More than 660 million batteries will be sold in the UK this year, according to Mintel, as we continue to fill our lives with power-hungry toys and gadgets. The vast majority of these batteries will be bought on impulse, meaning forecourts are ideally placed to serve the instant needs of today’s high-tech consumers. However, the message on this year’s report card reads ’could do better’.
In contrast to other channels, the battery market in forecourts has shown a year-on-year decline of 6.6%, according to the latest figures from AC Nielsen. Sarah Richardson, marketing manager at Energizer, says: "We believe this is due to retailers offering only a limited selection which isn’t meeting consumer’s requirements. It’s essential that forecourt traders stock a broad range, covering value, premium and super-premium batteries."
It’s not all doom and gloom though. The smaller AAA cell size - commonly used in remote controls and MP3 players - has grown by 9.4% in forecourts this year.
By ensuring product ranges reflect the latest developments and by boosting awareness in-store through effective merchandising, forecourt retailers should be able to reclaim those lost sales.
According to Duracell, now is the perfect time to be creating extra displays, with more than a third of the year’s total battery sales coming in the October to January period. The run-up to Christmas always sees heavy promotional investment from the major manufacturers. This year the Duracell Bunny is returning to the screen, facing his toughest endurance challenge yet to highlight the brand’s longer-lasting product credentials.
Martin Gormley, brand manager at Duracell, says instant availability is the key driver for forecourt sales. "People usually buy batteries in forecourts because they have an immediate need - their MP3 player has gone dead, the kids’ hand-held electronic games have run out, or they’re on holiday and need replacements for the digital camera," he says. "Forecourts are expected to be able to cater for this, so the last thing people want to see is empty displays. They are a lost opportunity and those people probably won’t try and buy from you again."
Batteries need to be placed in high-traffic areas in the store where they cannot be missed. While the traditional spot of behind the till is fine, having additional displays elsewhere will help increase sales, says Gormley. "You need to create interruptions around the store. This is an area where some forecourts are currently missing out.
"Batteries are very much an impulse purchase. The more prompts you give, the more you’ll sell. Branded pre-filled displays and clip strips make this relatively easy to do," he explains.
The last couple of years have seen the major manufacturers striving to produce ever longer-lasting, more powerful cells to fuel the latest high-drain portable gizmos. With many forecourt visitors likely to be owners of such power-sapping gadgets, a premium product offering is becoming an increasingly important part of the range.
In 2005 Duracell introduced a new and improved formula for its high-tech Ultra M3 range, which it says boasts the largest share within the premium sector. The best-selling Duracell Plus everyday range was also enhanced.
This year the brand has taken advantage of the continuing boom in digital photography and introduced Duracell PowerPix. The new disposable battery has been designed specifically for digital cameras and uses advanced NiOx technology, a longer-lasting nickel oxy hydroxide formulation.
The cells come in AA and AAA sizes and Duracell says they allow the user to take up to three times as many pictures compared to an ordinary alkaline battery. Gormley reports that the new product is performing strongly across all retail sectors.
Meanwhile, support for Energizer’s Ultimate Lithium batteries this autumn comes via Energizer’s continuing sponsorship of The Gadget Show on Channel Five.
Ultimate Lithium claims to be the most technologically-advanced battery on the market and the longest lasting in high-tech devices. Energizer classes the product as ’super premium’ and says it lasts seven times longer in digital cameras than standard alkaline batteries.
It comes in the most popular AA and AAA sizes and as you’d expect costs twice as much as standard cells. However, the price premium means that retailers earn a better cash margin.
As well as pushing Lithium, Energizer has also just launched a striking counter-top unit and battery package to help retailers boost sales in the run up to Christmas. The deal is that the retailer buys 36 packs of Energizer Ultra+ AA4 batteries and gets 14 packs of AAA4 batteries free, worth £47. The display unit comes with two header cards - ’buy one get one free’, so you can run a promotion if you want to, and ’don’t forget your batteries’. You also get the chance to enter a competition to win a 42"plasma TV.
Energizer marketing manager, Sarah Richardson, says: "The unit is a must-stock for convenience retailers this Christmas, but remember it’s not just AA and AAA batteries that consumers demand around this time of year. To ensure maximum sales, stores need to carry the five core sizes, which include 9V, C and D as well."
Panasonic also launched a special counter display unit for the convenience sector this year, aptly called the Power Station.
It contains 14 packs of Xtreme Power alkaline batteries in AA and AAA sizes and 16 packs of the brand’s entry-level Special Power zinc batteries. What’s more it comes with £10-worth of money-off vouchers for the retailer.
Marketing manager Tim Clark says Panasonic has been driving distribution this year following the launch of premium range Digital Xtreme Power in 2005. Like its competitor’s latest products, the range has been specifically designed for high-drain gadgets and in this case uses Oxyride technology to deliver a longer-lasting performance.
The company also invested in new packaging across its entire range last year and this has recently undergone further tweaking. As well as being more eye-catching, the packs feature product icons to help the consumer choose the right battery for their device. Clark says there are more exciting plans in the pipeline, though he won’t reveal what they are, so watch this space.
Another recent development in the battery market has been the entry of a new distributor. H-Squared Electronics already supplies industrial, commercial and public-sector organisations and has announced it is extending its services to wholesalers and independent retailers.
The company’s commercial director, Tim Champion, says: "We intend to bring the virtues of reliability, availability, value and support, which have been so important to our success, to this market.
"Leading our product offering will be three of the leading names in the world of batteries - Duracell, Varta and Toshiba, which is new to the UK and only available from H-Squared. We are particularly excited about the opportunities that a household name like Toshiba, with its high consumer recognition and reputation for advanced technology, offers the retailer."
Point-of-sale material, stands and promotions, starting with a special introductory offer from Toshiba, will form part of the support package for retailers.
== RECHARGEABLES ==
While forecourts have traditionally focused on single life throw-away batteries, rechargeables are becoming much more mainstream and offer some exciting new opportunities for retailers.
Rechargeable batteries now account for more than 10% of the total market in value terms, compared to less than 3% five years ago, according to Uniross, which specialises in this sector. Simon West, deputy general manager at Uniross, says growth has been fuelled by the increasing ownership of high-drain portable devices and improvements in quality. "The top rechargables six years ago had less than a quarter of the run time offered by today’s products," he explains. "We’ve seen our space allocation grow in the supermarkets and we’ve now moved into the pharmacy and small grocery sectors. Forecourts are in line to become the next big area to embrace rechargeables."
Uniross’ latest innovation, the Hybrio battery, comes fully charged and ready to use straight from the pack, making it particularly suitable for forecourt customers who want instant power while on the move. "It gives the consumer the benefits of an alkaline battery and a rechargeable rolled into one," says West. "Traditional rechargeables lose their power quite quickly when they’re not in use, but we’ve perfected a technology that discharges much more slowly. This means that the Hybrio cell will hold its charge for over a year on shelf and it can also be used in low-drain items such as wall clocks and remote controls."
Hybrio batteries can be recharged more than 500 times and with a working life of around five years, Uniross estimates that the user could save around £1,500 compared to buying replacement batteries.
They come in packs of four AA and AAA, which cost £8.99 and £7.99 respectively.
West also recommends stocking some packs that include a charger, although he says the batteries will work in most existing chargers. These come in slimline, non-bulky packaging to save space.
Another recent innovation is the USBCELL, developed by Moixa Energy. This battery charges from any USB port, eliminating the need for cradles or cables. You simply pop off the lid to reveal the connector and once charged use it just like any normal battery.
It is currently only available on the internet or from Dixons Group stores, although the company is to increase distribution over the next few months.
Energizer is also recommending forecourts tap into the rechargeables market and says its 15-minute charger is an ideal product to stock, as it comes with an in-car charger. A new ultra-compact charger was launched this year and features a sliding bay which can be shut when not in use, reducing its size by half.
While saving money is probably the biggest draw for most consumers, rechargeables have the added benefit of cutting down on waste in these environmentally-sensitive times. This is something that is set to become more important, with the European Directive on Batteries set to come into force in 2008, which will introduce recycling targets to the market.
Manufacturers are playing down the effects this will have and say that the extra costs of implementing recycling schemes will not push prices up. We’ll have to wait and see.
== THE DIGITAL ERA ==
Cameras and film sit alongside batteries in many forecourt stores, however the relentless rise of the digital camera has hit hard across all retail outlets.
Overall sales of film have fallen by 71% since 2000, according to Mintel. Single-use cameras have fared better, as they’re seen as a low-risk option to take anywhere, such as to parties or nightclubs, or are used as an emergency back-up.
However, value sales in this market have also started to drop. This is partly due to multi-buy discounts, but also because of the increasing prevalence of camera phones.
Despite these challenges Fuji says it’s still worthwhile for forecourts to stock traditional films and instant cameras. "We believe that if our products are well displayed and promoted they will entice sales. They are very much an impulse buy and most forecourts get a lot of traffic, particularly from travellers stopping for refreshment," says Gabriel Da Costa, assistant product manager.
Where one opportunity fades, another inevitably opens up. And so forecourts are now being targeted by manufacturers of digital memory cards, who believe their products can be sold alongside traditional film in any location.
Dave Flack, director of marketing at Catalus, says that as the price of memory cards has dropped, the purchasing process has become less risky for the consumer making it more of an impulse buy. Where such products were once the domain of the specialist camera or electrical shop, even Tesco now stocks its own-label branded cards, which Catalus supplies. "There is no longer the requirement for staff product awareness as the consumer is more aware of their device requirements," adds Flack.
Mark Floyd, UK retail account manager at Peak Development, believes digital memory particularly appeals to two types of forecourt user. For holidaymakers looking to buy extra storage for their digital pictures, SD and XD cards are the core products; while businessmen on the road who need to transfer data from device to device might buy a USB flash drive.
Peak Development claims to be the longest-serving distributor for SanDisk memory cards.
"We are pro-active in supporting customers with POS material to develop awareness and dummy packaging to help prevent shrinkage. We also run bespoke promotions," says Floyd. Typical margins are between 35-40% and the company also offers a price protection scheme to cover the retailer if the cost price drops.
=== Snap Happy ===
The popularity of digital cameras and camera phones has seen digital printing kiosks popping up in all sorts of new locations.
To allow smaller retailers to capitalise on this Sony offers the SnapLab, which it claims is the smallest standalone photofinishing printer in the world.
Carl Pring, marketing manager at Sony, says: "The SnapLab can fit on the narrowest counter and since no computer connection is required, it is simple to set up and maintain.
"It uses the latest technology to provide a fast and efficient photography service that will be a hit with customers."
At £1,250, the SnapLab is a fraction of the cost of a digital mini-lab.
It is easy to use - a colour LCD touch-screen guides the user through the process to produce photolab-quality photos from digitally stored images in seconds. There are also creative options such as crop and rotating, red eye reduction and colour adjustments, which allow the customer to enhance and edit their photographs.
=== Battery Boosters ===
? Stock a cross-section of the most popular battery sizes to meet consumers’ needs. These are AA, AAA, C, D and 9V.
? Different sizes sell at different rates. The AA size alone accounts for more than 70% of all sales and should therefore be given the greater proportion of any display. AAA is the next biggest seller with around a 15-16% sales share.
? Pack sizes should reflect the customer profile.
? In smaller outlets where the average basket spend is typically lower, consumers are more likely to buy standard packs than multipacks.
? Display is crucial with batteries as some 75% of battery buyers aren’t planning to buy batteries when they enter a store.
? Ensure the batteries are easy to see. Seeing a display often prompts purchase.
? Make use of merchandising units. Used correctly these units will make it easier for the consumer to find and choose the correct pack.
? Recent research suggests that up to 40% of consumers who get to the battery display fail to make a purchase because of confusion over battery types and sizes. As a result always keep facings fully stocked. This will maximise the presence of the merchandising unit and also means that consumers can always find the correct sized battery.
? Place merchandiser units in key impulse areas, ideally near to the till point which the consumer can easily find them.
? Also consider placing units alongside electrical devices or other related products.
? Highlight batteries at different times of the year through themed seasonal displays.
? With the longer nights, sales pick up in September through to January, peaking at Christmas with the gifting of battery-powered items.
? If you sell any battery operated toys or gadgets always check that customers buying them have the batteries to power them and suggest buying spares to avoid disappointment when the current ones run out.
=== Spotlight on torches ===
The darker evenings and occasions like Bonfire Night make the autumn and winter months a key selling period for torches. What’s more, wanting a torch to keep in the car in case of an emergency or breakdown is often cited as a key reason for purchase, making this a particularly important category for forecourts.
Most of the major battery manufacturers also have a presence in the torch market as well, which Energizer reckons is worth £40m a year in the UK. The company is promoting the following three lines as must-stocks for this season. The Impact model is described as a tough torch, with a shatterproof lens and heavy-duty rubber body. Its Krypton bulb is said to be 70% brighter than a normal one. Rrp is £6.99.
Meanwhile, the Advanced 6LED Headlight has an adjustable beam and allows users to keep both hands free, making it particularly useful for anyone lighting fireworks on Bonfire Night. It retails at £19.99.
Finally, the Hi-Tech LED Key Ring is designed to provide extra reassurance - and help the user find the key hole - on dark winter evenings. The LED bulb lasts for 8,000 hours and retails at £5.99.
=== Retailer view ===
While people may expect to pay a premium for convenience, they don’t always do so willingly and Mark Wilson, operations director for the Fraser Group, says a more competitive pricing policy has boosted the group’s battery sales. "There’s always been a perception that forecourts over-price and that can put people off," he says. "If we were to charge £4.99 for a standard pack of batteries - as some retailers do - then people would only buy them in our stores as a last resort. We want people to want to come here and know they’re getting value for money.
"We monitor prices quite keenly and always look to undercut the competition, including the supermarkets. It sends out a positive message to the customer and I believe we get more repeat trade as a result. We sell any standard Duracell pack at £2.99 at the moment and advertise the price clearly on the display. We’re still making a very good margin. You don’t need to rip the customer off to make a good profit. The other important thing is to never run out, which we don’t."
The five Fraser sites each incorporate a large display area of around 1m wide by 1m deep behind the counter, with eye-catching Duracell branding. The range includes all core sizes, as well as specialist digital batteries for things like watches and car security systems.
Rechargeables are selling better now compared to a year ago, however, Wilson isn’t convinced that people are ready to start buying digital media cards from forecourts. "I would say it’s a high-risk area at the moment. You have to be very careful because it’s difficult to change people’s buying habits that dramatically. We tried to go into printer cartridges a few years ago and that didn’t really work," he says.