3 Ways to Pump New Life into Your HBC Business

Proven merchandising strategies that increase sales and profit

 

September 2018

 

According to a Lil’ Drug study on the reasons shoppers purchase HBC at convenience stores, the convenience of being close to a c-store and being able to get in and out quickly is one of the most cited reason as to why consumers purchase an item at a convenience store rather than another retailer.  So if c-stores can deliver convenience while optimizing other marketing factors, such as product mix and merchandising, they can expect results to follow.

 

Successful retailers often take a fresh look at the Health and Beauty Care (HBC) assortment and are willing to try new approaches to c-store merchandising strategy. Lil’ Drug Store Products (LDSP), the #1 HBC supplier to the convenience channel, has worked with retailers of all sizes to develop effective category management strategies. LDSP shared three different strategies that delivered the same end-result—increased sales and profits, while maintaining efficiencies that c-store shoppers demand.

 

Strategy 1: Make HBC Easy to Find

In the first case study, LDSP recommended upgrading from a relatively small assortment of HBC products at the front counter to a permanent inline shelf set. This strategy gave consumers a broader selection of HBC solutions, enabled easier shopping access and increased awareness.

 

For shoppers coming in for a specific health and beauty item, products were quick and easy to find. The increased visibility and improved access generated incremental sales, as retailers who were not previously thinking to buy HBC products at a c-store were now more aware of the availability of pain relievers, cold and allergy remedies.

Retailers who have employed this strategy not only increased sales, they also exceeded their budgeted gross profit. In one case, a retailer increased profit by 4.5 times in the first year alone.

 

Strategy 2: Offer Value

Ask yourself what you want your HBC shelf design to accomplish and then make it happen by using category management best practices. What are the benefits? Lil’ Drug’s experience shows that a well thought out retail planogram strategy can result in increased visual appeal, more effective communication to customers, tightened inventories, improved product positioning within sub-categories and greater productivity within the space.

 

As an example, LDSP worked with a Top 50 c-store chain to create an HBC shelf schematic that moved larger packs of value brand products from the bottom shelf to eye level on the top shelf.  This alignment encouraged some shoppers to trade up to the higher dollar value packs, which contributed to more than 10% category dollar growth for the retailer compared to the channel average 2% category growth versus the prior year.

 

Strategy 3: Optimize Assortment

In some channels, giving customers a plethora of product forms, pack sizes and formulations to choose from might be good for business. However, space and time is more limited in c-stores so multiple consumer options may not be feasible. Offering too many choices can sometimes be confusing to consumers and makes the HBC category more difficult to shop. Therefore, it is important for the c-store retailer to focus the assortment on the most productive SKUs.

 

In this third case study, LDSP recommended that a regional c-store chain eliminate middle tier price points. The retailer concentrated on meeting the needs of the price conscious and value oriented shoppers. The absence of a middle price point did not deter shoppers from trading up to higher dollar ring, multi-dose options. In fact, this retailer gained more than 20% dollar growth after eliminating the middle price point SKU while unit sales remained unchanged compared to the prior year.

 

C-store retailers have limited space, so it can sometimes be a challenge to increase sales and profits. Fortunately, several tried and true merchandising strategies simply require a different perspective to generate growth. Consider trying one of the proven techniques described above to increase HBC sales and profit at your stores.

Healthy Snacks Attract New Sales

 

June 2018

 

Convenience-store operators plan their stores so that when customers come in looking for a snack, they’ll have no trouble finding an array of chips, candy, sodas and other tasty treats. But when it comes to appealing to consumers who want a healthier snack, stocking shelves with better-for-you options can be a great way to increase sales.

 

More people are looking for healthy snacks

A July 2015 study from Brandware showed that 72% of consumers prefer to buy healthier snacks.  Nowadays, shoppers have more options to choose from, including freshly prepared hummus and veggie cups, fruit cups and grab-and-go yogurt. Some consumers still think that c-stores don’t offer enough healthy snacks, though. To change the mindset that c-store don’t have enough options, retailers need to make these snacks highly visible in their stores—that can include placing them on endcaps or displays, where shoppers are more likely to notice them.

 

In the realm of shelf-stable options that are convenient and easy to eat, snacks such as Popchips have been gaining traction. Touted as having all the flavor but half the fat of regular fried potato chips, Popchips are a nonfried chip that offers a familiar taste in a better-for-you package, which is perfect for snackers looking for healthy options.

When they reach for a snack at a c-store, consumers who want something healthier often choose fresh fruit, wellness/protein or granola bars, trail mix or jerky. Alongside these snacks, lower-calorie, lower-fat and more natural versions of snacks that consumers already love, such as chips and popcorn, are on the rise.

 

What does ‘healthy’ mean?

The Brandware study showed that the healthy attributes most important to consumers included all natural, non-GMO and high protein. Retailers looking to increase sales of healthy snacks should stock items that fit those criteria.

Retailers should also stock shelves with snacks that offer benefits such as all-natural ingredients, no trans-fats, no artificial sweeteners or flavors and fewer calories than traditional snacks, as well as options that are non-GMO and high protein, in order to boost sales of healthy snacks.

 

Appealing to more consumers, boosting sales

Retailers know they have what consumers want in the realm of indulgent snacks such as baked goods or chips, but for customers who want grab-and-go options that are convenient and delicious but not too indulgent, it’s important to stock alternatives. In the Brandware study, 75% of c-store shoppers indicated the wanted more variety of healthy snacks. If consumers still think that c-stores don’t have the healthy snacks they’re looking for, they’ll go elsewhere—like their local supermarket—to purchase those snacks. The Brandware study showed that shoppers said they would buy more often at c-stores that had a good variety of healthy snacks. C-stores can boost incremental sales by changing that mindset, which can be done through product promotion, including signage, and placement of healthy snacks in highly visible spaces within the store.

 

Once consumers see that they can get the same snacks at a c-store that they can at a grocery store, they may stop in to pick up a snack more frequently. Signage that promotes new, healthy items can boost engagement, as can marketing the new healthy snacks as a tasty, healthful alternative to products consumers already love.

 

3 Way to Pump New Life into your HBC Business

Proven merchandising strategies that increase sales and profit

 

November 2017

 

Brought to you by Lil’ Drug Store

 

According to the Technomic C-store Market Brief, the ability to get in and out quickly is the most cited reason as to why consumers purchase an item at a c-store as opposed to other classes of trade.  If a retailer can deliver convenience while optimizing other marketing factors, such as product mix and merchandising, they can expect results to follow.

 

Successful retailers often take a fresh look at the Health and Beauty Care (HBC) assortment and are willing to try new approaches to convenience store merchandising strategy.  Lil’ Drug Store Products (LDSP), the #1 HBC supplier to the convenience channel, has worked with retailers of all sizes to develop effective category management strategies.  LDSP shared three different strategies that delivered the same end-result – INCREASED SALES and PROFITS, while maintaining efficiencies that c-store shoppers demand.

 

Strategy 1: Get In Line

 

In the first case study, LDSP recommended upgrading from a relatively small assortment of HBC products at the front counter to a permanent inline shelf set.  This strategy gave consumers a broader selection of HBC solutions, enabled easier shopping access, and increased awareness.

 

For shoppers coming in for a specific health and beauty item, products were quick and easy to find.  The increased visibility and improved access generated incremental sales, as retailers who were not previously thinking to buy HBC products at a convenience store were now more aware of the availability of pain relievers, cold and allergy remedies.

 

Retailers who have employed this strategy not only increased sales, they also exceeded their budgeted gross profit.  In one case, a retailer increased profit by 4.5 times in the first year alone.

 

Strategy 2: Go Big to Go Home

 

Ask yourself what you want your HBC shelf design to accomplish and then make it happen by using category management best practices.  What are the benefits?  Lil’ Drug’s experience shows that a well thought out retail planogram strategy can result in increased visual appeal, more effective communication to customers, tightened inventories, improved product positioning within sub-categories and greater productivity within the space.

 

As an example, LDSP worked with a Top 50 convenience store chain to create an HBC shelf schematic that moved larger packs of value brand products from the bottom shelf to eye level on the top shelf.  This alignment encouraged some shoppers to trade up to the higher dollar value packs, which contributed to more than +10% category dollar growth for the retailer compared to the channel average +2% category growth versus the prior year.

 

Strategy 3: Up for the Count

 

In some channels, giving customers a plethora of product forms, pack sizes and formulations to choose from might be good for business.  However, space and time is more limited in c-stores so multiple consumer options may not be feasible.  Offering too many choices can sometimes be confusing to consumers and makes the HBC category more difficult to shop.  Therefore, it is important for the c-store retailer to focus the assortment on the most productive SKUs.

 

In this third case study, LDSP recommended that a regional c-store chain eliminate middle tier price points. The retailer concentrated on meeting the needs of the price conscious and value oriented shoppers. The absence of a middle price point did not deter shoppers from trading up to higher dollar ring, multi-dose options. In fact, this retailer gained +20% dollar growth after eliminating the middle price point SKU while unit sales remained unchanged compared to the prior year.

 

Conclusion

 

Convenience store retailers have limited space so it can sometimes be a challenge to increase sales and profit.  Fortunately, several tried and true merchandising strategies simply require a different perspective to generate growth.  Consider trying one of the proven techniques described above to increase HBC sales and profit at your stores!

Healthy Snack Trend Continues to Grow

Opportunity for Healthy Snacks at Convenience

 

May 2017

 

With consumer wanting to find healthier snacks in c-stores, it is important to start providing healthier snack options in your store. Convenience channel shopper research identified several key insights regarding healthy snacks:

 

• 65% think that c-stores do not have adequate selection of healthy food choices

• 79% of millennials (ages 25-34) wish c-store carried more healthy snacks

• 80% like to try new healthy snack types

• 66% said they would pay more for healthy snacks

• 64% would buy more products from c-stores that offered healthy snack choices

 

Start providing a unique variety of healthy and great tasting snack choices to convenience store shoppers! Do this by creating a Healthy Snack Center. Here you can discover unique and delicious all natural snack alternatives. In addition, offering healthy snack choices calls for incremental growth. With a healthy snack center, you can appeal to consumer groups that is essential for c-store growth. Research shows that offering more “better for you” alternatives could increase convenience store sales with these key consumer groups: millennials (25-34 year olds), women, and natural supermarket shoppers. Also, incremental display space enables c-stores to offer healthier snack choices without alienating the core c-store shopper.

 

There are many benefits a retailer has for offering healthy snacks:

 

• Healthy snack center offers incremental shelf space

• Pre-selected assortment of unique, great tasting healthy snacks

• Capture greater share of “better for you” snack purchases

• Improved consumer perception of convenience store chain

• Increased purchase occasions from key consumer groups (e.g. Millennials)

• Higher dollar ring = more dollar profit.

 

In the last year, Lil’ Drug Store has started offering a variety of healthy snack options. Early this year, they launched Harvest Snaps. These snacks are great tasting, crispy and light pea-pod shaped salty snacks. They are baked, not fried, and made from whole peas. Harvest Snaps is a $100MM retail sales brand and has seen dollar sales growth of over 35% vs. LY in all outlets (Wal-Mart, Target, Grocery, Costco).

 

Another new addition to their healthy snack lineup is Sensible Foods Crunch Dried Fruit. Sensible Foods picks fruits at the peak of ripeness and “crunch dries” them to create a flavorful, crunchy snack. The crunch dried process is a proprietary hybrid between freeze drying and low moisture dehydration. The unique blend of the two processes creates an incredibly flavorful taste and crispy crunchy texture and retains an exceptionally high amount of the fruits nutritional value. Sensible Foods Crunch Dried fruit snacks are available in a varied assortment of delicious flavors. Sensible Foods Crunch Dried Fruit delivers 2x the sales and has better taste, texture and variety of fruit snacks than any other brand.

 

With 75% of c-store shoppers wanting a greater selection of healthy snacks, Lil’ Drug Stores new healthy snack products are the perfect addition to your store! Stock up today!