A surge of power

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Batteries remain a highly profitable category for retailers, with plenty of new product developments to interest modern, highly mobile customers. Anna Ryland reports.

The average household has around 30 battery-operated products, which reflects the importance of batteries in customers’ lives and their presence in almost every retail store.

“Nearly 70% of UK consumers buy batteries every year, purchasing an average of 27.4 individual cells each year. 40% of batteries are bought in Q4 of the year, which is a greater proportion than in Q2 and Q3 combined,” explains Tim Clark, sales manager, UK and Ireland, Panasonic Energy.

An explosion of portable electronic devices during the last decade and the increasingly mobile lifestyles have stimulated the demand for batteries and the advances of the technology used to power gadgets and accessories

As electrical devices are getting smaller the battery format is changing. The C, D and 9V cells are not as prevalent as AA and AAA anymore. In fact, they account for less than 20% of the market volume

“The commonplace nature of power-hungry, portable gadgets means it has been necessary for manufacturers to develop a range of products which enable consumers to enjoy their gadgets whenever and wherever they are. These portable charging solutions come with a range of adaptors enabling many gadgets, such as MP3/4 players, digital radios, e-readers, smartphones and  tablets, to be charged simultaneously,” says Anthony Stuart, sales director at VARTA UK. “This innovation in power technology has opened up a new sales opportunity for both manufacturers and retailers and has led to the introduction of battery chargers for ‘on-the-go’ and ‘in the home’.

The market

Although the demand for power hungry gadgets sustains the growth in this sector, the recession had made a clear impact on the market. According to GfK, in 2011 total battery sales recorded a 2% year-on-year fall in volume while value declined by 1.7%. Average price remained the same at 67p.

The market is dominated by alkaline batteries, accounting for 85.5% of the market by volume and 81% by value.

AA-sized alkalines are by far the biggest selling battery size, outselling AAA batteries by more than a factor of two. Sales of AA alkalines fell by 6.7%, with value down by just 0.68%, although average price increased by 6.5%. The multi-packs are most popular as almost two thirds (63%) of AA alkaline battery sales are represented by four-cell multipacks. Sales of AAA alkalines fell by almost 10% (9.6%), with value down 6.7%, although value was up 3%. The increase in average price is due to the marketing efforts by premium brands, which tempt customers with special offers. Lithium sales fell by 14%, with value down 6%, although average price was up by a healthy 9%.

“Alkaline cells are influenced most by price,” explains Lenny Wood, marketing manager, ANSMANN Energy UK. “With low brand loyalty and high availability, alkaline cells are a small high impulse buy. As with most impulse purchases, price will always be a motivating factor in this split-second decision making process. In addition, the wider known brands often employ buy-one-get-one-free deals which will keep the price low. The longer life lithium and rechargeable cells tend to be bought based on performance. These cells will usually draw a more informed consumer who will use research to make the purchase and often pay whatever is necessary to get the best.”

Protecting the environment

The combined effect of environmental concerns and pressures on consumers budgets wasn’t enough to stimulate the demand for rechargeable batteries, since in 2011 their sales volume was almost flat (-0.3%) while value declined by 2.9%. This was despite the fact that rechargeable technology has advanced considerably, offering cells ready to use straight from the pack, increased power and shorter charging times.

Varta’s Anthony Stewart explains: “Rechargeable batteries are still struggling to break out of the niche market and make up less than 10% of the market share. This may be down to the fact that recharging batteries requires pre-planning, remembering to charge them before they are needed. Of course, they also require consumers to purchase additional equipment with which to charge them. It is perhaps easy to understand why consumers would see primary batteries as an easier, quick fix option when given the choice.”

The leading brands and independent retailers are ideally positioned to educate customers about the benefits of rechargeable batteries. “In attempting to first supplement and then replace alkaline batteries, the ability to recharge a single cell up to 1000 times can have a significantly positive effect on the environment. Just one rechargeable cell can prevent up to 1000 alkaline cells going to landfill over its lifetime. As a logical extension from rechargeable batteries, ANSMANN also supplies Zero Watt chargers. These chargers will identify when your batteries are charged and then cut off the charger from the mains, saving money and the environment,“  says ANSMANN’S Lenny Wood.

It is also worth remembering that as of 1st June 2012, all portable secondary (rechargeable) batteries sold within the European Union must carry information about their minimum capacities, bringing to an end the transitional period for the introduction of EU Regulation 1103/2010.

Product developments

ANSMANN, who is at the forefront of high performance battery development, has recently introduced new product innovations, including ANSMANN X-Power alkaline batteries that provide a much longer lifecycle than a standard alkaline cell. The ANSMANN Extreme Lithium is another leap forward in the disposable range. As well as being 35% lighter, its capacity is approximately 300% greater than that of a standard alkaline cell. It can be stored without use for up to 10 years and can operate in  temperatures ranging from -40°C to +60°C. In the area of battery charging, the Digicharger Vario Pro is a premium all-in-one charging solution. Equipped with travel plug adaptors, and able to charge standard NiMH and Li-Ion cells, the Digicharger Vario Pro also has a USB port for charging a wide range of USB devices including smartphones and MP3 players.

Panasonic has recently extended its Evolta range, which includes the world’s number one long lasting AA alkaline battery – according to the Guinness World Records – to include a 9V alkaline product as well as a new rechargeable range.  In 2010, Panasonic redesigned their packaging to make it simpler for shoppers to select the right battery for their appliance.  In 2012, the company further clarified the process by renaming their ‘Standard Power’ batteries as ‘Everyday Power’ to communicate  that these batteries are ideal for commonly used devices. 

Celebrating 125 years of battery expertise this year, Varta has recently launched a new range of Ready2Use rechargeable batteries, a lithium-based battery range (that can be stored up to a decade), and a range of battery chargers for ‘on-the-go’ and ‘in the home’. The company’s chargers include: the V-Man Zero with adapters for Micro USB, Mini USB and selected Apple products, making it an ideal travel companion; the Power Station that can charge up to eight batteries at once; the Power Solar Charger; the V-Man Power Pack that can power the majority of mobile phones and MP3 players and the V-Man Home Station that can power-up the majority of gadgets including mobile phones. Meanwhile, Varta’s LCD Charger: shows the charge level of batteries.

Don’t miss the opportunity

In-store location and visibility are crucial in the market where majority of purchases are made on impulse. It is not suprising thereore that 40% of potenti
al battery sales are lost due to poor displays that confuse customers. Secondary PoS displays in high traffic areas, such as till points or front of the store, are also essential to drive impulse sales. 

However retailer’s expertise is equally important as many customers still don’t understand the benefits of products on offer. “Make the most of your face-to-face interaction and utilize your expertise. To the consumer, you are the expert. Use this trust to build a rapport and direct customers to those items you want to sell. This can often be a trump card against mass market sellers like supermarkets,” advises ANSMANN’S Lenny Wood.

Sales tips

•             Visibility is key. Half of all battery purchases are prompted by what shoppers see in store, so it pays to ensure that batteries are clearly visible.  Ideally locate them in two different areas, eg at the till as well as on shelf.

•             Grab shoppers’ attention with shelf wobblers and other in-store POS.

•             Displaying batteries by appliance can help your customers make their choice.

•             Stock the right range, including all five sizes of battery – AA, AAA, C, D and 9V.

•             Always site AA batteries at eye level.

•             Cross promote batteries with other product categories to drive sales.

        

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