The humble battery is an item no convenience store operator should overlook, particularly at Christmas.
Not only are batteries a classic example of something people realise they need at the last minute and need to get quickly, but they also provide operators with tidy potential profits for something that takes up very little space. You are not likely to worry too much about a few packs of AA and AAA batteries taking up too much room in-store.
It is, however, a competitive market. Although there has been considerable growth in the overall volume of battery sales, discounters and supermarkets claim a large portion of that market. Nevertheless, figures from sector analyst IRI show a 1.9% increase in sales through convenience stores in the year to 8 September, so there is a definite upward trend.
Impulse purchase
Tatiana Wijeyaratne, marketing manager for Duracell UK, says medium-sized packs of batteries are showing the greatest sales growth, both for Duracell and within the broader market. Packs of eight to 12 batteries now account for nearly half of category sales. She adds that batteries are not a regular purchase and therefore are most commonly bought on impulse. Wijeyaratne says: “Batteries are considered one of the hardest categories to shop, because buying batteries is based on the need to make another object – a device – work. This makes it especially important that your shoppers can navigate the category easily and find the right battery.”
Changing category
She adds that simple measures to increase your sales include putting a recycling bin at any battery fixture, because shoppers are automatically prompted to stock up when they dispose of old batteries. Grabbing these sorts of sales is important, not least because of the competitive market. Duracell believes one easy way to boost battery sales is to get them out from behind the counter and provide a selection that recognises how the category is changing.
Wijeyaratne explains: “Big trends we have seen both emerge and grow over the last year include the internet of things, connected households and – crucially – minituarisation, which we have seen fuelling the demand for formats like the coin battery.” Duracell has also recently launched a range of Powerbanks designed to recharge batteries, in particular for mobile phones, while people are away from their home or office.
Festive focus
The importance of Christmas for the broader battery market is hard to over-estimate, says Wijeyaratne. She says: “With 25% of all batteries being used to power children’s toys and gadgets, and 34% of all batteries being sold over Christmas – 11 million households in the three months leading up to Christmas Day – the pre-Christmas period represents an unmissable opportunity.”
Most manufacturers offer promotional packs to help retailers plug in to this opportunity, including GP Batteries, which supplies packs with extra batteries for free, as well as retail-ready counter displays,
Gareth Wheller, GP’s UK managing director, says discounted packs are a key element for smaller retailers. He says: “Due to independents only being able to stock small amounts and generally stocking the four-pack but selling for full RRP, it makes it hard to compete with the supermarkets and discounters, who generally offer value packs. The benefit of value packs – particularly during peak seasons – is that they can drive sales, as consumers see them as better value.”
Ideal solution
But Wheller is another to stress that convenience stores’ big advantage is exactly what their name suggests – their convenience. He says: “The convenience store offers consumers something discounters can’t and discounters struggle to do – a local shop that stocks a wide range of necessary products. Batteries are one of those items that everyone needs, but they don’t want to go out of their way to get. Popping to your local store when you realise you don’t have any at home is an ideal solution for many.” Wheller believes AAs and AAAs will continue to be the top sellers, but adds that larger packs do better at peak seasons and advises retailers to take note each year of the must-have toys, so they can stock the appropriate-size batteries.
Bigger packs
Hanifa Choudury, sales and marketing manager for Varta in the UK and Ireland, is another who stresses the vital importance of the festive market. She says: “As consumers are looking to purchase bigger packs, there is less emphasis on the price of individual packs, as opposed to an overall promotional price. In 2017, sales of eight-packs overtook four-packs in December, sparking an 8% increase in sales against its average. The same period saw a 7% rise in sales of 12-packs.”
Choudury says one of the key merchandising opportunities for independent convenience stores is in thinking about secondary locations and cross-selling opportunities for batteries. In other words, getting them out from behind the counter. She says: “A staggering two- thirds of all consumer battery purchases are impulse-driven, so shoppers are drawn in by promotional displays or placements next to related products that remind them they have a need. This is especially important in the run-up to peak seasons like Christmas, when batteries are needed for gifts, lights and decorations.”
Retailers take note: batteries might be small, but they can help you have a prosperous Christmas and a more profitable new year.
By David Harris
