For retailers, the goal posts are moving in general merchandise.
During the pandemic, fewer recreational and business travelers led to paltry volume from traditional road warriors, a lucrative opportunity where customers are willing to pay more while away from home.
These days, “people have a pent-up desire to travel, and that makes operators like us tasked with assuring we meet customers at that point of need,” said Numan Dharani, co-founder of Abbott’s Travel Center, a 12,000-square-foot, Exxon-branded store in Abbott, Texas.
Seeing the trend, retailers are tasked with re-committing to niche opportunities and ramping up traveler-oriented stock as that clientele returns in droves. The effort involves fine-tuning a broad basket of health and beauty-care products, plus offerings ranging from souvenirs and neck pillows to apparel, toys and electronic accessories.
When we review our c-store versus hospitality/airport shipments, what we’ve seen is that vacationers are willing to spend a little more for premium or unique SKUs,” said Michelle Ridder, director of category management, Lil’ Drug Store Products Inc., Cedar Rapids, Iowa.
The traveler stopping at a c-store for hand lotion “may be more focused on relief and price over brand and available options,” Ridder said.
The Lil’ Drug team also sees vacationers and travelers among those willing to spend more for the “experience.” The vacationer “is going to be forced to spend more for convenience at airports and hotels. Providing some premium options helps them feel better about it and elevates that experience,” Ridder said.
Merchandising Tips
To cater to travelers, Abbott’s Travel Center offers a diverse selection marked by novelty gifts, souvenir items, Bluetooth speakers, toy cars and motorcycles for children, clothing and apparel, said Dharani. In addition, Abbott’s sells Texas T-shirts, glasses, gloves, collegiate apparel and more.
Dharani considers the travel center’s merchandising vision as “a Walmart meets Toys ‘R’ Us, with a broad mix people can consider for both grocery shopping as well as holiday and birthday gifting,” he said.
Angela Solis, store manager for Hruska’s Store & Bakery, Ellinger, Texas, is less discriminate, choosing not to compartmentalize general merchandise into two sets: one display for travelers and another for local trips.
She positions health and beauty-care products in-line, and the check stand and on end caps. At the 10,000-square-foot store, an item such as a neck pillow might serve as a potential traveler-oriented buy, and traveler-customers can easily locate them within the store’s organized planogram, she said.
Such a set up became just what was needed through the pandemic as consumers identified smaller c-store formats as optimal to buy health and beauty care items—even larger count sizes of, say, analgesics, which many c-stores don’t typically stock. The shift stemmed from consumers eager to avoid multiple trips, mainly to larger-format channels.
“During shelter in place, consumers turned to convenience to meet their needs,” said Ridder of Lil’ Drug. “They’d pick up larger HBC options to avoid repeat purchases in the immediate future. But in the last year, we’ve seen a decline in the trade-up consumer. Inflation and less discretionary income are driving some to lowest-price trial options. We expect consumers to begin to trade-up more as inflation continues to decline.”
C-stores had a chance to push volume of HBC-type products that consumers might not have been aware were available within convenience—but trips during the pandemic enlightened them, said Ridder.
“Top HBC subcategories—pain, stomach, upper respiratory and family planning—continue to drive broad HBC sales,” said Ridder. “Pandemic-driven pantry loading brought awareness to personal care items in the category, such as oral care and skin care.”
Maximizing HBC
If deciphering these trends weren’t enough, consumers have identified some HBC for “unlikely” uses. “Cough drops have always been a seasonal item. However, data supports the trend where some are now using them to freshen breath, protect their voice and moisten their mouth,” Ridder said.
To thrive with general merchandise, full resets serve as an optimal way to ensure “right price, right products and right tags are positioned at each location,” she said. “If a full reset isn’t possible, then working closely with your supplier partners can determine how to best fill these voids at shelf—and maximize sales.”
Because 40% or more of lip treatment sales are tied to early cough/cold season, Lil’ Drug recommends increased inventories, product selection (novelty/holiday), and/or secondary placement.
Be it the traveling crowd or local denizens, the convenience mandate is basic but elusive: maximize in-store space for an HBC segment that accounts for less than 2% of center-store sales, said Ridder, with most operators “lacking the time to focus on a small, but profitable category.”
“While our team has always focused on dollars, the units are becoming an even more important measurement due to inflation,” said Ridder. “All parties need to be cautious of passing on price increases to cover margins, which may result in losing consumers.”