Optimizing
Front End Checkout
Merchandising
Maximizing Shopper Interaction
In A New Era Of Technology
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Front-End Focus Leadership Sponsors
The Front-End Focus Leadership sponsors are committed to providing continued front-end merchandising insights and integrated solutions to improve store performance & enhance customer satisfaction
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The Front-End Situation
The Front-End checkout is a critical location in the store
 A location most every shopper passes
 Major location for immediate consumption snacks and other impulse items
 It represents a significant source of impulse sales
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Emerging Front End Checkout Trends
 Increased retailer focus on checkout trips, basket size and sales performance
 Retailers increasingly want to reduce design and style complexity
 Lower profile fixtures – streamlined look – category segmentation
 Average program life – 4.5 years
 Additional and larger beverage coolers
 Self-checkout transactions continue to grow – more stores & lanes/store
 Growing desire by some retailers to add space for promotions
 Emerging categories & speed to market of new items
 Role of the Power Categories
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The Front-End Represents About 1.0% of
Grocery Store Sales and 1.3% of Profits
Grocery Front-End Checkstand
1.0%
1.3%
Annual Supermarket
Annual Supermarket
Sales* =
$547 Billion x
1.0% of Sales =
$ Opportunity For
Improvement Of
Front-End
Merchandising
$7.2 Billion
$1.7
Billion
$5.5
Billion
$5.5
Billion
Sales of Front-End Items Store Sales Store Profits
Front-end items generate $5.5 Billion for Supermarkets
Improving Front-End Checkout Merchandising could yield an additional $1.7 Billion in sales
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* Source: Front-End Focus, Progressive Grocer 2008

Incremental Sales Driven By Impulse Buying Are Key
Percent of Decisions Made In-Store
* Source: Front-End Focus
Magazines and Consumables drive incremental sales and those purchase decisions are generally made in store
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Beverages, Magazines, & Confectionery Generate Over
80% of Checkout Sales & Are Purchased Frequently
Percent of Total Checkout Dollar Sales
Percent of Consumers Buying At
Checkout Once a Month or More
(% of Purchasers of Category)
84%
And they are the power categories across all lane types
* Source: TWR Checkout Research, 2011 (eight retailers and over 1,400 stores), 52 weeks through 2010 to 2011, Impulse Marketing
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Household
Penetration
Front-End Power Categories Are
Defined By Key Metrics
Frequency of
Purchase
Impulsiveness of Purchase
$ Share of
Front-End Sales
Front-End Power Categories
High performing retailers consider four essential shopper demand criteria when allocating space
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* Source: Front-End Focus, DHC Analysis

Low Scores
Health Items
Razors/Blades
Baked Goods
Lip Care
Oral Care
Household Products
Audio/Video/DVD
Other Snacks
Beauty Care
Grocery Products
Film/Camera Supplies
Children’s Items
Nutrition/Energy Bars
Books
Maps/Horoscopes/Puzzles
Mixed Scores
Salty Snacks
Batteries/Flashlights
Cookies/Crackers
Nuts/Seeds
Meat Snacks
Gift/Phone Cards
Tobacco Accessories
High Scores
Confectionery
Beverages
Magazines
•
•
•
•
Focus on key categories that:
Have high Household
Penetration
Have high Purchase
Frequency
Provide Higher
Impulse Sales
Generate higher
Front- End Sales
* Source: Front-End Focus
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Magazines And Confectionery Should Be On ALL Lanes
67%
“I don’t select a checkout lane based on the items displayed there.”
“I rarely take items
60% and wait in line at another.”
60%
Consumers tend NOT to shop across checkout lanes so retailers must have key consumer front-end categories available on every lane
* Source: Front-End Focus, Envirosell
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Visual Attention is Focused on the Power Categories
Resulting in Incremental Sales
* Source: TWR, Indiana University
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Visual Attention is Focused on the Power Categories
Resulting in Incremental Sales
* Source: TWR, Indiana University
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Visual Attention is Focused on the Power Categories
Resulting in Incremental Sales
* Source: TWR, Indiana University
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Penetration Of Self-Checkout Usage Has Reached A
Critical Level, Similar To ATMs
Self-Service Devices used in Last 6 Months
5%
* Source: Self-Service Consumer Study
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Checkout Purchases Make A Big Difference In Profitability
Cashier Lanes
$34.50
$31.71
+8.8% Self-Checkout Lanes +13.5%
Basket Without
Checkout Item
Basket With Checkout
Item
$20.61
$23.40
Basket Without
Checkout Items
Basket With
Checkout Items
…Especially at self-checkout where there is a 13% increase in basket size
* Source: Front-End Focus, TWR Checkout Research, 2011
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Shoppers Choose to Use a Self-Checkout Lane Based Upon 4
Core Shopper Needs:
Speed, Control, Simplicity, & Inspiration
I want to get in and out as quickly as possible
Speed
I want shopping to be more fun than a chore
Inspiration Control
Simplicity
I want it organized and clutter-free
I want control of the check-out process
Source: Coca-Cola SEI Qualitative
Concept Optimization: Grocery Self
Checkout, Gongos Research, 10/2011.
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Front-End Merchandising Can Dramatically Effect The
Value Of The Lane, Especially At Self-Checkout
Average Annual
Front-End Dollars
Annual Value of a Checkout Lane
= $24,000
$23,671
Regular
$25,900
Express
$8,772
Self-Checkout
 Lack of merchandising at self-checkout dramatically hurts sales
 Merchandising of self-checkout is generally an afterthought
 Without merchandising self-checkout, the potential lost sales is almost $100,000 per store
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* Source: Front-End Focus

Audits Suggest That 50% Of Self-Checkouts
Are Not Merchandised
Self-Checkout Merchandising Conditions % of Stores Where Self-Checkout Has…
No
Merchandising
50%
Good
Merchandising
11%
Average/Less Than
Average
Merchandising
39%
Lack of merchandising has a pronounced effect on impulse sales
* Source: Industry Audit
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1
Self-Checkout Lane Today Vary Dramatically in Layout & Merchandising
Self-Checkout Merchandising Today Tends to Fall into One of Three Broad Categories
2 3
Zero
Merchandising
Poor
Merchandising
Good, Not Great
Merchandising
 Empty
SCO environments that sacrifice profitable front end sales for operating efficiency
50% of SCOs have NO
Merchandising
 Incongruent
SCO areas with items or categories that have little shopper relevance, but appear to generate some revenue and/or liquidate inventory
 Tacked-On
Quick-fix solutions that simply position merchandising next to a SCO
 Cluttered
Disorganized, bazaar-like environments that are congested with fixtures, creating queuing confusion and hindering SCO checkout access
 Incomplete
Solutions that lack key categories shoppers seek and buy everyday from regular checkout lanes
 Inconsistent
SCO environments with merchandised categories that vary greatly by SCO lane
 Disconnected
Solutions that were designed with little regard to shopper needs and behavior/ checkout process
 Uninspired
Functional, transactional solutions that still have opportunity to better inspire impulse purchases
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Maximize Sales at Self-Checkout Lanes
With More Complete Merchandising
Self-Checkout Sales Per $ MM ACV Index by Level of Merchandising
109
97
78
Low
Merchandising
(<200 Inches)
Limited
Merchandising
(400 Inches)
Most Complete
Merchandising
(>400 Inches)
Front-End sales at Self-Checkouts improve significantly with more complete merchandising
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* Source: FEF Study, DHC Analysis.

Beverages, Magazines, & Confectionery Are
The Sales Drivers Of The Self-Checkout Lanes
% of Front-End Dollar Sales in Self-Checkout Lanes
Strategy: Focus on these key categories on self-checkout to drive incremental sales
* Source: Front-End Focus
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There Are Many Incomplete Approaches To
Merchandising The Self-Checkout Lanes
But none of them are integrated … until now
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Innovative solutions that leverage both new technology and checkstand best practices...
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Front End Solutions Collaborative Team
Best Practice Fixture Designs
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Front End Solutions Collaborative Team
Best Practice Fixture Designs
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Front End Solutions Collaborative Team
Best Practice Fixture Designs
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Front End Solutions Collaborative Team
Best Practice Fixture Designs
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Working Together To Provide Integrated
Merchandising Solutions For Self-Checkout Lanes
An integrated solution of technology and merchandising that is installed simultaneously
Sponsors of the Front-End Solution Center are looking to test front-end merchandising concepts with retailers that want to improve their check-out sales.
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Optimizing
Front End Checkout
Merchandising
Maximizing Shopper Interaction
In A New Era Of Technology
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