Market Overview

GMDC Identifies Impulse Categories to Support Growth for General Merchandise Retailers

Share:

GMDC Releases Latest Center Store Drivers Research Report

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.

View Comments and Join the Discussion!