Destination: Snacking Success

The fact that snacking is on the rise is good news for convenience store owners, but as more consumers visit c-stores for a snack, retailers will have to work harder to properly merchandise packaged snacks, give consumers what they want and win their loyalty for the next trip.

There are numerous ways to accomplish this — from leveraging dayparts to creating “variety” destinations to going category by category and designing the best arrangement. The method, or combination of methods, that works best will depend on the individual situation of a store, but step one is to understand what customers are thinking.

“Operators need to consider the consumers’ ‘need state,’ or frame of mind at the time of purchase,” Kelly Fulford, senior category development manager for General Mills Convenience, told Convenience Store News. “Why is the consumer coming into the store? Is the consumer looking for something sweet or salty? By understanding and marketing to the mission of the consumer, retailers can capture impulse sales and increase the basket ring.”

WHERE & WHEN

Location is a key consideration, both outside and within the store.

“Is the store near a school where candy and chips do well? Or is the store near a highway where coffee and breakfast bars do well on a heavy morning commute?” posed Jennifer Miller, merchandising category manager, center of store, for Chevron Corp.’s ExtraMile chain.

These aspects help determine what snacks to offer, and once c-store operators decide how much of their packaged snack offering to devote to certain products, they must then decide how much space in the store that category gets.

“It’s all about the ratio between space to sales,” said Miller. “Think about how much packaged sweet snacks contribute to your sales vs. other center-of-store categories. It’s important to keep the appropriate amount of space dedicated to the snack category, whether it’s a salty or sweet product.”

Once retailers know what and how much to offer, they can arrange things to appeal to their customer base. Even then, though, they should keep in mind that time of day affects navigation. Healthier snacks are more popular in the morning hours, while demand for indulgent treats increases later in the day. Fulford recommends an organization structure based on key need states and dayparts rather than a merchandising strategy by category.

“For key categories, we leverage consumer behavior and purchase drivers to influence how we organize the set,” Fulford said. “In general, we recommend merchandising each category by product segments, brands and lastly, bridge by flavors when possible.”

GETTING IT TOGETHER

There’s a simple way to create groupings of snack products that fit together and make appropriate snack destinations: look at what customers tend to purchase together and make it easier for them to do so. For instance, cup cereal, breakfast bars, pastries and Pop-Tarts fit together as a breakfast combination, so Chevron ExtraMile places packaged sweet snacks near its coffee.

“We have found that coffee and packaged sweet snacks are typically purchased together,” said Miller. “We therefore try to make it as easy as possible for our customers to complete their related-item purchases so they can be on their way.”

Adjacencies also help increase the overall basket size. “At Rutter’s, we merchandise packaged snacks to adjacencies as much as possible,” said Robert Perkins, vice president of marketing for York, Pa.-based Rutter’s Farm Stores. This strategy is designed to increase the basket size with add-on items. “We try to maximize the customer flow and queuing space to entice add-ons.”

Other pointers include:

• The best-selling salty snacks do well with multiple points of distribution inside a store. If possible, at least one salty option should be placed near cold beverages as a related-item purchase opportunity.
• Instead of looking at brand first, customers purchase bars based on what type it is (such as energy, protein or treat bars) and the benefits it provides. If retailers only have one section for bars, rather than placing them in a daypart or purchase-type set, they should still organize that single set by attribute instead of brand.
• For sweet snacks, non-chocolate items should be grouped together, then transition to bakery items and finally into chocolate and more indulgent snacks.

LOOKING AHEAD

Just when c-store operators have a merchandising plan set for their packaged snacks, it will be time to reevaluate everything. Consumer preferences are always in flux, so savvy retailers should keep an eye on trends that will affect their market.

It’s important for retailers to look at consumer data while trusting their own expertise. For instance, better-for-you snacks have long been on the rise, but c-store retailers know health isn’t always the top priority for their customers.

“The consumer is more aware of healthy options, but may not purchase using the same thought process,” Perkins said. “They want something ‘perceived’ to be healthy while also tasting good and satisfying.”

In general, industry insiders agree product variety and new flavors keep consumers interested and offer new merchandising opportunities, though the current flavors in vogue will change over time. Continued innovation in convenient packaging for on-the-go customers is also a draw.