this update, I wanted to cover a category that can often be viewed as the poor relation. It is often squeezed into the smallest spaces, put to the coldest part of the store and I have even been involved in conversations where a store manager wanted to drive it out of the store completely. Can you guess which category I am talking about? Read on…

Some time ago, I remember listening to someone within Travel Retail talk about getting the shopper to trade up. They were advocates for doing less work in store yet grow sales. Whilst the logic is straightforward, the implications are concerning. The example they gave was this… “It is a lot less work to sell 1 bottle of Whisky at £30 than it is to sell 8 to 10 Confectionery items. The replenishment rates are far lower as the stock turn is lower. With Confectionery, you are constantly having to re-fill the shelves every few hours.”

Some of you might be reading that and agreeing – ‘What a great idea, let’s just cut out Confectionery’.

Before you do rush off and start de-listing… just consider these 3 points.

Confectionery is a Traffic Driver

Confectionery is a highly impulsive and emotive category. It is low involvement (meaning that it takes little in the way of consideration to make a purchase) and has broad appeal. Confectionery makes a quick and easy gift and can therefore bring people into the store. For those shoppers already in store, it is reasonable to see that…

Confectionery is a Basket Builder

We have all done it. We have walked around a supermarket for our shopping and gone into the confectionery aisle or through till and picked up a chocolate bar. Being a low involvement category, the key is to put temptation into the path of the shopper. Make your shopper feel impulsive and add an extra item into the basket.

Confectionery Delivers a Return on Investment

Whilst the logic of Whisky vs Confectionery may be true to some extent, what you need to consider is the value of the stock. When you hold high value stock on a shelf, that is money tied up that cannot be used elsewhere. Confectionery turns much faster and your average stock holding is lower in value terms. Essentially, you generate a greater return on your average stock holding.

Why is this Important?

Well, space optimisation is essential in travel retail if you want to generate the best return. You must decide on which categories to grow and which to reduce is key. Having expensive stock in redundant space is not very efficient.

Some might argue that Liquor generates £50 per metre of shelf space and Confectionery generates £15 per metre so therefore, Liquor should increase space. This is a fundamentally flawed approach to space planning and I will prove it. However, let’s save that for another time.

One Action

For now, all I ask is that you take a fresh look at Confectionery. If you work for another category (i.e. Beauty or Liquor), you might want to see how you can appeal to those shoppers by targeting their footfall. If you are a retailer, Confectionery can add more than 10% to an average transaction. It is a very important and often underrated category.  Use is wisely and it can be the key that unlocks your next big gains.

Our research has highlighted some key insights to reveal the emerging story of how stores of the future should be set out. For information on how you can optimise your layout to drive incremental growth, contact me at kevin.brocklebank@oneredkite.com.

As ever, thanks for reading.

Kevin