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Alternate Retailers
Candy delivers a great revenue opportunity for nontraditional retailers.
Alternate channel retailers may not be candy destinations, but a growing number of national chains are finding that the category is capable of generating incremental revenues. Nontraditional retailers that have recently added candy to the assortment include Circuit City, FedEx Kinko’s, and perhaps most visibly, Home Depot.
Candy sales in nontraditional, national chain retailers
will approach $1 billion for 2006 and are growing at an estimated 10
percent annually, reports Jim Corcoran, vice president of trade relations
for the National Confectioners Association.
Many alternate channel retailers have large shopper
bases, notes Todd Hale, senior vice president, consumer and shopper
insights, ACNielsen. Statistics compiled for ACNielsen’s
“Chanel Blurring and Consumer Trends” study show that in 2005,
nearly eight out of 10 households shopped in the hardware/home improvement
channel, for an average of eight times annually, for example.
“Although shopping frequency is relatively low
within alternate channels, levels are sufficient to support the
distribution of products that have been historically stocked in traditional
channels,” states Hale in a presentation based on the channel
blurring report.
“What we have clearly learned is that people buy
candy where they shop,” says Ray Jones, a senior executive and
frequent candy category analyst for consulting company Dechert-Hampe and
the National Confectioners Association.
In addition, for alternate retailers focused on
categories such as books and music, hobbies and crafts, electronics or the
like, the likelihood of purchase is increased by the fact that the shopper
tends to be in the store for an extended period of time, says Jones.
“We’ve learned from consumers…that
the longer that people are in a store, the more likely it is that
they’re going to pick up candy on the way out,” he states.
“We’ve also heard people say that,
‘Candy is my reward. I’m running my errands, and as I’m
leaving, I’m going to give myself a treat because I deserve
it,’” Jones adds.
“There is competition for the shopping
occasion,” he reflects. “But once someone is in a store, once
you’ve captured the shopping occasion, you’re not taking away
from the purchase.”
The infrastructure to support candy sales is in place.
Leading candy makers have created special sales forces to service the
channel and to get the word out about candy’s revenue generating
potential.
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