COLORADO SPRINGS, Colo.--(BUSINESS WIRE)--Leading retail industry trade association Global Market Development Center (GMDC) has released its latest research report, which identifies three non-food categories that are driving unexpected growth for physical retailers.
It is well understood that traditional retailers are facing challenges due to online competition, with a record number of bankruptcies and store closings recorded in 2017. In response to the evolving landscape, GMDC suggests retailers narrow their scope in order to best meet shopper needs and compete in today’s environment, which may require a restructure in retailers’ operational mindset.
In its latest research, GMDC defines impulse purchases as a key differentiator for brick-and-mortar retailers when the offering is curated appropriately to the right occasion and localized shopper.
“Online retailers typically underperform with impulse categories, as most shoppers plan their online purchases,” said Mark Mechelse, VP Insights & Communications with GMDC. “Most, if not all, online shopping is highly focused on price and value, and cannot deliver the immersive experience as that of a store and its associates. This is key for brick-and-mortar retailers to understand, as impulse purchases generally hold higher profit margins among all store merchandise.”
GMDC has uncovered three key product categories that are continually beating total store growth within physical retailers: books, trial and travel, and grilling. Unsurprisingly, each of these categories represents products commonly considered impulse purchases. In fact, between 65 to 85 percent of general merchandisers’ book sales are considered impulse driven. The growth in sales among these three product categories reinforces the impulse purchase as a focal area for growth among brick-and-mortar retailers.
The surge toward e-books has declined, with stores reporting an increase in sales of physical books. Eighty-five percent of book sales are print, and print book units are up 14 percent since 2012. Millennials comprise the largest book buying demographic, making 37 percent of all print purchases. Data indicates that increased book sales reflect a wave of nostalgia toward traditional and tangible products.
The growth within the trial and travel product category fits alongside not only the traveler shoppers, but also many other growing shopper trends. The rise in popularity of hospitality rentals, such as Airbnb, has contributed to the sales growth for this category with hosts purchasing trial-size products for guests. Other contributing factors include the opportunity to test out brands prior to committing to a larger purchase and professionals combining exercise with their workdays.
Lastly, grilling has experienced a surge in popularity in recent years. So much so that grilling is on the rise year-round, with 63 percent of grillers reporting activity throughout the year in 2015. In fact, off-season growth accounted for 97 percent of total category sales growth. Further, grill-related products are not considered conducive to online shopping due to shipping logistics and cost of bulky items for delivery.
“As organizations strive to reinvent their strategies and tactics in the face of disruption, retailers and their partners need to know that data are not insights, although data is fundamental,” said Patrick Spear, president and CEO of GMDC. “Leveraging data, layered with consumer understanding and shopper knowledge, leads to a process of converting information into action which drives greater sales. This report demonstrates how simple and transforming that can be.”
To download the full report, please visit https://www.gmdc.org/content-library.
The lead author of the report is Brad Golden of Centennial Advisors, who partnered with GMDC to create cohesive and proven insights. GMDC collaborated with Nielsen, Kantar Consulting, 84.51° and A.T. Kearney to source the data and insights. The supporters whose contributions have made the report possible are Kingsford, Clorox/Burt’s Bees, Navajo Incorporated and ReaderLink Distribution Services.
About GMDC
Global Market Development Center (GMDC) energizes members and the marketplace by advancing a culture of Connect-Collaborate-Create-Commerce. As the leading GM and HBW trade association, GMDC is dedicated to serving its ecosystem of more than 600 General Merchandise and Health Beauty Wellness retailers, wholesalers, suppliers and service/solution member companies by enabling consumer-facing innovation and retail reimagined. GMDC's combined member volume represents more than 125,000 retail outlets and more than $500 billion in sales. The latest GMDC news, contacts, events and insights for the retail industry can regularly be found on its social media channels: http://l.ead.me/ban6Hu. To learn more, visit gmdc.org.
