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WASHINGTON, D.C. -- Although special-occasion and seasonal candy products can provide a boost, retailers can also improve their category performance by devoting attention to everyday confectionery sales, according to a recent webcast presented by the National Confectioners Association (NCA) entitled "E5: Maximizing Everyday Confections."
The candy category is big business. Confections contribute $32.7 billion to the U.S. economy; household penetration is 98 percent; sales are historically strong and still growing today; and the category has a strong five-year outlook, during which time confections are expected to add more than $6 billion in U.S. sales.
To take advantage of this positive forecast, retailers should focus on everyday candy, which accounts for 78 percent of sales, making it critical to success of the category, according to the webcast. Candy improves key store metrics such as:
• Foot traffic -- High penetration plus strong frequency and purchase cycles.
• Sales -- High buying rate combined with strong outlook for new dollars.
• Retention -- More customers buy everyday confections than seasonal candy.
• Profits -- Everyday candy is also more profitable than seasonal, especially at the front end.
To assist retailers, the NCA narrowed the ideal approach to category strategy down to the "E5" principles for winning every day. They are:
Experience -- C-stores can inspire shoppers and win future trips by making the candy section a fun and memorable experience. "Sensory stimuli can influence environment," noted one presenter. In particular, retailers should play up sight, touch and taste by using vivid colors, attractive displays, in-store sampling and nostalgia.
Emotion -- Stores can capitalize on confections' strong emotional connection, which is a quality not all categories have. By leveraging emotion to drive loyalty, retailers can reap the benefits of emotionally engaged customers who are three times more likely to recommend; three times more likely to repurchase; less likely to shop around; and much less price sensitive.
As the role of emotions changes throughout the day, paying attention to the dayparts is important even for candy. In the morning, confections can help consumers get started on their day; in the afternoon, it can improve focus between meals and tide consumers over until dinner; and in the evening, it provides enjoyment and relaxation.
Effective -- Quite simply, stores can be effective by giving shoppers what they want. Brands are very important in the candy category, as they dominate the purchasing decision tree. More than half of the time, the decision to buy candy is impulsive and consumers are most likely to reach for their existing favorite brands.
However, it's important not to overlook new products, as 30 percent of shoppers report that they always look for new items to try. Retailers should maintain awareness of new trends that can keep the category fresh. Price is the primary factor that drives new item trial in confectionery, followed by sampling, coupons, recommendations and brand.
Efficient -- Getting confections right requires operational excellence, presenters said. The front end is the critical location for candy, but retailers can "think outside the aisle" and create effective points of cross-merchandising due to the impulsive nature of the category. Candy can be paired with flowers, cards, over-the-counter medicine, ice cream and more to create surprisingly effective combinations. Stores should also strive to avoid products going out of stock, as 43 percent of customers reported doing without when their intended confection was not in stock.
Environment -- By understanding the fundamental aspects of the confectionery environment, retailers will be better able to determine how to handle the category. Although it is a relatively recession-proof category, value-based shopping has arisen to some degree. Health and wellness is also a concern, but the majority of consumers believe that candy can be enjoyed in moderation.
Retailers will likely see benefits by focusing their messaging on how customers can achieve this. For example, they could offer 100-calorie packs, fun size candy or individually-wrapped items. They should also keep in mind that America is increasingly becoming a snacking culture rather than sticking to three meals per day.