A shelf or two of automotive fluids. Perhaps a spinner of smartphone supplies. Maybe some pens and notepads for that desperate student, or an inexpensive toy for that toddler tugging on your customer’s coat.
For many, this is not a category; rather, it’s a hodgepodge of miscellaneous items that do not fit easy categorization and thus are classified as general merchandise (GM).
For the few, the invested, general merchandise is an asset, a niche segment and market-basket contributor that might not define a store but does round it out. Instead of piles of static items, GM hits on trends and the under-$5 purchase.
Matthew Paduano, vice president of category management for the 78-store Nice N Easy Grocery Shoppes, Canastota, N.Y., tracks what’s trending and is sensitive to the importance of catching a trend on its upward trajectory.
“We want to realize the potential of this category and the profitability of items,” he says. The GM department in his stores averages 160 linear feet, including 6 to 8 feet of automotive supplies, 2 square feet of cosmetics, pallets of firewood and coal outside the store, and tables for T-shirts just inside the door. “If you can’t eat it, drink it, smoke it or chew it, it goes into GM.”
Of course, a local angle doesn’t hurt. Syracuse University basketball is hugely popular in Nice N Easy’s trade area. Paduano knew if his stores offered university T-shirts, they would sell; however, he couldn’t purchase such a localized product from his wholesaler. So he contracted a local vendor to print Syracuse University T-shirts with constantly changing slogans ranging from a regular university imprint to time-sensitive messages such as “Beat Duke” at Thanksgiving 2013.
“When we get these T-shirts, they are still warm from the press, like a loaf of bread,” Paduano says. Shirts are unpacked and repacked by Paduano and his staff according to projected sales for specific stores. Nice N Easy has sold thousands of the shirts. Even though college basketball isn’t played year round, he says, some rabid fans scoop up new shirts no matter the season.
Shirts and other hot GM items are not placed on in-line shelves. “A lot of our GM products are placed on freestanding displays,” Paduano says. “If you put it in line, it becomes furniture.” Items are placed “front and center,” he says, where customers can see, touch, feel and buy. Shirts are placed on folding tables by the entrance, so customers see them as they enter the store.
Helping the offering is social media. Information and photos of the T-shirts are posted on Facebook and Twitter. Customers even call stores to inquire about sizes.
Challenge and Reward
What can make GM daunting is the necessary labor involved. For customized products, Nice N Easy staff must not only work closely with a local distributor but also package the item themselves for each store.
That’s the hard work. The reward is that customers take notice.
Take female shoppers: Nice N Easy conducted small focus groups to determine what might attract more of them. Among the discoveries was that women wanted the chain to carry more makeup. At the time, Nice N Easy carried a SKU or two, but the fear was obvious: Makeup is generally an expensive product and could be susceptible to shrink or gathering dust on shelves.
A visit to a New York trade show put Nice N Easy in touch with e.l.f. cosmetics (or eyes, lips, face), a popular brand less than half the price of many other names.
Today, cosmetics are a niche destination for the chain. A two-sided spinner vends a wide variety of products, giving customers the choice they voiced in focus groups. Most items are priced at two for $3 or $1.99 each. “We’re not gouging customers, but we are able to still make a good margin of 60% at this price,” Paduano says.
The introduction of e.l.f. has produced a “very, very good response,” he says, even though the cosmetics are a very small percentage of sales of the entire GM department. The value is in the line’s reinforcement of the chain’s image as a female-friendly retailer.
The success also speaks to the importance Nice N Easy has placed on general merchandise. “Offering new and unique items in the GM department is bringing in new customers to our sites,” he says, “which translates to additional sales in all of the other departments.” Like the Syracuse shirts, the cosmetics are not available from a wholesaler or supplier that breaks down the items for each store’s needs. When it arrives, Paduano and staff handle repackaging and distribution.
Nice N Easy also caters to families and their children, which can take on a variety of forms. Take Silly Bandz a few years ago. During the craze around the rubber novelty jewelry, the beauty of it was that girls didn’t want just one. “They had to have 10 or 12 at least,” Paduano says. Like all fads, Silly Bandz faded. Now the latest kids’ craze is TRRTLZ (turtles) friendship bracelets, he says.
Debuting in 2013, TRRTLZ appeals to both kids and adults. Because wearers are encouraged to give a bracelet to the next person who is kind to them, demand has been strong. The 10 varieties signify different traits, which keeps customers coming back for more, at least until the next trend comes along.
Also kid-friendly are the plush animals Paduano stocks according to holiday. These items are drop-shipped to a secondary supplier and packaged for stores at Nice N Easy headquarters.
Follow the Season
Nice N Easy fuels more than one mode of customer transportation from its stores. In winter, the c-store’s trade area has plenty of snow and, with it, snowmobilers. Besides the usual automotive oils, Nice N Easy takes advantage of the snow, Paduano says, and sells Ski-Doo XPS snowmobile oil. At $44.99 a gallon, the c-store price is $5 cheaper than dealers but still yields a good margin.
“Unlike dealers, we’re open 24 hours a day, seven days a week and offer the oil snowmobilers need, only cheaper,” he says. This GM program started with a one-store test and expanded as customers began preordering the oil—with some big-box stores even buying from Nice N Easy after running out.
Nice N Easy catered to the customer and turned stores into a destination for the oil, which is a goal for any category. Also, the product’s healthy margin helps offset categories that have dropped over time for all c-stores, such as tobacco. The winter of 2013-14 was so good for sales, Paduano says, that he plans to up his investment in the product next year. Another bonus: There doesn’t have to be snow and ice for customers to need the oil. Summer brings boaters, personal watercraft riders and four-wheelers to Nice N Easy stores for the oil, as well as worms, fishing gear and a variety of other outdoor sporting needs.
In winter months, you will see pallets of coal or firewood stacked outside Nice N Easy stores. “We sold tons of wood and coal this winter,” he says. Customers buy two or more pallets at a time, he says. Convenient, competitively priced coal and firewood have made Nice N Easy a destination for another group of consumers, he says.
With that, Paduano offers some friendly advice on how to transform GM from a random junk lot to a purposeful opportunity.
“You have to be nimble,” he says. “You won’t sell the same number of an item at each store—you have to do your research.” That research also involves checking out available suppliers.
“Don’t go chasing sales down to the last item,” he says. “If you load up too much, you will be sitting on inventory.”
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