HFSS: not only a cumbersome acronym, but a hurdle at the end of what has been a long steeplechase for grocery retail. For both brands and retailers, there is a fear of the changes the new regulation brings. As many as 43% say they feel unprepared, according to IGD. However, we cannot miss the opportunities a revolution like this could bring.
As the implementation date looms, we can be thankful the retail sector is well equipped to handle change – an especially impressive feat after the last two years. Notably, several retailers have proactively set up a variety of stores to test different approaches to the legislation. Among the handful of test stores spotted by the trade press and fellow grocery retail fanatics, we have seen clever solutions and innovation to give us a flavour of what the future may look like.
The changes to end space perhaps pose the greatest challenge for retailers and brands alike – yet there are solutions emerging. A quick win retailers are weighing up is how HFSS-compliant BWS, household or grocery lines can occupy this space. These categories are appealing for retailers from an operational point of view, as products often come in wholesale pack sizes, allowing pallets to be displayed on ends. Furthermore, utilising this space enables retailers to demonstrate value through key products to customers, especially those in larger households who are seeking bigger buys.
That doesn’t mean we’ll be walking down a centre aisle full of pallets like a wholesaler, though. Merchandising teams are looking for other options too. Expect to see ends made up of composite elements: trade-driving pallets, HFSS-compliant products on promotion, and new permanent signage or brand zones. The latter could lead to some exciting changes in retail media – could we see digital screens at the end of aisles, or permanent signage for brands? Sainsbury’s has erected some permanent signage linked to their brand comms at the end of aisle, so brands should consider how they may leverage these types of activations in the future.
The changes to what is possible for brands on aisle ends seem monumental, given some brands will now find themselves solely in-aisle. For some, particularly those who are regulars on end, this may feel like the ringing of a death knell. Yet there are solutions.
For the larger brands, brand-blocking will be key. Some retailers have added new shelving units in-aisle with taller shelves that allow for more SRPs (shelf-ready packaging) filled with key SKUs to be merchandised. Utilising Cadbury and its distinctive purple, Tesco has been trialling this with the addition of a yellow frame around the shelving unit – a simple visual signal to shoppers already primed to look for the colour yellow as a sign of value in their stores.
Creating a visual spectacle around these shelves with floor stickers, a digital screen or taking it into the digital sphere with an AR filter will create exciting and dynamic in-aisle destinations. This does not mean smaller brands will be eclipsed – quite the contrary. With increased in-aisle footfall in categories such as confectionery, which usually trade well on end, there is an opportunity for smaller brands.
Commerce marketing strategies need to be revisited to ensure brands and all their products have a sound plan in place to navigate these changes. Shoppers may not understand a planogram, but they will sense the changes throughout their usual shopper journey. Brands can succeed by staying front of mind, being helpful to shoppers, and delivering bold, well-considered PoS executions or merchandising solutions. More opportunities will arise as HFSS changes begin to take effect, and already retailers are testing other new solutions such as expanded power aisles and alternative convenience planograms.
The testing and teething problems of implementation – never mind the still-malingering questions over e-commerce – will continue for the rest of 2022. In the meantime, brands should get ahead of the curve. Now is the time to test different approaches, reconsider commerce marketing strategies, and take a positive, proactive approach. From ends to aisles, the changes will be sweeping, but the opportunities are there.