Boosting Beverage Sales With Front End Merchandisers
How to leverage shopper insights
Brought to you by Dr Pepper Snapple Group.
Have you ever wondered what role front end merchandisers (FEM) play on shoppers’ journeys in convenience stores or questioned just how much volume is coming from these coolers? Wondering what the optimal mix of beverage categories might be for these coolers or if they are incremental to the cold vault?
Dr Pepper Snapple Group’s recent custom study of over 435,000 c-store trips provided strong insights to help optimize the incrementality of this valuable c-store real estate.
Overall, about 1-2% of c-store shoppers currently shop the FEM coolers, and their purchases make up about 4-8% of all bottle/canned beverages at c-stores. Interestingly, while approximately 40% of c-store shoppers are exposed to both FEMs and the cooler, the percentage of shoppers who stop and engage with the FEM coolers is drastically lower (about 6x less) than those who stop and engage with the cooler.
But of the shoppers who do stop and engage with the FEM coolers, almost half end up purchasing a beverage. With this high closure rate, it might be tempting to simply focus on driving traffic to the FEMs; however, without additional adjustments to optimize location and mix, this could have negative effects on overall sales volume.
For example, location is significant for the role that FEMs play on a shopper’s trip to c-store. FEM coolers immediately visible upon a shopper’s entry into the store tend to be less incremental, as shoppers who grab an item right when they enter often do not visit the vault, where the opportunity for incremental purchases exists. In these situations, the FEM cooler serves as a convenience to the shopper rather than an incremental purchase for the retailer.
Heat maps from the research suggest that FEMs that are discovered either while on the way to the register or while in line tend to provide the biggest incremental boost. Additionally, when assessing percent of sales vs share of space in an FEM, research suggests that the optimal mix by category for an FEM is roughly 40% CSD, 25% water, 25% energy and 10% tea/coffee, though a store’s specific shopper profile should be taken into consideration when planning this mix.
Research also provided insight into the shopper demographics attracted to FEM coolers. Given that 64% of FEM shoppers are millennials and heavily skew female, Dr Pepper Snapple Group is pair its generational knowledge with the FEM research to truly optimize an FEM strategy for maximum incrementality.
For example, millennial shoppers are driven by variety, tend to seek emotional rewards on their shopping trips and see the convenience channel as a destination for discovery. To leverage this openness to discovery and their existing FEM inclination, FEM coolers or other secondary cold drink placements should serve as discovery centers with roughly 75% of items exclusive to the FEM. Given these insights, FEMs are fantastic locations for innovation, such as new Bai flavors.
By creating a true destination with FEM coolers, retailers can drive incremental purchases and position themselves as pioneers in beverage.