Consumers seek more novelty, seasonal options
Where would the candy category be without seasonal merchandise? Seasonal candy sales are a driving force in the category, with seasonal period sales accounting for 55% of the confectionary pie, according to the National Confectioners Association. Unique seasonal in-and-out items shaped and colored specifically for a season represent 22% of category sales. In 2014, NCA estimates that seasonal candy sales will account for $7 billion.
Retailers can drive incremental sales with seasonal merchandise. Easter represents the biggest incremental sales opportunity, with 28% of sales in the candy aisle during the season identified as merchandise that is sold “above and beyond” what consumers would normally purchase, said Jenn Ellek, a spokeswoman for NCA. Halloween generates 22% of incremental sales, winter holidays about 24% and Valentine’s Day about 16%.
“Execution is the key to maximizing sales,” Ellek said. “Retailers should not pull seasonal candy or do markdowns before the weekend when the holiday falls on a Friday. Research shows that consumers continue to purchase on the weekend after the holiday, and the extra sales can push retailers to double-digit increases.”
“Consumers are looking for novelty type items, as well as popular brands in seasonal packaging and colors, so retailers should incorporate seasonal merchandising and secondary displays. To respond to the trend, we’re expanding our seasonal shapes this year with the Twix Brand, so you’ll see Twix brand ghosts and eggs,” said Larry Lupo, VP of sales for convenience and drug channels at Mars Chocolate North America.
A longer Easter holiday selling season this year is a boost for retailers who merchandise early and keep product on display through the holiday weekend. “Consumers buy early, eat it and come back and buy more,” Ellek said. The strategy holds for Halloween.
Chocolate is a major part of seasonal. In the 2013 winter holiday season, chocolate items accounted for more than 60% of seasonal purchases and grew sales 3.2%, while non-chocolate, which comprised 27% of overall sales, grew 0.6%.
Research from Mintel revealed that nearly 75% of chocolate consumers think seasonal chocolates are a fun way to celebrate the holidays, and another 45% think that there should be seasonal chocolates available for more holidays. “This interest in seasonal chocolates, along with consumers’ tendency to both eat and spend more on chocolate during the holidays, is a good sign for the seasonal chocolate market,” according to Mintel’s report.
The drug channel, Ellek said, has always been the trailblazer when it comes to merchandising candy during key seasonal selling seasons. “Drug has been an innovator,” she said. “The channel has been the best at differentiating and making the center aisle an experience, especially for Valentine’s Day. Drug owns that holiday for candy sales.” Great displays, use of floor stands and store decor adds to creating retail “theater” and translates to higher sales volume.
“Seasonal sales are very important to retailers, so those that don’t put effort into making an exciting assortment won’t grow your sales. The smart retailers do put forth the effort and are rewarded with a growing and loyal shopping base,” said Rob Auerbach, president of CandyRific. End caps, floor displays and signage call out to the customer, he said. “It’s a short and defined window of opportunity to make the seasonal sale, so the retailer has to translate this period from interest into purchase.”