GMDC explores how grocers can meet shoppers’ increasingly high expectations through data-driven strategies and insights in their latest research: Rethink Front-End: Innovation, Flexibility and Relevancy Elevate Performance
COLORADO SPRINGS, Colo. – If you’re not thinking about your store’s front-end as an engagement center with pop-up shops, food service, spa-like wellness centers, farmers’ markets, and a town square vibe, you’re missing an opportunity to meet the increasingly high expectations of shoppers, while also creating new revenue streams.
While shoppers’ expectations throughout all retail channels have soared to new heights, the checkout remains relatively stagnant and is often cited as the most grueling part of the customer journey. Digital-savvy shoppers have evolved in how they want to shop and pay, buy on impulse, and connect to brands and stores of their choice. However, too many retailers have failed to contemporize their merchandising, payment processes, and overall environment at the front-end.
These shortcomings have resulted in a nearly 10 percent decrease in front-end dollar sales from a decade ago. According to Impulse Marketing Company’s Checkout Update, 2007 front-end sales were $6.1 billion, while sales shrank to $5.5 billion by 2016. Based on projected growth rates of typical categories represented in the front-end, a more than $2 billion gap is estimated if this area of the store had kept pace with total store sales trends.
While categories in front-end have grown in other areas of the store, why not here? How do retailers close this nearly $2 billion front-end performance gap? Global Market Development Center (GMDC) offers data-led insights, consumer survey’s and retail executive testimonials in its latest next practice report: Rethink Front-end: Innovation, Flexibility and Relevancy Elevate Performance.
“Digital-savvy shoppers expect prime experiences – in quickness, convenience, solutions, and communal feel,” said GMDC’s director of research, industry insights & communications, Mark Mechelse. “Mobile is gaining traction year over year, faster than any industry, and will soon top $150 billion in transactions, representing one-third of e-com sales. And while disruption has been occurring at the retail level for many years, the intensity we’ve seen recently is unprecedented and shows no signs of slowing. Front-ends in brick and mortar are at a crucial point of reinvention since they punctuate the store’s devotion to serving customer journeys from start to finish.”
In addition to a call-to-action to evolve with shoppers and end under-performance, the report challenges retailers to think broad, think local, think sightlines, think modular non-foods, think healthful and balanced, and think technology to future-proof their business.
Greg Parsons, senior director home & product development, Kroger, shares his vision and initiatives for front-end in the report’s insert: Other Early Sightings of the Front-End Revolution. “The innovation to figure out is for tech-savvy customers to pay differently from seniors who like seeing their favorite cashier every week. It could mean a non-stop walkthrough with a smartphone, an associate with a tablet on the sales floor, or an exceptional experience for people who go online. People want choices to check out the way they want.”
Also in the report, Larry Wilson, VP industry affairs, National Confectioners Association, describes the importance of understanding that customers’ need states may vary from moment to moment. “Retailers can be responsive to consumers and demonstrate responsibility by promoting ‘balance and choice’ with a wide range of traditional treats like chocolate, candy, and snacks as well as other alternative instant consumable options to meet shopper’s changing need states. It’s about putting yourself in position to win with your proven stars and then contemporizing assortments with the right blend of foods and non-foods.”
While best practices look at historical performance, GMDC’s next practices follow consumer trends that are driving new business and interpret the forces of change. Following are a few next practices for reimagining the front-end. Members have the ability to view and download the full report at: gmdc.org/content-library.
Be Flexible … Always: Modular racking can ease merchandise rotations and save expenses when product package dimensions change. Highlight seasonal items with flexible in-and-out merchandising systems. Test new items in different places, for short periods, and surprise your shoppers occasionally!
Create New Expectations with the Unexpected: Give unexpected services at curbside pickup and click-and-collect areas – such as offer air in car tires while loading orders, or provide demos where product sampling is necessary, especially items from the HBW aisles such as cosmetics, skincare, and trial/travel.
Non-Foods are Essential. Heighten their Presence: Innovate with GM & HBW new-item endcaps on the racetrack facing checkout lanes. Offer locally themed items, unique offerings from the community and last-minute, hard-to-find items from inside the Center Store.
Up Your Display Game: LED lights highlight products and can enhance store image and the overall experience. Fresh and contemporary display units boost the look and feel of the product and the aisle.
Fresh Says a Lot: Test and learn that fresh has a place in the checkout lane. However, strict maintenance is needed to make the right impression, examine the offering and change out selections during peak-times of the day/traffic cycle.
Adjacency. Then More Adjacency: Cross-merchandise relevant non-foods with grab-and-go prepared foods on front-of-store endcaps and emphasize the best sellers. Bring the Center Store to the Front-End.
GMDC collaborated with Nielsen, Acosta, Barrows, BHDP, JPMorgan Chase & Co., Forrester, Google, Hudson Institute, Impulse Marketing, Kantar Retail, National Confectioners Association, PlanetRetail RNG and Zigbee to create cohesive and proven insights in the report.
The partners and supporters whose contributions have made the report possible are American Greetings, BIC, Navajo Incorporated, Big Time Products, Hallmark, Energizer, Display Source Alliance LLC, ReaderLink and Time Inc. Retail.