Camera Batteries

The drug store channel wears many hats in serving the needs of consumers. And in the case of batteries, that means offering value products as an opening price point, balanced with a wide assortment of nationally recognized brands.

The category has one of the highest household penetration points, about 90 percent, compared with toilet tissue, which runs about 96 percent. But while toilet tissue serves one main function, battery tasks span restoring one's hearing to powering an MP3 player at full blast. Battery sales also fluctuate greatly by season, and this month begins an upswing as March leads into the start of spring and an in crease in outdoor activities, followed by Easter, and then into May and June with graduation, Mother's Day, Father's Day and summer vacation.

While a large segment of consumers buy solely based on price, others want convenience, value and performance and tend to stick to a well-known national brand. The third type of shopper is a heavy user of high-tech, high-drain devices, looks for superior-performance batteries and is willing to pay for what he or she gets. And what that boils down to is power.

Juiced by two AA batteries, Panasonic powered a 40-pound car with a 100-pound driver across the showroom floor at the Consumer Electronics Show in Las Vegas in January to highlight its newest battery. With no major new technologies introduced since the arrival of the alkaline battery more than 40 years ago, the category needed the adrenaline shot to keep pace with rapid advances in technology that left alkaline in the dust.

Panasonic's Oxyride Extreme Power represents next-generation technology eight years in the making, with oxy nickel hydroxide, manganese dioxide and graphite. "Alkaline years ago overtook the heavy-duty battery. We feel Oxyride one day will take over where alkaline is," said Brian Kimberlin, director of marketing for Panasonic Battery Group. We think we can grow the category with this product.

Panasonic is positioning Oxyride as an alternative to premium-priced alkaline batteries like Duracell Ultra and Energizer e2 Lithium batteries, which, along with Energizer rechargeable batteries, are leading the category in growth, according to the Gillette Co.

Shipping to U.S. retailers sometime between May and June, Oxyride has been on the market in Japan for about a year, gaining 10 percent of market share there. It powers twice as many photos as an alkaline battery in a digital still camera, but it also costs about 20 percent more to manufacture than alkaline. Priced at a premium, trial becomes a key factor in getting the product into consumers' hands.

Batteries offering instant power, such as Oxyride, will compete with, and in some instances complement, rechargeable batteries, a category with steady double-digit growth spawned by digital cameras.

New kid on the block Winner International, maker of The Club steering wheel lock, recently introduced Juice brand rechargeable batteries, targeting the portable-device battery market, which, according to Winner, is projected to hit $9 billion by 2010. The company also signed an exclusive, three-year e-commerce-based sponsorship with last year's National Basketball Association rookie-of-the-year LeBron James and is planning to launch special LeBron James collectors' packaging.

And while far from new, there also has been a recent reemergence of heavy-duty zinc batteries, which pre-date alkaline, driven in large part by the influence of dollar stores. "To a consumer, the name 'heavy duty' sounds like it should provide a strong, long-lasting performance, said Kara Salzillo, manager of brand communications for Duracell. "However, in actuality, heavy-duty batteries are inferior to alkaline."

In the last quarter of 2004, Duracell launched a print and radio campaign to educate consumers on the facts about heavy duty. "When consumers learn of the performance difference, either through personal experience or education, their perceptions change dramatically, and their preference for alkaline rises accordingly," said Salzillo.

For retailers, point-of-purchase material can be crucial in illustrating the difference between batteries and performance. For manufacturers, adding icons on packaging becomes a critical way to educate consumers whether a battery should be used for a digital still camera or a smoke alarm. That, in turn, leads to increased satisfaction with the product.

Creating battery "homes" in high-traffic locations and building a strong visual presence in secondary locations also helps retailers convert shoppers to buyers of batteries. Lou Martire, vice president of trade development for Energizer, said some large discounters have had more success merchandising batteries in the center of a main aisle, for instance, compared, with the hardware section. The average dollar volume per week rose in one of these stores by 13 percent, said Martire. "These concepts can be adopted and applied to other classes of trade, as well."

Energizer studies have shown batteries sell well in departments outside of those that sell battery-operated devices, such as near cleaning supplies or health and beauty aid products and also in pantry areas. The pharmacy department in drug, along with photo, also makes sense because of its destination status.

Items like Duracell's new lithium-chemistry battery CP1 provide the perfect tie-in with photo. The company worked with camera makers including Nikon, Samsung and Hewlett-Packard to design the 7-millimeter-thick CP1 to fit some of today's sleekest, slimmest digital cameras.

Salzillo refers to secondary battery locations like photo as discovery locations. Top retailers know where their shoppers expect to find batteries and where their prime prospects are for converting, extra shoppers, to purchasers, said Salzillo. Seasonal aisles also represent a good discovery location for batteries."

John Daggett, director of corporate communications for Rayovac, said that with Easter at the end of the month, adding clip-strips near Easter candy provides another discovery location. Daggett suggested that with summer around the corner, retailers also add clip strips, which take up little space and keep the floors and aisles clear, next to impulse items, such as beach pails or folding chairs. And for back-to-school, he recommends putting clip-strips with school supplies.

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