Last updated on July 23rd, 2018 at 02:08 pm
Rather than concede general merchandise sales to new and disruptive competition, brick-and-mortar retailers are seeking creative ways to maintain their share of this critical and high-margin category.
This is one of the conclusions contained in the “General Merchandise Benchmarking Report,” an annual industry report recently released by the Global Market Development Center (GMDC) in partnership with A.T. Kearney. The study, which surveyed 100 GM retailers, identified five key strategies that food, drug and mass retailers can leverage to both stem the loss of short-term sales and set themselves up for longer-term success.
Released at GMDC’s 2018 General Merchandise Conference, the report describes the GM category as a potentially overlooked weapon for traditional retailers fighting for survival on multiple fronts. The research indicates that although GM sales in the traditional food/drug/mass (FDM) channel dropped by 3.5 percent last year—largely because of a decline in units sold (not counting online retailers)—opportunities still exist for traditional retailers to leverage GM.
The study found that not all GM categories are created equal, suggesting retailers stop thinking about GM as a monolithic category and instead focus on the potential of specific GM categories and subcategories on an individual basis viewed through broader trends impacting consumers and retailing.
“Retailers who are on-trend, online, localized, promote and personalize will succeed in GM,” affirms Charisse Jacques, principal, A.T. Kearney.
The research revealed areas of growth that relate to several trends currently impacting GM. Five characteristics stand out among the retailers that are succeeding at driving growth in GM: Being on-trend, offering a broad and deep online GM assortment, localizing merchandise, maintaining traditional promotions while conducting more digital promotions and knocking down departmental silos.
While at the highest level it may appear that GM isn’t doing well in the FDM channel, research has found that pockets of growth exist, and retailers can adopt some of these lessons learned to fuel sales across their GM business.
“Interestingly, several of the products selected as the Top 10 at our General Merchandise Conference in June advanced in part because they align with trends noted in this report, or because they could help retailers tap into these trends,” said Patrick Spear, president and CEO of GMDC. “For example, seven of the Top 10 products represent kitchenware or gadgets, aligning with the ‘foodie lifestyle’ as one of retail’s current and predominant trends.”
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