For a retailer, maximising every square inch of store space means more money to buffer the thin margins the business affords. So while shelves and aisles have traditionally been the revenue generating areas, a new space is emerging as a source of revenue for retailers and as a battleground for marketers vying for customer attention.
It is the cash till space, or the area near the cash counters in modern trade formats. From the time when checkout counters retailed purely ‘impulse purchase’ products like chocolates and candies, today the space near cash counters is overflowing with a plethora of brands, across categories. Soaps, shampoos, shaving products, movie DVDs, magazines, foods, beverages — it’s a free for all to grab the limited space around cash tills.
And while brands obviously stand to gain, it’s the retailers’ cash tills that have started ringing the loudest, with the space acquiring a ‘premium tag’ over other areas within the store.
It’s a naïve and simplistic thing to say that the customer has only small change and only impulse purchases can happen here. If one can offer great deals and innovative pricing, a higher ticket size sale is possible.
CDs/DVDs, therefore, are a good option beside the usual range of food products. Also, the average price of these products is higher than the conventional food range retailed at cash tills. The footwear format of Reliance Retail, says that even accessories like Hi-Design hand bags are being retailed near the cash counters of the format.
During peak shopping hours, the waiting time can stretch to 15 minutes. So brands have realised that the area is now an important catchment inside the store.
Fuelling this battle for POS space is the changing definition of impulse purchase, which has got brands normally not seen in this space fighting it out with traditional ‘impulse’ brands. Marico, for example, has used the checkout space for its functional foods brand. Concept selling for such categories is necessary. It has to be within arm’s reach of the customer to tempt her to pick it up. And in the time to come, more brands will look at moving into the impulse purchase space. The trick is to try and provoke the consumer to pick it and drop it in the trolley.
Today, impulse purchase is no longer about low pricing, but more about indulgence. From a small bar of chocolate to an expensive perfume, every brand is attempting to satiate indulgence. Also, the density of shoppers at the aisle is lesser compared to the traffic at the checkouts, so one is witnessing a mad rush.
Brand marketers are realizing that smart innovations in display merchandising and price promotions fetch not only higher brand recall, but also drive higher off takes. You have captive eyeballs, so you can catch the customer’s undivided attention if you are well-merchandised at the check out counter. If she has missed the product at the category space, checkouts give you the second chance.
Saying that the fight for checkout – counter space is fierce is putting it mildly. So, for instance, the manager of one beverage brand refused to share any information about the kind of initiatives the brand has undertaken with specific chains.
It is with a great deal of effort that the key account sales team has been able to edge out other players from POS across various modern trade chains. Not that the revenue potential of the space is lost on the retailers they are the ones already dealing with brands making a bee-line for the limited area.
Brands are rushing to check-in at the checkouts without sparing a thought to optimisation. It is a period of evolution of modern trade in India, and things will eventually acquire a sense of sanity.
Even in New York, the typical supermarket does more business at its checkout stands than in its detergent aisles. This space has become so important that retailers globally now consider this as a separate department, with its own category manager. In the Indian context, global retail entrants already have separate buyers for these locations, with whom we have to deal separately.