A massive 660 million batteries will be sold in the UK this year, according to Mintel. And a quick count up of the number of power-hungry gadgets in a typical home explains just why the numbers are so big.
The popularity of MP3 players, digital cameras and GPS systems has prompted manufacturers to respond with specially designed batteries, such as Duracell's PowerPix, Energizer's Ultimate Lithium and Panasonic's Digital Xtreme Power. Shoppers have also been willing to fork out that little extra in the short term for the long-term benefits of rechargeable batteries and chargers.
The convenience sector has seen its sales share fall by 2% since 2003, but by improving offerings beyond the usual AA and AAA entry-level products, c-store retailers can claw back these profits.
Leading the way in the rechargeable sector in terms of innovation is Uniross, which recently launched its Hybrio battery - a rechargeable battery that comes ready to use and can be recharged about 500 times. The major manufacturers are expected to launch similar products in 2007.
Uniross deputy general manager Simon West believes the introduction of the Hybrio, described as a replacement for alkaline batteries, has made stocking rechargeables even more worthwhile for c-store retailers. "Rechargeables have already become more relevant to the convenience sector as they are now more mainstream and the prices have fallen," he says.
"Hybrio has taken this on much further and we have opened ourselves up to even more potential users. We know that other manufacturers are likely to follow with their own versions of the Hybrio but as they concentrate mainly on alkaline batteries, they won't be placing as much focus on the new products as we are."
For the time being, Uniross plans to stick with AA and AAA sizes for Hybrio as this is where most sales remain. The company has produced a counter-top box it says is ideal for convenience retailers who have limited space available.
West recommends retailers stock at least a few chargers with the Hybrio and says: "We have produced a pack that contains a charger as well as batteries, but both this product and the chargers on their own don't take up much space because they use slimline, non-bulky packaging."
He adds: "The other good thing about the Hybrio is that the batteries hold their charge for a lot longer once they have been charged and stored. Typically, rechargeables lose about 1% of their power every day they're not used, but the Hybrio loses well under a 10th of this."
Duracell also has a complete range of rechargeable batteries but this year has concentrated its efforts on promoting its core lines with the Duracell Bunny themed ads and as an official sponsor of the World Cup. The company dominates the market with more than a third of volume sales.
Senior brand manager Martin Gormley says it's important that convenience retailers cater for a wide range of shoppers, including those looking for premium batteries. "The increase in the number of electronic items on sale is driving battery purchase," he says. "People don't want to lose power at a critical time so they are buying products with a longer life. However, it's also worth remembering that there are a lot of people happy to buy standard everyday batteries. This is evident from the fact that sales of Duracell Plus and Ultra remain strong."
Gormley says that as with any category, correct merchandising is vital. "People need to be reminded to buy batteries," he says. "In convenience stores they are usually an impulse purchase so visibility is the key. They need to be highlighted and seen from a number of areas of the store. Secondary sitings also help, but it's not necessary for
c-stores to have huge displays."
He adds: "Christmas is huge for batteries and it's getting bigger each year. The peak in sales goes right through to January when people will use their local store to top up on those batteries they've run down
on their new toys."
Energiser, which recently extended its sponsorship of Channel Five's Gadget Show, has also been busy preparing to bolster c-store sales with a new counter-top unit
in time for the Christmas rush. Energizer marketing manager Sarah Richardson says: "We have carried out major research and what the trade asked for is an easy sell - something that does exactly what it says on the box. For this key selling period we've put together a counter-top unit for the impulse sector that will help boost battery sales."
Retailers can buy 36 packs of Energizer Ultra+ AA4 batteries and get 14 packs of Energizer Ultra+ free. Retailers will also receive two header cards - 'Buy one, get one free' and - 'Don't forget your batteries', giving two promotions
to choose from. Retailers can also
enter a competition to win a 42in plasma TV.
Richardson adds: "Retailers should also remember it's not just AA and AAA batteries that shoppers demand around Christmas and the New Year. To ensure maximum sales, stores need to carry the five core battery sizes which also include 9V, C and D."
Volume has outstripped value in the battery category because of the number of products sold under promotion, according to Panasonic brand manager Tim Clark. He says: "In 2005 27% of sales were through promotions, a rise of 6% on 2004. Pretty much all of the major manufacturers are doing this and
it is increasingly the case with private label."
Clark says that for Panasonic, the convenience sector is very much part of the company's focus. "The c-store sector is vitally important for us and it always has been," he says. "This is because our focus has traditionally been on our zinc entry-level products, which always sell well in c-stores.
"We've also introduced some premium lines such as Photo Power because of growth in the popularity of digital cameras. This growth has been very good for the battery market. It's especially the case with some of the cheaper models of electrical items, many of which take AA batteries."
Clark says 2006 has been about consolidating for Panasonic, but there are plans to introduce a new rechargeable product in the New Year. It is thought to be along the same lines at the Uniross offering.
He also highlights the seasonal nature of battery sales and adds: "Some 40% of our sales come in the last quarter of the year. There is a peak in January and then again before people go away on holiday in the summer. I recommend that
c-store retailers stock a core range of standard alkaline disposable batteries as well as one or two premium ranges. This gives the customer the chance to trade up."
Elsewhere, H-Squared Electronics - which has supplied industrial, commercial and public sector organisations with batteries for the past 30 years - recently announced it is to extend its distribution services to retail.
Commercial director Tim Champion explains: "We intend to bring the virtues of reliability, availability, value and support, which have been so important to our success to the retail market. Leading our product offering for retailers will be three of the leading names in the world of batteries - Duracell, Varta and Toshiba, new
to the UK and only available from H-Squared. Duracell and Varta give our retail customers the product variety and pricing options that they demand. Toshiba also offers a new, great value opportunity as well."
Point of sale material, stands and promotions, starting with a special introductory offer from Toshiba, will also be part of the support package from H-Squared. Customers will be supported by a field sales team and an internal sales desk.
As consumers continue their love affair with trendy electrical gizmos, gadgets and children's toys, the demand for batteries can only continue. Convenience stores will remain a major port of call when it comes to emergency and impulse purchases so check your stock now to make sure you're powered up
for Christmas.
Moixa Energy has launched a rechargeable battery that contains a built-in charger. USBCELL can be charged
from any USB port by popping the lid off the battery to reveal the connector.
The product, which is currently only available in the AA size, can be used like a normal battery and is likely to be available to c-store retailers in the New Year.
SMJ Electrical is increasing its AAA offering in its Extreme Performance battery range with the addition of an
AAA 15-pack.
It says the launch is in response to the minimisation of electronic products. The pack will retail for £6.99.
Marketing director Julie Hynd says: "Consumers are looking increasingly for more AAA batteries and our new 15-pack provides the solution. Its packaging shouts from the shelf and it's a well- priced option without compromising
on performance."
l Ensure that you stock a
cross-section of the most popular battery sizes: AA, AAA, C, D and 9V.
l Different sizes sell at different rates, with the AA alone accounting for more than 70% of all sales. Give AA a greater proportion of any display to reflect consumer demand. AAA is the next biggest seller with about a 16% sales share.
l Pack sizes should reflect customer profile. In smaller stores, where trip spend is lower, shoppers are more likely to buy standard packs than multipacks.
l Display is crucial. Some 75% of battery buyers don't plan to buy batteries when they enter a store.
l Ensure the batteries are easy to find and see.
l Make use of merchandising units. Correctly merchandised products will make it easier for shoppers to choose the pack they're after.
l Always keep facings fully stocked.
l Place units in key impulse areas, ideally near the till. Also consider placing the units alongside electrical devices or other related products to increase sales.
l Highlight batteries at different times of the year through themed seasonal displays. Sales pick up with the longer nights in September and are high all the way through to January, peaking at Christmas.
Source: Panasonic
EU legislation on the recycling of batteries will come into force in 2008. The directive will also ban batteries with more than a trace of toxic chemicals. A quarter of all used batteries must be collected by 2012, rising to 45% by 2016. At least half of these must be recycled.
The cost of implementing the new laws will fall on the industry, but manufacturers have been quick to state that the legislation will not lead to an increase in the cost of batteries.
The popularity of MP3 players, digital cameras and GPS systems has prompted manufacturers to respond with specially designed batteries, such as Duracell's PowerPix, Energizer's Ultimate Lithium and Panasonic's Digital Xtreme Power. Shoppers have also been willing to fork out that little extra in the short term for the long-term benefits of rechargeable batteries and chargers.
The convenience sector has seen its sales share fall by 2% since 2003, but by improving offerings beyond the usual AA and AAA entry-level products, c-store retailers can claw back these profits.
Leading the way in the rechargeable sector in terms of innovation is Uniross, which recently launched its Hybrio battery - a rechargeable battery that comes ready to use and can be recharged about 500 times. The major manufacturers are expected to launch similar products in 2007.
Uniross deputy general manager Simon West believes the introduction of the Hybrio, described as a replacement for alkaline batteries, has made stocking rechargeables even more worthwhile for c-store retailers. "Rechargeables have already become more relevant to the convenience sector as they are now more mainstream and the prices have fallen," he says.
"Hybrio has taken this on much further and we have opened ourselves up to even more potential users. We know that other manufacturers are likely to follow with their own versions of the Hybrio but as they concentrate mainly on alkaline batteries, they won't be placing as much focus on the new products as we are."
For the time being, Uniross plans to stick with AA and AAA sizes for Hybrio as this is where most sales remain. The company has produced a counter-top box it says is ideal for convenience retailers who have limited space available.
West recommends retailers stock at least a few chargers with the Hybrio and says: "We have produced a pack that contains a charger as well as batteries, but both this product and the chargers on their own don't take up much space because they use slimline, non-bulky packaging."
He adds: "The other good thing about the Hybrio is that the batteries hold their charge for a lot longer once they have been charged and stored. Typically, rechargeables lose about 1% of their power every day they're not used, but the Hybrio loses well under a 10th of this."
Duracell also has a complete range of rechargeable batteries but this year has concentrated its efforts on promoting its core lines with the Duracell Bunny themed ads and as an official sponsor of the World Cup. The company dominates the market with more than a third of volume sales.
Senior brand manager Martin Gormley says it's important that convenience retailers cater for a wide range of shoppers, including those looking for premium batteries. "The increase in the number of electronic items on sale is driving battery purchase," he says. "People don't want to lose power at a critical time so they are buying products with a longer life. However, it's also worth remembering that there are a lot of people happy to buy standard everyday batteries. This is evident from the fact that sales of Duracell Plus and Ultra remain strong."
Gormley says that as with any category, correct merchandising is vital. "People need to be reminded to buy batteries," he says. "In convenience stores they are usually an impulse purchase so visibility is the key. They need to be highlighted and seen from a number of areas of the store. Secondary sitings also help, but it's not necessary for
c-stores to have huge displays."
He adds: "Christmas is huge for batteries and it's getting bigger each year. The peak in sales goes right through to January when people will use their local store to top up on those batteries they've run down
on their new toys."
Energiser, which recently extended its sponsorship of Channel Five's Gadget Show, has also been busy preparing to bolster c-store sales with a new counter-top unit
in time for the Christmas rush. Energizer marketing manager Sarah Richardson says: "We have carried out major research and what the trade asked for is an easy sell - something that does exactly what it says on the box. For this key selling period we've put together a counter-top unit for the impulse sector that will help boost battery sales."
Retailers can buy 36 packs of Energizer Ultra+ AA4 batteries and get 14 packs of Energizer Ultra+ free. Retailers will also receive two header cards - 'Buy one, get one free' and - 'Don't forget your batteries', giving two promotions
to choose from. Retailers can also
enter a competition to win a 42in plasma TV.
Richardson adds: "Retailers should also remember it's not just AA and AAA batteries that shoppers demand around Christmas and the New Year. To ensure maximum sales, stores need to carry the five core battery sizes which also include 9V, C and D."
Volume has outstripped value in the battery category because of the number of products sold under promotion, according to Panasonic brand manager Tim Clark. He says: "In 2005 27% of sales were through promotions, a rise of 6% on 2004. Pretty much all of the major manufacturers are doing this and
it is increasingly the case with private label."
Clark says that for Panasonic, the convenience sector is very much part of the company's focus. "The c-store sector is vitally important for us and it always has been," he says. "This is because our focus has traditionally been on our zinc entry-level products, which always sell well in c-stores.
"We've also introduced some premium lines such as Photo Power because of growth in the popularity of digital cameras. This growth has been very good for the battery market. It's especially the case with some of the cheaper models of electrical items, many of which take AA batteries."
Clark says 2006 has been about consolidating for Panasonic, but there are plans to introduce a new rechargeable product in the New Year. It is thought to be along the same lines at the Uniross offering.
He also highlights the seasonal nature of battery sales and adds: "Some 40% of our sales come in the last quarter of the year. There is a peak in January and then again before people go away on holiday in the summer. I recommend that
c-store retailers stock a core range of standard alkaline disposable batteries as well as one or two premium ranges. This gives the customer the chance to trade up."
Elsewhere, H-Squared Electronics - which has supplied industrial, commercial and public sector organisations with batteries for the past 30 years - recently announced it is to extend its distribution services to retail.
Commercial director Tim Champion explains: "We intend to bring the virtues of reliability, availability, value and support, which have been so important to our success to the retail market. Leading our product offering for retailers will be three of the leading names in the world of batteries - Duracell, Varta and Toshiba, new
to the UK and only available from H-Squared. Duracell and Varta give our retail customers the product variety and pricing options that they demand. Toshiba also offers a new, great value opportunity as well."
Point of sale material, stands and promotions, starting with a special introductory offer from Toshiba, will also be part of the support package from H-Squared. Customers will be supported by a field sales team and an internal sales desk.
As consumers continue their love affair with trendy electrical gizmos, gadgets and children's toys, the demand for batteries can only continue. Convenience stores will remain a major port of call when it comes to emergency and impulse purchases so check your stock now to make sure you're powered up
for Christmas.
Lift the lid on battery sales
Moixa Energy has launched a rechargeable battery that contains a built-in charger. USBCELL can be charged
from any USB port by popping the lid off the battery to reveal the connector.
The product, which is currently only available in the AA size, can be used like a normal battery and is likely to be available to c-store retailers in the New Year.
Big on convenience
SMJ Electrical is increasing its AAA offering in its Extreme Performance battery range with the addition of an
AAA 15-pack.
It says the launch is in response to the minimisation of electronic products. The pack will retail for £6.99.
Marketing director Julie Hynd says: "Consumers are looking increasingly for more AAA batteries and our new 15-pack provides the solution. Its packaging shouts from the shelf and it's a well- priced option without compromising
on performance."
Fully charged?
l Ensure that you stock a
cross-section of the most popular battery sizes: AA, AAA, C, D and 9V.
l Different sizes sell at different rates, with the AA alone accounting for more than 70% of all sales. Give AA a greater proportion of any display to reflect consumer demand. AAA is the next biggest seller with about a 16% sales share.
l Pack sizes should reflect customer profile. In smaller stores, where trip spend is lower, shoppers are more likely to buy standard packs than multipacks.
l Display is crucial. Some 75% of battery buyers don't plan to buy batteries when they enter a store.
l Ensure the batteries are easy to find and see.
l Make use of merchandising units. Correctly merchandised products will make it easier for shoppers to choose the pack they're after.
l Always keep facings fully stocked.
l Place units in key impulse areas, ideally near the till. Also consider placing the units alongside electrical devices or other related products to increase sales.
l Highlight batteries at different times of the year through themed seasonal displays. Sales pick up with the longer nights in September and are high all the way through to January, peaking at Christmas.
Source: Panasonic
EU recycling law
EU legislation on the recycling of batteries will come into force in 2008. The directive will also ban batteries with more than a trace of toxic chemicals. A quarter of all used batteries must be collected by 2012, rising to 45% by 2016. At least half of these must be recycled.
The cost of implementing the new laws will fall on the industry, but manufacturers have been quick to state that the legislation will not lead to an increase in the cost of batteries.
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