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November 30, 2015

Fighting Back With Facts

By Jerry Lynch, President, IPDA

Mars Inc., owners of the Mars and Wrigley candy and gum brands, recently launched a media push. The stated objective is to increase sales of impulse items.

The unstated but nevertheless clear objective is to position some of its consumer research findings as the basis for increasing retail display space for (you guessed it) candy and gum.

For more specifics, I refer you to the summary item in today's [11.30.15] IPDA Daily News, which includes links to Food Business and Chicago Tribune articles about Mars' "insights."

For our purposes here, suffice it to say that a couple of Mars' core points are both valid and obvious. One is that while the checkout remains the biggest impulse-sale area, consumers are also now checking out in pharmacy and other store departments, as well as on their mobile devices. Also, click-and-collect grocery buying will reduce trips into stores (and impulse-buy opportunities) over time. In short, there are more, as Mars calls them, "transaction zones," and it makes sense to try to increase the sales of impulse items in all of these areas.

So far, so good. But then the Mars/Wrigley PR machine goes on to explain that three supposed "mindsets" relating to checkout (wherever checkout may occur). And that (in a self-serving leap of logic) the so-called "refresh" and "reward" mindsets somehow demand that all but 10% of transaction space is devoted either to items "like gum, mints, beverages and snacks," or items "like chocolate and non-chocolate candy." As for the last 10% of transaction space, that should be devoted to "remind" items (the third "mindset"), "like batteries and lip balm," declares Mars Inc.

As The Chicago Tribune points out, the confections company isn't offering a lot of information on the specifics of its transaction zones strategy. More jarring is the blatant omission of magazines—indisputably one of the three checkout power categories—in Mars Inc.'s pronouncements about how retailers should use their space.

The reality—as documented by the Willard Bishop Total Solutions SuperStudy of June 2015, as well as other retail research—is that the magazine category continues to outperform candy (and other categories) at checkout in terms of profitability.

Magazines generate 4X the gross profit ($1.64 per unit) of candy at the front end, and each magazine generates 5X the revenue per SKU as a candy SKU. (In addition, the magazine category is close behind candy in terms of the percentage of front-end checkout sales generated, per the Bishop study.)

In fact, magazines are the most profitable item at checkout ($1.07 true profit per unit), period. Importantly, they also rank 14th in true profit per unit across 229 total store categories.

As for consumer mindsets, other research has shown that magazines are #1 on women's list of affordable treats, and that 24% more shoppers say it's more important to carry magazines than candy at the checkout.

In my view, the Mars push should be taken as a call to action. In response to competitors' intensifying efforts to secure more retail display space, magazine publishers, NDs and distribution partners should all be intensifying our own efforts to shout our category's documented strengths from the rooftops.

We should be creating opportunities and platforms to convey magazines' unparalleled checkout performance stats to retail decision-makers, as well as making this a standard part of our business contacts, so as to retain our well-earned place at checkout and position our category for its rightful place in other "transaction zones."

A succinct and powerful comparison of the independent research stats on the checkout performance of the magazine category versus the candy category is among the many tools already available on the IPDA website. That one-sheet summary, prepared by an IPDA magazine industry task force, is available both in handout and slide formats.

Please review and download this tool—as well as the others—and consider how you and your teams can use them to enhance the effectiveness of interactions with our retail partners.

Turning to another notable initiative by a competitor, I would also strongly recommend reading the summary of Hershey's "touchpoints" research and initiatives in CPGmatters (again, this one's summarized in the 11.30.15 IPDA Daily). 

It's important to be aware that a major candy company is testing a variety of media platforms to influence consumers, both pre-store and in-store. Equally important, this effort just might provide some inspiration for touchpoint tests for our own category.


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Nov. 30, 2015
  Fighting Back With Facts
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