GENERAL: MERCHANDISE

MAKE WAY FOR MERCHANDISE

Why a less traditional approach to buying general merchandise is good news for convenience and roadside retail, writes Thomas Oakley-Newell.

Convenience was king for consumers during the pandemic, with travel restrictions in place and a desire to avoid high-traffic locations, it was no surprise that we saw an uptick in the amount of people looking for items at convenience stores that they normally wouldn’t.

Daniel Avrahami, Director, Smooth Wholesales, has noticed an increase in “less traditional” products such as toys, activity sets, puzzles, kid’s books, LED torches and general novelty products.

“We attribute this to a change in how consumers view petrol and convenience (P&C) locations. In the past, consumers would see a petrol station as a place to fill up their car, get some milk and the newspaper and be on their way.

“Those days are gone, and consumers demand more from P&C operators. More specifically, they expect a well-rounded product offering that includes, attractive food and drink options, a wide range of mobile phone, smoking and auto accessories, the latest sunglasses designs, toys, games, novelty products and the list goes on!”

Customers are happy to spend money on a product that they wouldn't expect to find at a P&C store, such as toys, puzzles, games etc.

Ben Coleman, General Manager of Commercial and E-Commerce at Pacific Optics, also recognised that customers who moved over to the channel for the first time over the pandemic were continuing to shop there.

“Customers who migrated and experienced the convenience channel for the first time during Covid are now staying with the channel since realising what was on offer. In particular, practical items such as reading glasses and work from home essentials like cables and headphones are being picked up by the new customers in the channel.”

Coleman said the P&C channel is what it what Pacific Optics is founded upon and what they are passionate about.

“The P&C channel is dynamic, and we are built around being agile to meet our customer and the channel’s needs.”

Yaniv Peleg, Director of Peleguy Distribution, said the P&C channel is extremely important as it currently generates 95 per cent of its business.

“This industry is where we excel, and we aim to help our customers make thousands of dollars in revenue every month. We achieve this by having regular store visits and supplying a large range of products that are in high demand.”

Peleg has noticed that customers seem to be happier to spend money on items they would not normally purchase from a convenience store or petrol station.

“People are starting to go to their smaller, local stores more often instead of the big supermarkets and shopping centres, even spending money there on their everyday groceries. We’ve also noticed that buyers get a much wider range of products at the P&C stores these days, such as phone chargers with wireless charging technology, Bluetooth earphones and gifts, which are usually more expensive than your everyday range.”

Jason Woodland, Delivery Services Manager, Ampol, said they have also noted a change in consumer behaviour across the channel more recently.

“Customers are shopping a wider range of our general merchandise category, with many Australians exposed to the offer for the first-time during lockdown. We’ve showcased to customers that we have a moderate range of general merchandise, and our convenient locations mean they can get in and out very quickly.”

Fuse Airbudz are a popular product distributed by Pacific Optics.

Given the large number of Ampol service stations across the country, including the company’s 684 controlled retail sites and 1,881 branded sites, approximately three million consumers are exposed to their product range each week. When these customers encounter items that they may not expect to see, such as apparel, it can drive impulse purchases across the category.

“Segments of our apparel range have been performing well this year as we’ve found synergies with our sponsorships, including Ampol State of Origin and Red Bull Ampol Racing, to integrate supporter merch and novelty collectibles in-store. We have also seen products within recreational segments, such as fishing, recovering quite well from the previous year.”

LOOKING AHEAD

With the future looking uncertain as ever, it will be curious to see whether consumers continue to shop within the P&C channel for their less traditional items or transition back to shopping centres and other retail outlets.

Woodland said Ampol sees the opportunity over the next year to keep the range relevant to their customers’ shopping missions.

“Whether that be the spare pair of sunglasses for the road trip, or the picnic cutlery on the way to the BBQ, our range of general merchandise products can service a number of unique customer needs. We’ve also recently updated our picnicware range, proactively ahead of state legislation, and see this being another opportunity in the year ahead to identify areas where we can reduce waste with a thoughtfully sourced range.”

Avrahami said that the channel had its fair share of challenges in 2021, such as supply-chain issues and rising prices, and while they expect this to continue throughout 2022, Smooth Wholesales did experience significant growth over the year and has forecast this to continue into 2022.

People are starting to go to their smaller, local stores more often instead of the big supermarkets and shopping centres, even spending money there on their everyday groceries.

– Yaniv Peleg, Director, Peleguy Distribution

“We see our growth being contingent on several factors, such as continuing to build strategic partnerships with Australia’s leading FMCG distributors in order to provide quality products at affordable prices. We are also working on growing the size of our account management team so we can provide the highest level of service to our increasing customer base.”

The current problems regarding the supply chain will certainly prove a hinderance over the next year, but Peleg believes that there are always opportunities in the market.

Coleman said these supply chain issues will prove to be a problem for most businesses in the coming year, as well as the increase in costs of raw materials and logistics but have put in place measures to help counter the difficulties that may arise.

“We have dedicated teams here and overseas that help navigate the difficult waters and ensure continuity in our supply and timeliness of supply.”

“One of the biggest challenges will be to ensure we get enough stock from our suppliers when they do have stock, because there are currently issues in the market everywhere. We have also been having issues with courier companies not delivering some products on time.

Peleguy's Tiko Lighters are popular because they’re attractive, colourful, and functional.

“However, as always, there will be plenty of opportunities to increase the business. There are always new products that come to the market, new technologies and new fashions. We monitor the industry and global trends closely to be able to think ahead of the game and be able to supply and be a part of the next new thing. If you can analyse and predict the next must have product and you can find a way to bring it in time for the market requirement, the rewards will be significant.”

The best performing products at Peleguy are its phone accessories, such as its Vibe USB cables, explains Peleg.

“They are colourful, funky, and come in a variety of sizes to accommodate any style. Due to their versatility, the cables sell out from the stores time after time, generating a stable revenue for the shop owners.

“Not far behind these amazing products are our Tiko Lighters, both the Jet and USB range. Tiko Lighters are popular because they’re attractive, colourful, and functional.”

THE RIGHT FIT

An important part of selling general merchandise is ensuring you have the correct products in the correct locations, something Woodland advises retailers to do when positioning and selling general merchandise in-store.

“My key message would be to understand the segments you want to play in and execute them well, ensuring you’re placing the right range in the right stores. The last thing you want to present to your customers is a sea of supplier stands and clip strips making your store look more like a messy market stall. It needs to be easily shoppable for the customer, so the task is effortless.”

Customers are shopping a wider range of our general merchandise category, with many Australians exposed to the offer for the first-time during lockdown.

– Jason Woodland, Delivery Services Manager, Ampol

Avrahami offered similar advice regarding the stocking of Smooth Wholesale products, including always keeping displays full and to order enough stock to keep up with customer demands.

“Always display product prices as customers want to know how much they are paying. If you have a promotion (e.g. ‘2 for 1’ or ‘50 per cent off’), then make sure this is displayed clearly and prominently. Display your fastest selling products in more prominent and convenient locations, for example on or next to the front counter.

“It is vital for P&C operators to have a well-rounded product offering that expands beyond the traditional products that you would find in service station or convenience store. Consumer demands have changed, and they expect more from operators.”

Ensuring the products that Peleguy supplies and offers to its customers perform well is very important to Peleg.

“We educate the store managers about which products sell the fastest and advise them to have plenty of back up stock for those. We tend to find that this is most necessary for phone accessories, lighters, air fresheners and pharmaceuticals as these are in very high demand at the moment.”

While the products are obviously very important, Peleg said the way retailers position these products certainly comes into play in driving sales.

Walkntalk is distributed by Pacific Optics.

“Make the shelves look attractive and eye catching, keep the products neat and clearly visible. Shelves must be full, always stock up on the more popular products to avoid the shelves looking empty. Don’t be afraid to over-stock on fast moving items, you don’t want to be left without stock and having customers asking for sold out items.”

Coleman shared the sentiment that placement is most definitely key, and that with consumers now becoming more familiar with QR codes they are now seeing these appear on more products.

“We would recommend staff in store scan these and learn a bit more about our products making it easier to field questions when a customer comes in.”