Retailers Can Capture More Sales at Front End: Research
Sep 26th 2012, 08:34
Retailers may be missing incremental sales opportunities at the front end, according to recent front-end best practices gleaned from research completed by Wrigley.
The front-end department -- the only section every shopper is guaranteed to pass through -- is actually one of the most profitable locations in the store. The profit margin for front end is 32.8 percent, compared to 27.3 percent for the total supermarket, according to data from “Impulse Marketing, Checkout Update 2012,” cited by Wrigley.
Additionally, 80 percent of front-end shoppers surveyed say they are willing to pay full price for items.
The research also finds that shoppers are making more “quick trips,” which means more weekly trips to the local store, and additional opportunities to capture sales at the front end.
Delving into front-end shopper habits, Wrigley finds that these consumers are looking for immediate consumption, convenience and entertainment. They are two times more likely to purchase for themselves. As a result, retailers have a significant opportunity to trigger an impulse purchase at the front end.
The three categories that represent the majority of front-end sales are confectionary (35.1 percent), beverages (28.7 percent), and magazines (25.8 percent), according to the Impulse Marketing data.
As new front-end categories emerge, retailers should balance the product selection they’re offering to ensure customers’ needs are being met and profitable sales are generated for stores, Wrigley suggests. Moreover, retailers should manage the front end as one strategic business unit to maximize profitability.
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