Progressive Grocer - January 2011 - (Page 92)

Nonfoods The Front End Checkout: A Micro-economic Model of the Store An untapped growth opportunity exists in this often underused area. By Edward Novick A ccomplishing real economic gain in sales and profits requires flexibility and change, and yet there’s often resistance to change in an established corporate culture accustomed to the status quo. Setting an agenda and inspiring corporate momentum to leave behind the mental and emotional comfort zone of “business as usual” are formidable management tasks, but ones that are necessary for businesses to grow and adapt in response to today’s fast-changing marketplace. The front end checkout is a perfect example of this resistance to change, and those retailers willing to challenge their current thinking about this area of the store will realize that an untapped opportunity for growth currently exists there. Historically, the checkout area has often been underused by retailers, which have ceded control of this strategically important area of the store to the suppliers whose products have traditionally occupied checkout displays for years. Since the late 1960s, publishers, confectioners, and their suppliers and distributors (and, later, beverage companies) have all been as effective as Washington lobbyists in persuading retailers that their interests are aligned and that their product mix will create the most satisfying experience for retail customers. Over time, the vendor community trained retailers to focus on the checkouts in a minimum three-year repetitive cycle revolving around refreshing hardware to create a modest profit center, all the while preserving and maintaining a conservative status quo that primarily served the vendor’s sales and distribution agenda. This strategy is incapable of addressing the comprehensive sales growth requirements of the retailer, however. Unfortunately, the consequence of vendor cooption over the front end business has been an overspacing of limited inventory, a flat and unchanging market profile, and significantly undeveloped planograms, resulting in a lost opportunity to increase retailers’ sales and profits. The Checkout as Micro-economy When the checkout is viewed as a micro-economic model of the store, its true power as an engine for growth is revealed. Its lanes and end caps are conceptually equivalent to gondola aisles and end displays, but the volume of foot traffic here is unmatched, making it the most desirable real estate in the store. A comprehensive, sophisticated marketing strategy that encompasses multicategory inclusion, responsive and expert market research, and constant reinvention can plumb the rich marketing opportunities available at the critical point of purchase. The rewards for the retailer willing to invest in a new program designed to serve its own sales model have been spectacular. As with any other area of the store, the efficiency of the retail space should be evaluated and driven by merchandising. Checkout merchandising equipment should be adaptable to adjust to changing market needs, and new planograms should be closely monitored to adjust product selection for maximum sales velocity in the changing marketplace. When the front end checkout is managed from an objective merchandising perspective, management is able to make timely and informed decisions divorced from category politics. As a result, the checkout merchandising equipment evolves into a planogram www.progressivegrocer.com 92 • Progressive Grocer • January 2011 A H E A D O F W H AT ’ S N E X T http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - January 2011

Progressive Grocer - January 2011
Table of Contents
Nielsen’s Shelf Stoppers/ Spotlight: Medications and Remedies/antacids
Mintel Global New Products: Salty Snacks, Meat Snacks and Popcorn, Q2-Q3 2010
Best Practices: Are We There Yet?
Store of the Month Special Edition: My H-E-B
Marketing: Circular Paradox
Gma President’s Note: United We Stand
Pg Special Events: Pg Honors 2010 Top Women, Green Grocers at Gala Event
Retailer Spotlight: Winn-Dixie’s Awakening
Category Management: Mutual Benefi Ts
Special Section: Progressive Grocer Independent: For Retailers, by Retailers
Condiments: A Matter of Taste
Butter/margarine: Promise for the Future
Desserts: Sweet Solutions
Energy Drinks/shots: Energy Drinks Get a Jolt
Winter Produce: Season of Plenty
Meat Merchandising Study: Meat to Meals
Candles/Air Fresheners: Beyond Common Scents
Front End: The Front End Checkout: A Microeconomic Model of the Store
Cough and Cold: A Tissue Please?
Whole Health: Feeling Good in 2011
Futuretech: It’s a Mad, Mobile World
Progressive Voices: Retailers’ Value Equation = Customer-Benefit Costing
Ovens and Rotisseries: Heating Up
What’s Next: Editors’ Picks for Innovative Products

Progressive Grocer - January 2011

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