Ice, tornadoes, hurricanes, heat waves. Extreme weather is a year-round occurrence, and power outages mean battery and flashlight sales. “There’s really no part of the country that doesn’t have significant weather at some time of year,” says Jeff Jarrett, marketing director for Bethel, Connecticut-based Duracell, a Procter & Gamble brand. “Retailers need to have an emergency response programme in place so they can flex quickly to customer needs during those situations.”
In the Northeast, chains geared up early for a long winter. “We make sure to have a good supply of batteries on hand, because, along with water, they are one of the most important items for individuals before storms, and are very popular with customers who are preparing for snow or other inclement weather,” says Eric Bloom, spokesman for Scarborough, Maine-based Hannaford Bros.
“We work hard to avoid being out of stock on these items and have been successful in meeting customers’ need in this area. We front-load the stores when we know a big storm is coming,” he says. “This is a regular practice for us, since our market area is five Northeast states.”
Harrison Smiddy, senior director of marketing at Middleton, Wisconsin-based Rayovac, says that while storms happen throughout the year, the July-to-October hurricane season is one of the busiest for storm preparedness. “Hurricane season drives battery and flashlight sales, but it can be a challenge for supermarkets when they have to make decisions on how much to keep in stock,” he notes.
Keeping Supplies Front and Center
At a minimum, retailers need to keep checkouts stocked. “Batteries are among the top five items purchased at checkout,” points out Lou Martire, VP of trade development at St. Louis-based Energizer. “In fact, 76 percent of shoppers who buy batteries at checkout only buy batteries from that area of the store.” Retailers that supplement with end caps, displays and signage can significantly boost sales.
Positioning a store as a go-to source for emergency supplies has other advantages. “Meeting the needs of consumers during severe weather events is seen as a real competitive advantage and point of differentiation for stores in high-risk areas,” says Martire.
Supermarket retailers have to make sure they’re not missing opportunities. “In 2013, with Hurricane Sandy and the ice storms, we sold a lot of batteries, but we could have sold twice that with better merchandising,” admits Rayovac’s Smiddy.
“Retailers have to make sure that the products are out and on display,” stresses Jarrett. “Supermarkets have the traffic, but they haven’t done the best job making those products visible in a path where consumers are going to walk.”
Boise, Idaho-based WinCo Foods locates the department in the center of the store. “We have a fully loaded central display down the center aisle in each store that carries all batteries and flashlights,” says buyer Rick Whitten.
Portable display options, like Rayovac’s 2-by-2-foot quarter-pallet floor display, help supermarkets make the most of the category when disaster strikes. “The display also allows them to merchandise value pack sizes, like the 36-count packs sold in club stores, to entice emergency-preparedness impulse sales,” says Smiddy.
Satellite Displays Boost Sales
WinCo uses two mobile pallet-sized displayers in each store in high-traffic areas and augments the displays with shippers during the holidays, according Whitten.
Duracell has designed an emergency response programme to help retailers get the product they need into the stores in an emergency. The programme includes displays targeting emergency preparedness.
Assortment is also crucial to maximising category sales. The alkaline battery segment represents 90 percent of total household battery sales, according to Martire. “The rechargeable segment — batteries and chargers — accounts for about 5 percent of sales,” he says. While European consumers have embraced rechargeables, disposable batteries still own the market in North America, and this preference for disposables isn’t expected to change any time soon.
AAs outsell AAAs two to one, but AAA sales are catching up. Electronic devices with smaller footprints call for smaller cells, fueling the growth of that segment. In the supermarket channel, data from Chicago-based IRI for the 52 weeks ending Jan. 26, 2014, show that alkaline battery sales dipped 5 percent to $467 million.
Within the alkaline category, high-performance AAA cells designed for high-drain devices and offering an extended shelf life (usually up to 10 years) have seen tremendous growth. Over the past year, manufacturers have introduced new extended-life brands: Duracell’s Quantum, Energizer’s MAX and Rayovac’s Advanced High Energy all feature decade-long shelf lives.
High-performance Segment Growing
“While the high-performance segment still represents a small base, it’s showing double-digit growth,” notes Smiddy. “These products give consumers better performance than traditional alkalines, yet a premium alkaline costs only about 15 percent more, compared with high-performance lithium batteries, which can retail for double the price of an alkaline. Consumers haven’t been willing to spend quite that much more.” Sales in the nickel-cadmium, nickel-metal hydride, lithium-ion and lead-acid segment slid 15 percent to $12 million in the supermarket channel last year, according to IRI.
Martire says that “long-lasting” has become the “imperative in the battery category, especially from branded batteries.” Those long-lasting cells are being positioned as a good fit for high-drain devices as well as for emergency needs. “We see that area adding to storm preparedness,” observes Smiddy. “Consumers want products they can throw in the basket when they do their pre-storm shopping.”
Flashlight sales were up 7 percent this year across all outlets, according to IRI, but supermarkets saw a 9 percent decline in the category. New products could help boost sales in the grocery channel. “Flashlights as a category are trending up, and that’s all due to innovation,” says Jarrett. “Flashlights are getting smaller and more powerful.”
In the fourth quarter, Rayovac will launch a Storm Prep Line featuring NiteGLO locator technology, a glow-in-the-dark power button for easy location in unlighted areas. Including a flashlight, lantern and flashlight/lantern that will retail for between $10 and $20, the line will get a big marketing push in spring 2015.
Portable power products are also emerging as must-haves for heavy weather. Rayovac recently launched battery-powered phone and USB device chargers. “The first priority is powering the phone in an emergency,” says Smiddy. The new 2 Hour Power and 7 Hour Power instant chargers provide backup power with four AA alkaline batteries. The 2 Hour Power charger retails for $9.99; 7 Hour Power’s suggested retail is $14.99.
“Packaging is small so retailers can get 24 to 60 pieces on our 2-by-2 pallet display, or use the display’s snap-off option for end cap use,” notes Smiddy.
Duracell will launch four new products in its Duracell Power Mat line later this year. “The products will range from a small battery-powered charger you can throw in a purse to a larger charger that can be used to power a tablet,” says Jarrett.