Pushing Candy Interruption
Getting candy in front of consumers’ faces at "points of interruption" is the overriding theme of unfolding NCA research on best practices and opportunities for category growth.
A too-polite candy aisle is not doing the confectionery category any favors. What it really needs—shouts and screams from creative retail front lines and sidelines—that’s where the true potential lies for sweet treats, according to a new industry research project dubbed “Opportunities for Confectionery Growth” and sponsored by the National Confectioners Association (NCA).
Consider the retailer with a candy aisle that is clean, colorful, properly plan-o-grammed, in stock, and managed by a top supplier. Sounds impressive, but in today’s marketplace, that and that alone could spell candy stagnation.
That’s because while retailers and their candy suppliers have been busy merchandising the main candy aisles, busy American consumers have had the luxury of dashing in and out of a channel-expanded and more competitive retail arena in snacks and confections. All the while, new shopping patterns are emerging.
New research
Separate from the unfolding NCA project but certainly backing it up in one aspect is a new study from three researchers at the Wharton School of the University of Pennsylvania. Researchers there have concluded that shoppers don’t weave up and down all aisles as conventional retailing wisdom dictated. (The study is titled “An Exploratory Look at Supermarket Shopping Paths” and was written by two Wharton School marketing professors, Peter Fader and Eric Bradlow, along with Jeffrey Larson, a Wharton doctoral candidate.)
Charting data for the first time by radio frequency identification (RFID) tags located on consumers’ shopping carts, the trio found that most shoppers “tend only to travel select aisles, and rarely in the systematic up and down patterns most tend to consider the dominant travel pattern.”
What this means for the candy category is a good majority of today’s candy customers most likely are altogether bypassing the regular candy aisle due to an evolving shopping style: they are on a mission of convenience. 
In a supermarket, that could mean they are running around the perimeter of the store, buying items they need for dinner and leaving. In a drugstore, it could mean they are buying one planned item and quickly moving out of the store and on to their next errand.
Whatever the specific case, they are probably not pushing their carts down every aisle a la “stock-up shopping.” Apparently, those days are winding down to comprise only one-sixth of all retail trips, finds the NCA research. Instead, most shoppers are erratically dashing down an aisle or two for items they need.
Why is this having such a negative effect on the confectionery category, or more accurately, why is it stunting category growth? “Because it’s one consumption category driven by availability—if you see it, you buy it,” begins Ray Jones, managing director of Dechert-Hampe & Company (DHC), the Northbrook, Ill.-based firm that is conducting the comprehensive research on behalf of the NCA.
Less candy exposure
“The more these shopping trips become convenience-oriented, the less likely shoppers go down every aisle of the store, and the less their exposure to candy,” Jones continues. “As an impulse category, candy is generally not put on shopping lists, so what’s happening is confectionery has lost some of its presence to consumers. And if consumers are only going down the candy aisle once every five or six trips, then five or six times they shop, they don’t see candy.”
While the comprehensive NCA/DHC study isn’t expected to be fully concluded until this time next year, one clear point is already emerging: “We have uncovered that each channel has its issues of what it does well and what it does poorly in the category, but basically, they can all benefit from more points of interruption with candy,” says Jones.
So forgetting any main aisle manners, here are specific ways that retailers can “interrupt” with candy and grow not only their sales, but also the future of the category.
Blend candy with other snacks. “Blurring is our favorite term nowadays,” says Jones, “There’s still channel blurring, of course, but we are also witnessing ‘snack blurring’ as more and more snack products are brought together and cross-experienced: cookies with M&M’s, chocolate-covered pretzels, ice cream with Reese’s, etc.”
This snack blurring of products lends itself to a natural blurring of snack merchandising. “There are opportunities here for more impulse locations with candy,” according to Jones—for instance, near cookies, ice cream, even salty snacks. “The consumer is often driven by wanting to see innovative new items,” he adds. “Retailers should bring in candy at all the various locations where consumers shop for snacks in the store.”
Think more consumables in drug stores. Think drugs are the driver of drug store shopping trips? Think again. While prescriptions account for about 25 percent of drug store shopping trips, consumables have now emerged as the leading driver with, surprisingly, more than a 29 percent shopping-trip share, according to just-released research by Dechert-Hampe for the NCA study. The problem is, heretofore the traditional drug retailers only have “one or two merchandising points for candy—one in a candy aisle and one at checkout,” according to Jones. His suggestions for other merchandising points—at the photo lab and near the pharmacy counter.
“Maybe some drug stores only sell low-sugar candy at the pharmacy counter, but we’re recommending to retailers that the pharmacy is the place where you know you have 25 percent of your customers, you have such an opportunity to sell other consumables there,” maintains Jones. He says part of the fear is that the pharmacy is currently thought of as “a sacred place where customers don’t want to be merchandised to, but we find from our studies that, in fact, customers don’t feel that way.”
Consider making a quick buck. With candy as the top-selling category in dollar stores, other retailers might fear losing sweet sales to this burgeoning channel. But actually, Jones reports that “there is no evidence that sales of candy in dollar stores are cannibalizing candy sales in other stores. It’s an incremental purchase. Dollar store customers are not thinking that they bought candy yesterday at the supermarket, so they’re not going to buy it today at the dollar store. It has a short shelf life, and it is usually consumed in a short period of time after purchase in this channel.”
So, therefore, the logic is that if other stores wanted to copy the dollar store concept in specified areas of their non-dollar store, candy sales there would not cannibalize candy sales in other areas of the store. 
Pay attention to the C-store single candy bar scene. The convenience store channel has been praised by Jones and the study for its effective merchandising of single candy bars. “Singles are located in several places—in-aisle, at checkout, in a free-standing display, near sodas, near the food service bar, near the coffee bar, in the freezer coolers, etc.,” he maintains.
“Other channels would do well to bring candy at more points of interruption during the shopping trip. The C-store has properly grasped the concept of candy impulse opportunities relative to their consumers.” It is even more impressive when one considers how little space the channel has relative to others.
Pair wine with candy. Quality Food Centers in Seattle (a division of Kroger) is just one upscale food retailer that has positioned chocolate for sale in the wine department. Last year the company had a program whereby wine stewards (who were present in all stores) came in for lessons on chocolate so that when customers came in to buy a bottle of wine, they could also sell them upscale chocolates from suppliers such as Lindt.
“What supermarket is not selling wine today?” offers Jim Corcoran, vice president of trade relations for the NCA. “We’ve seen this in Germany—chocolate goes very well with a Cabernet, so why not sell the two together at retail.”
Candy retailers are all familiar with the success of limited-edition candies that have hit the marketplace. But is the success of those products due mostly to the fact that they are interesting, novel items or due to the merchandising approach retailers take with them in-store? “We think the latter,” say Jones.
“Retailers are getting them out in front of consumers; they are being merchandised as the true impulse items they are.”
Pick the occasion. Occasion-based marketing is an idea that “we need to fit candy into the occasions people have in their lives,” says Jones. That can be as simple as birthday parties, anniversary celebrations, and even business meetings, but it can also include Super Bowl get-togethers, summer outings, the Olympics, or even an Oscar Awards TV party night.
What that means is perhaps positioning “picnic-friendly” candy for the summer, breath mints to the business executive who frequents meetings, red, white and blue candy at Fourth of July, and wrapping up gold, silver and bronze candy for Olympic-time.
“Not everything is going to work, but it’s an attempt to fit candy in with people’s lives, rather than trying to force it on them unnaturally,” Jones adds. “The confectionery industry is lacking here; it needs to look at what people do in their lives, especially at different times of the year, and associate those times with candy. We want candy to be ubiquitous in people’s lives. A lot of it will be theatrical. And if there’s not an easy candy to associate with an occasion, then let’s create a new confectionery product.” n
Toy Store ‘Adopts’ Ingenious Merchandising
Since when can consumers visit a nursery, a pet store, a rainforest—all at once—and perhaps walk home with a newly adopted baby, pet, or wild animal? When they stroll through Toy Soldier toy store in Libertyville, Ill., these three experiences (and more) await shoppers, who now come from all parts of the country to "shop" this vastly different toy store, which positions dolls as adoptable babies and stuffed animals as adoptable pets. It even sells some candy creatively (as birthday gift package toppers).
Other retailers, too, come from miles to observe the unique merchandising talent of owner Joanne Cicmanec, who perhaps has a distinct advantage to look at the toy business through a child’s eye or the child in all of us. After all, she is also the mother of six children.
"This is my way of setting the store apart from others," she explains. "I wanted realistic experiences that would entertain my customers—young and old. My toys don’t just sit on a shelf."
Indeed, they do not. The most profitable area of the store, as well as the largest attention-grabber—is the nursery. Cicmanec, with the help of women employees who are dressed like real nurses, operates a toy store version of a baby nursery that is typically found in the maternity ward of a hospital. So a customer who wants to buy an infant doll, actually ends up "adopting" a "baby," and goes through a half-hour-long "adoption" process that is quite realistic, much to their delight, according to Cicmanec.
"They can always go to Toys R Us to see a doll on a shelf, but when they come into our store, customers spend time being taught how to hold the baby by a ‘nursing’ staff that wears white jackets and has stethoscopes around their necks," Cicmanec explains. "The dolls are in clear rectangular boxes that resemble cribs you might see in a hospital; we put little blankets over the babies, and some are holding teddy bears and pacifiers to make them look alive."
Beyond that, the nursery section has a CD playing in the background—with infant newborn sounds and cooing, of course.
The nursery is on the ground floor of the store. To lure customers upstairs, Cicmanec has created a pet shop in one room and a rain forest in another. Once again, customers can "adopt" "puppies" or "kittens" from a realistic-looking "pet shop," complete with animals in different-sized cages on a wall filled with Plexiglas display cubes. Hamster water bottles are put into the cages, and animal noises–of puppies, kittens and birds—are again emitted from a CD.
The jungle area is very similar, only with jungle scenes and jungle noises.
"My sales have doubled and tripled since I created these experiences," says Cicmanec. "And it’s all because the merchandise is not just sitting there on a shelf. When anyone walks through the front door, we tell them to ‘go play.’ When they leave, many tell us they felt like a kid again."
A Tobacco Take on Best Practices
No industry is immune to the pressures of a changing retail marketplace, least of all tobacco. Over the past several years, traditional tobacco retailers have been hit hard with stifling state taxes, choking manufacturer contracts, and intense competition from the Internet, Native American reservations and illegal players who are all beating them on price.
While many are hanging on, a select few know that the only way to thrive in any industry is to constantly reassess it. For 10 years, that’s exactly what Tobacco Depot, based in Tampa Bay, Fla., has done, and it has consequently developed a new store concept with a premium cigar personality that engages in premium retail practices that any retailer can learn from.
"Over the years we’ve gotten better and more knowledgeable about premium cigars, and built up a solid base of 14,000 cigar club members," maintains Fred Hoyland, president and owner of Tobacco Depot. According to him, these cigar smokers are very dedicated to Tobacco Depot due to the way the company has developed, expanded, and come to understand their specific needs. Becoming a cigar club member at Tobacco Depot is free of charge. All customers have to do is sign up with their name, e-mail address and other pertinent data.
As a Tobacco Depot cigar club member, customers are entitled to special cigar discounts and to attend special cigar events—both in the stores and at outside locations such as ballgames and breweries. All members also receive the company’s quarterly premium cigar club newsletter, "Smoke Signals," offering additional coupons from a premium cigar vendor sponsor.
With all the information and feedback that Tobacco Depot received from its club members, Hoyland knew it was ready to venture out into an expanded cigar store concept last summer in its 18th store location in Sarasota, Fla. The new store’s private smoking lounge features "luxurious" seating, according to Hoyland, an air filtration system, and a giant HDTV. Through glass, customers can see the store’s "huge" walk-in humidor with a lot of windows and an expanded selection of fine cigars. There are also humidified personal cigar locker rentals.
"We made this area a store-within-a-store look. The humidor features a cedar door and cedar canopies," explains Hoyland. "One entire wall is cedar-lined and shelved; there is an all-wood floor. Most of our stores have a humidor but this one is very large with a separate smoking room that can be seen through the opposite wall of glass from the humidor. The room has seats for seven people to go into and relax without being annoyed by store noise."
The area was an instant success—even with surrounding area shop managers and customers. "Right next door is a high-priced ladies’ dress shop with high-line clientele—it’s been there for years," says Hoyland. "So even before we opened the store, we went in and introduced ourselves to the store manager and told her about our cigar store. She immediately told us she would be happy to come over and have a cigar. Now that we’re open, she and many of the women that work there, as well as some of their customers, come over to relax in our cigar lounge."
The staffing has also been matched to the new store’s premium cigar focus. "We put in stronger cigar people with more knowledge of the product category," maintains Hoyland. "We knew we couldn’t hire someone as we would in a regular outlet and just stick them behind the register."
As Tobacco Depot moves forward, Hoyland expects they will probably open more stores like this new one, "but we have to be very selective," he stresses. "We looked at premium cigars because we had a strong customer interest and not many other retailers were selling them to any degree. Now, we know we have the right model, we just have to continually tweak it."