Category Archives: self-service retail

The Americanization Of Popular Candy Retail

In order to successfully Americanize the innovative idea of modern candy and confectionery retail, the objective had to be an almost, but not quite, exaggerated variety of candy products, many choices of distinct and exciting candy flavors and experiences, including nostalgic, popular and even exotic hard and novelty candies.

To meet this objective a promising concept had to offer hundreds of different and well assorted self-service products that would succeed on a broad range of  impulses, memories and taste preferences of their potential customers. All of this had to be achieved in commercially justifiable self-service retail environments of in-line stores of not more than 600 to 800 square feet or, in more compact form, in a walk-around self-service kiosk with a 120 to 150 sq. ft. footprint.

Ideally, the breakdown of product mix would be approx. 50% wrapped and unwrapped bulk candies, both of these products producing the lion share of margins among the entire mix, 40% novelty candies because of their unbeatable popularity among younger buyers, plus 10% more upscale gifts for adults and special occasions.

Seasonal and visual merchandising changes would be made relatively frequently, first, to give the customers new choices of products and, second but equally important, to spontaneously create newly exciting retail atmospheres and invitations for the potential passer-by to stop, take a closer look and indulge him- or herself.

Candy retail history had demonstrated that lack of creative changes and samplings of product offerings and persistent enhancements of visual displays resulted in consumers’ perception of “wasting, stale and redundant” candies, which, in turn, did not offer sufficient incentive for a consumer to browse and spend his / her money. As a consequence of the traditional full service retail approach at arm’s length, only well known and the most basic and common candies in a limited selection sold without markedly increasing retail revenues and profits over a period of many lost decades. The Candico Theater would change all this dramatically and in a very, very short time span.

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“Less Is More”

  • Compared to most other retail products candy is a low-ticket item, often selling for just a few quarters. In-line store spaces in well-trafficked regional shopping centers were leasing at the time for $ 80.00 to $ 120.00 per square foot, including mall maintenance and marketing fees which were obligatory for all tenants. This meant that the lease agreement alone could cost some $ 500K to $ 800K over the typical lease term of 8 years. Of course, personally guaranteed by the lessee to the lessor. And they don’t come cheaper today.
  • Such high-value obligations could only be amortized with high sales volumes that had an unusually low cost of goods, by controlled leasing and operating costs and by realistic leasehold improvements. Lease and operating expenses were already established by free market forces and could not be manipulated downwards too much, if at all. However, sales volume, cost of goods and leasehold improvements [store construction], and especially the latter, could be favorably affected by efficient and creative store design, merchandising and management.
  • Petersen drew focused inspiration from a famous phrase which had been professionally practiced and popularized¬† by the German-American architect and visionary of minimalist design, Ludwig Mies von der Rohe: “Less Is More”. Mies, as he was called, was one of the pioneering masters of modern architecture and design who enjoyed worldwide renown.
  • “Less Is More”, in terms of its retail challenge, meant to generate as much repeat and sustainably increasing people traffic, revenue and profit within a consumer-friendly and inviting brick-and-mortar environment which, on one hand, could accommodate the desired consumer traffic but which, at the same time, limited costs of leasehold improvements and rent obligations.
  • The idea was simple while challenging: Customer self-service of a large variety of candy, novelty and gift products merchandised in a modular, stackable and highly space-efficient dispensing system which allowed for the largest count of stock-keeping units, SKU, was the conceptual answer. But could Petersen realize this conceptually and financially? More soon …

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“Take Common Candy And Make It Uncommon!”

  • The realization of this paraphrased quote from John D. Rockefeller’s words, “Take Something Common and make it Uncommon!”, presented a once-in-a-life creative window of opportunity when Petersen began to build on his observations at that fateful time in Hamburg, Germany.The quote represents the essence of Petersen’s visionary candy retail concept and a newly invented and powerful niche business was being developed and started soon.
  • Hard candies, soft gummies and candy novelties had been retailing for decades with a low profile and restrained image, mostly with full service from behind cash counters at an obscure distance from the customer. This undefined product presentation and the lack of immediate visibility of, and access to, the candy products, more so in America than in Europe, totally missed what we refer to today as an “in-your-face” presentation that prompts consumers to impulse purchases and to repeat visits to their favorite source of candy and confectionery.
  • During two years of observation and research of the candy retail industry Petersen realized that the potential of the mini-candy-store concept in Hamburg could be vastly improved by injecting some basic but crucial conceptual and operational ingredients for the American marketplace. These included, above all, self-service pick & mix retail from a large variety of bulk, novelty, gift and seasonal candies and confectioneries, a high margin single price policy at 1/4 pound for all bulk candies, proprietary and hygienic self-service retail fixtures, plus upbeat store design and interactive environment in popular and high-traffic locations.

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