In our last blog entry, we talked a lot about the impact that effective merchandising has on Revenue Per Square Foot (RPSF). Choosing “Vendor Supplied Coolers,” versus purchasing your own, can also impact RPSF.
For decades, marketers of Consumer Packaged Goods (CPG’s) have employed Point of Purchase Advertising (product displays made from a variety of materials including cardboard, plastic, wood, metal and wire) as a means of securing valuable shelf and floor space in retail as well as highlighting their product or service. It supports the Point of Purchase Advertising Institutes (POPAI) stats that suggest nearly 80% of all buying decisions are made at the Point of Purchase.
In most, if not all scenarios, the CPG covers the cost of the POP display in exchange for the retailers’ support of the program or promotion.
Vendor supplied coolers follow the same principal. By supplying (and covering the cost of) the cooler, they secure valuable real estate in-store as well as gain leverage over product mix and volume commitments (remember, Coke is not likely going to support the placement of Pepsi’s products in its cooler).
Whose Best Interests?
Receiving a “Free” cooler may at first glance seem like a good deal but a savings of perhaps $1000 – $3000 (the typical cost of the cooler provided) can be quickly eclipsed by a decline in RPSF as a result of serving the CPG’s best interests instead of merchandising product based upon your stores sales data.
The product mix and sales volume you could be expected to support may not be the best fit with your market area, target clientele and/or better selling SKU’s.
By owning your equipment you incur a higher capital investment but, by controlling your product mix based upon sell through data, you may be able to improve RPSF in your refrigerated products.
Does Energy Efficiency Matter?
It sure does! A C-Store operator’s electricity bill is arguably one of their highest operating costs. A difference of only 20% in improved efficiency could result in a savings of literally hundreds or even thousands in profit per year.
Deal or No Deal?
Simply put, it’s worth considering more than just the cost of equipment when considering who to partner with and how to acquire refrigerated merchandisers.
For more advice on what’s the best solution for your business, give us a call. We are always happy to help!