What did you buy online last week? If you are like most people, you’ve become accustomed to purchasing books, clothes, shoes and concert tickets online. On top of that, we custom-design our TV viewing experience by accessing “play it now” streaming media sources like Netflix and HBO Go.
I recently visited the do-it-yourself store, Home Depot. Guess what I saw nestled between the tools and 2by4s? Toilet paper!
Sandpaper or Toilet Paper
I know, this sounds confusing, but it was no accident that I stumbled upon toilet paper beside the sandpaper at the home improvement store! Home Depot is betting on consumer staples to boost sales and pull shoppers into their stores.
Sales of electronics and office supplies have moved online, but soap and paper towels generally haven’t, making them good for foot traffic.
When I visited Best Buy, I found the usual laptops and headphones. And I also found I could buy Keurig coffee pods and Tide.
At Staples, you can purchase shaving cream and deodorant when you stop to pick up more pens or legal pads. It seems the lines are becoming blurred.
Staples’ marketing executive, Alison Corcoran said they are reinventing themselves to align with changing consumer tastes.
“Some of the new products are traffic drivers, others are a convenience play.” –Alison Corcoran
Ms. Corcoran said, “We are trying to establish new patterns with our shoppers, who might be buying those paper towels somewhere else.”
Best Buy has a similar strategy to use consumables (Tide, coffee pods, and home soda machine supplies) to bring back customers who once stopped by every week to buy compact discs, movies, and ink cartridges.
These planned visits increase the likelihood shoppers will pick up other items while in the store.
Best Buy calls this strategy “floor optimization”. Staples call it “Beyond Office Supplies”.
Every retailer should consider this merchandising strategy because of the following two trends.
Shrinking foot traffic
The first trend, according to market research firm, Nielsen, is a permanent decrease in foot traffic at retailers . This drop in conventional retail shoppers is caused by Americans’ preference toward online shopping.
U.S. shoppers made 3.8% fewer shopping trips in 2013 than they did a year earlier.
Consumers cut back trips to stores mainly to spend less money on gasoline.
Stagnant unit sales
The second trend, according to Nielsen, is that overall unit sales of consumer products have posted little or no growth in U.S. for the past three years.
This trend drives consumer products companies to look for new ways to sell and distribute their products.
Nick Vlahos, chief customer officer at Clorox Co., said “home improvement retailers are an important source of sales for the company’s bleach, disinfecting wipes and Glad trash bags.
Clorox also found when shoppers buy barbecue grills, they tend to pick up bags of Kingsford charcoal, a product the company makes, which I saw while I was in Home Depot.
U.S. retail president of Home Depot, Craig Menear, said their push into consumer staples came by accident…
He said employees in the garden department noticed cleaning supplies would boost the division’s sales in the winter and suggested giving them more space.
So Home Depot worked with Procter & Gamble Co. to understand how to add cleaning supplies to their offerings. They also plan to launch their own laundry detergent under its HDX label.
When there is a trend occurring in the marketplace, I’ve learned it’s best to proactively consider how my company can “catch the wave” created by the trend.
Many times, you can apply the same insights to your organization, even if you are in a fundamentally different business. Hint: This trend has ripples that go beyond traditional retail.
Have you noticed this trend where you shop? What type of paper did you buy the last time you shopped at Home Depot?