Perimeter-Style Thinking to Re-energize Center Store

We all know how exciting and interactive the perimeter of a supermarket can be. That's because it offers shopper solutions merchandised just the way customers want them. But, unfortunately, that's not the way it's been working in the center store where merchandise presentations are frequently lackluster and predictable. The issue is no small one. Center store accounts for 73 percent of store sales, according to the Nielsen Company, and 77 percent of profits but doesn't seem to be able to generate growth, which makes it a dangerously declining asset.

It's estimated that $23 billion of center store sales dollars are currently fading away due to lost trips caused by lack of shopper appeal. The center store is currently not meeting the consumer’s expectations. Consequently, some industry participants are now looking to apply perimenter-style thinking to center store's in-line gondolas. That thinking calls for a new model based on consumer demand and featuring innovative formats and improved customer experiences -- just like on the perimeter.

The new model, developed by The Nielsen Company, Nestle Purina and other major CPG companies, looks at the total store, not just the perimeter and not just center store in isolation. Even more importantly, the new model involves a shift away from category management and its supply-side emphasis to shopper management to fulfill mission-based shopper demand. The authors expect that more productive formats and better customer experience will quickly follow the application of mission-based solutions for shoppers.

The new model will help retailers deliver fully integrated meal or event-driven store sections, such main meals, snacks/desserts, seasonal/holiday, and party, frequently using fixturing like permanent theme solution endcaps. A key element is leveraging technology as effectively as possible. Suggested methods focused on convenience, information and a better in-store experience include: in-store kiosks to convert lists to shopping road maps; cart-mounted product locators; coupons loaded on loyalty cards; and smart phone apps. But perhaps more to the point, retailers can establish other mission-driven store sections and programs based on center store core categories, such as pet, HBC, home cleaning, or entertainment. For example, one potential program in pet is offering free veterinarian prescriptions for pet aisle shoppers.

The impact of mission-based solutions founded on shopper management analytics can be dynamic. Take the pet department, for example.  A 5 percent lift in pet products from applying mission-based shopping solutions can increase center store sales by $30-35 million and gross profits by $6-7 million, based on Nielsen data. That would certainly be a good start to recouping sliding center store productivity.

A Free Resource for Retailers:
Learn about the benefits of applying shopper management analytics to create mission-based shopper solutions in center store by downloading Changing the Thinking on Center Store from The Nielsen Company and Nestle Purina. Use the form below to download your copy...

Coming In Future Tips:
Find out how center store and the pet department can be re-energized with Tips on how shopper management can reinvent key center-store categories such as pet products, and why the pet department is a key driver in re-energizing center store.