From screens to shelves, direct-response is a hit
Move over Snuggie and ShamWow — more direct-response products are coming to retail.
“Over the past five years, there’s been an explosion of these products at retail,” said Tom Haire, editor of Response Magazine, a publication that covers the direct-response industry. “Retailers see products that fly off the shelves because they’ve been advertised so heavily, and manufacturers see an opportunity to extend the life of the brand.”
A recent article in Response predicted that products that have a retail component built into their distribution plan likely will be most successful in 2011. Those products touted in two-minute spots that carry a retail price of $19.99 or less will be winners at retail, according to Haire.
Retail sales account for about 95% of the blockbuster Snuggie’s sales, according to Allstar Products Group. “Products sold on TV are going to retail quicker than ever, some in as little as 60 to 90 days” said Peter Koeppel, president of Koeppel Direct.
With plenty of products to choose from, retailers are increasing the number of “As Seen On TV” products they carry. Drug chains are devoting endcaps and permanent sections to the category.
One industry expert predicted that the product segments likely to be the most successful in 2011 will be the “old standbys of home appliances, fitnesss, diet and beauty.”
Foot care has been particularly hot, according to Jordan Pine, president of SciMark Corp. Telebrands’ successful Ped Egg is being followed by IdeaVillage’s EasyFeet, one of the company’s hottest launches. IdeaVillage also has added a new HD Vision product to its successful line. The new HD Aviation, which ships in March, will retail for $9.99.
The article above is part of the DSN Category Review Series. For the complete As Seen On TV Buy-In Report, including extensive charts, data and more analysis, click here.
THE STORES: CCR and the best of Duane Reade
The CCR foundation has been laid. Now comes the next phase in Walgreens’ campaign to “enhance the customer experience.”
Customer Centric Retailing is rolling across the chain’s coast-to-coast store network like a tide. The effort — aimed at aligning Walgreens’ mix with what its customers really want from the stores; eliminating hundreds of redundant, slow-turning SKUs; and boosting front-end productivity — already has transformed more than 2,100 Walgreens stores. Another 3,400 are up for renovation by the end of this year.
But that’s just the beginning. CCR is ushering in a more creative and more flexible approach to the front end. Among emerging areas of opportunity are enhanced beer and wine selections, expanded fresh food assortments, a beauty aisle makeover and more private-brand items.
“We continue to expand our new beer and wine convenience category,” president and CEO Greg Wasson told analysts on Dec. 22, 2010. “We’re now in nearly 5,000 stores, up from just under 2,000 in November 2009, and that growth has contributed more than 75 basis points to the front-end comps.”
The expanded fresh foods concept thus far is aimed at “food desert” neighborhoods in urban areas. But Wasson sees “tremendous opportunity” for “food oasis” stores across the United States, and said the company could expand “Fresh” to 400 or more stores in the next several years.
Walgreens is pouring roughly $50,000 into each store it renovates to CCR standards. The return on that investment is a little slower than anticipated, Wasson acknowledged, but he said the massive merchandising overhaul is beginning to pay off. “In fact, the overall performance of our CCR pilot stores is getting better and better as we continue our refinements,” he added.
The primary goal is to boost customers’ shopping baskets. Last year, the average Walgreens shopper bought about three items per store visit, noted CFO Wade Miquelon. “If we can get that up to four or four-and-a-half items … that would almost double the profitability of the entire company,” he asserted.
It’s about leveraging the company’s unmatched market penetration and its thousands of prime store locations, said Bryan Pugh, VP merchandising. “Once you have the best corners, it’s up to you to make sure they’re relevant,” he said earlier this year.
Walgreens’ purchase of New York-based, 257-store Duane Reade last year was a market share and expansion coup, vaulting the chain to the top of the Big Apple drug store hierarchy. But it also opened a bonanza of fresh ideas for Walgreens’ merchants. Wasson said Walgreens will “study and capture [Duane Reade’s] learnings as we go forward.”
That includes Duane Reade’s successful loyalty card program — some elements of which are being grafted onto Walgreens’ fledgling card program — and the chain’s “Look Boutique” beauty departments, which are beginning to be applied to Walgreens stores in several markets.
To see the Walgreens CCR photos, click here.
Schnucks to host Frieda’s Produce University
ST. LOUIS — Supermarket chain Schnucks Markets is partnering with produce wholesaler Frieda’s to educate shoppers about citrus fruits.
The retailer said all of its Schnucks and Logli stores in Missouri, Illinois, Indiana, Wisconsin, Iowa, Tennessee and Mississippi would host Frieda’s Produce University, an eight-hour, open-house-style event on Saturday that will feature staff to teach shoppers how to prepare and eat various citrus fruits and free samples. The session will cover exotic varieties, such as Meyer lemons, pomelos, blood oranges and kumquats.
“Frieda’s Produce University is a great way for Schnucks produce teams to show off their expertise and knowledge while educating shoppers with a fun, hands-on event,” Frieda’s VP Jackie Caplan Wiggins said.