The batteries market has been evolving in line with the CE products its supports. Yet, many consumers are unaware of the solutions on offer and the fact that value for money in this sector does not equal a cheap price. Anna Ryland reports.
The battery category represents an excellent opportunity for all retailers. The profit from selling one four-pack of standard alkaline batteries is equivalent to that from selling 17 chocolate bars,” argues Emily Smith, Energizer marketing manager.
Brits are gluttons for consumer electronics and a nation of gadget lovers. An average UK home owns around 30 battery-powered devices, while 89% of households have at least one digital product. This means that consumers need more long lasting batteries for high drain devices and chargers that will help them work and play on the move.
Gaming becomes the fastest growing area for battery-operated products. “The trend towards more high-drain gadgets and in-home gaming is proving an excellent opportunity to boost battery sales. This is particularly true in the high performance sector, which is delivering powerful growth (16%) as people discover that better performance means better value, “says Energizer’s Emily Smith.
Yet, the recessionary pressures have led to the emergence of very cost conscious consumers, some of whom search for low price products in bargain retailers.
“A very real and significant issue for the batteries sector is that it remains driven by confused consumers – and retailers – who are tempted by quantity rather than quality and are more inclined to buy – or stock – cheap, imported multipacks of batteries over the more expensive, branded alternatives which are higher performing,” comments Vince Armitage, divisional vice president of Varta Consumer Batteries.
He also points out this search for a ‘good deal’ has led to the reappearance of lower performance zinc carbon batteries on the market which make up the vast majority of cheap multipacks sold in discount stores but do not have the lasting power of the more expensive, higher performing alternatives.
These economic factors together with the widespread ‘green consciousness’ have lead to further development of rechargeable technology. The latest rechargeable batteries are not only more powerful than ever before but also more convenient. Battery manufactures such as Energizer, Panasonic and Varta all now have cells which can be used straight from the pack and they also offer chargers to power batteries in less time. However, growth in this sector is hampered by inadequate consumer knowledge. Therefore it is key to point out to them that rechargeable products provide greater value for money in the longer term and represent a green solution to their needs.
Ansmann Energy, a German manufacturer of specialist rechargeable batteries targeting the more discerning technical users such as photographers, electricians and campers, offers cells with the capacity that’s four times larger than mass market batteries, providing an operating time that’s four times longer.
The biggest growth the company has seen is in the Low Self Discharge (LSD) ranges such as their MaxE brand.
Users wanting to switch between a disposable battery to more environmentally friendly rechargeable cells have been frustrated with high capacity, longer operating cells that have not stayed charged when left in equipment. The LSD cell combats this by offering ready-to-use out of the pack cells retaining up to one year of charge when not used.
“Rechargeable batteries have experienced a change in popularity from a volume decline of 2.6% in 2010 to grow each month bar one (-0.3% vol. April 2011) this year, with June showing the peak at 6.1% volume growth year on year. Unfortunately the same cannot be said for value, with a year-on-year decrease in value every month except for January 2011 (recording a 3.7% growth),” comments, Peter Hunt, GfK analyst.
In 2010, rechargeables accounted for only 3.3% of the market by volume and 8.7% by value.
Market performance
According to GfK market intelligence, in 2010 (January 2010 – December 2010) the total battery market was stable (down by merely 0.3%) to 81 million pieces, with value increasing by 5.5% to £251 million and average price rising by 5.8% to £3. The value growth has been driven by aggressive marketing campaigns of premium brand manufacturers. Alkaline sales were up by 0.9% to 69 million pieces, but their value rose 6.3% to £204 million. Average price was also up 5.3% to £3.
Alkaline batteries dominate the battery market and they account for 85% of the market by volume and 81% by value. AA-sized batteries take 50% of the market by volume, with AAA accounting for 21%. Four-cell multi-packs account for 51% of the market by volume and 46% by value.
In the recession, sales of zinc batteries might be expected to rise, but in fact, this sector declined in both volume (down 14.1% to 4.4 million pieces) and value (down 4.3% to £4.9 million). Average price was up 11.3% to £1. Sales of lithium batteries were down 1.8% to 4.4 million pieces, with value up 2.8% to £17 million. Average price was up almost 5% (4.7%) to £4.
What’s on offer
In the Panasonic portfolio, Evolta AA battery takes a special place. Since 2008, it has maintained its position as the world’s number one long lasting AA alkaline battery, according to the Guinness World Records, having outperformed competitors in a number of industry tests. Evolta batteries benefit from technical innovations which reduce the bubbles from the anode, resulting in an ultra high density filling of active materials.
Panasonic’s Pro Power battery offers premium energy for personal appliances while Standard Power battery is a solution for commonly used devices. Panasonic’s Alkaline Power battery is a value for money offer from the manufacturer.
Energizer has launched its new brand identity in 2010 to educate consumers and retailers about applications for the various battery types and to drive sales across Energizer’s diverse range.
Central to this initiative, was a revised packaging design that includes icons indicating which battery is most appropriate for a particular device. For example, the Energizer Ultra+ packs include icons depicting low-drain products such as a clock or torch, while the Energizer Ultimate Lithium icons show high-tech devices such as gaming controllers and digital cameras.
Energizer has also segmented its battery offering into its six lines, including Specialist, Ultra+, High Tech, Ultimate Lithium and Rechargeables, as well as torches, across the portable energy category. Currently, Energizer is the number one manufacturer in five of these six segments.
Varta also has a very broad portfolio of products. It includes alkaline batteries in three performance levels, Ready2Use rechargeable batteries, powerful lithium cells, charging stations, torches and speciality batteries.
Available in AA, AAA, C, D, 9V, Varta’s alkaline Tri-Energy batteries come in three levels of performance. The Longlife range provides long lasting power for devices with steady energy demands such as alarm clocks or remote controls. The High Energy range is ideal for power hungry devices, such as digital radios. The Max Tech series is for high-tech products with precise energy demands such as digital cameras and MP3 players.
Varta’s new lithium range is available in 1.5 volt AA and AAA batteries and 9V blocks. A high energetic density gives a lithium battery greater capacity, so compared to conventional alkaline batteries, lithium AA batteries last up to seven times longer and lithium AAA batteries last up to four times longer in digital cameras.
Secrets to successful sales
To take a full advantage of the batteries market, retailers should stock a selection of th
e most popular products, with approximately 80% of the category space given to AA and AAA batteries. The different sizes of batteries should be separated and labelled to avoid confusion as incorrect purchases will frustrate the consumer.
“Stocking too many different brands with the same price points and positioning doesn’t work. The recommended approach is to rationalise the offering and only stock a primary and secondary brand, giving the consumer two clear options based either on performance, brand or price,” recommends Varta’s Vince Armitage.
Under the Batteries Directive, retailers selling over 32kg should have a visible battery collection point. In this way retailers display their green credentials and prompt the ‘bring and buy effect’. If a customer has just disposed of their old batteries, chances are high that they will need replacing.
“The location of the batteries stand is of prime importance. Ideally, this would be within a consumer’s eye line and situated at an appropriate place within the store – beside products which need batteries for example – or near the entrance or exit of a store. A secondary location has been proven to increase sales by up to 33% as it gives the retailer the opportunity to target customers twice during their retail journey,” advises Vince Armitage.
“Grab shoppers’ attention with shelf-wobblers and other in-store PoS material,” suggests Tim Clark, sales manger for UK and Ireland Panasonic Energy.
The product information and price should be clearly displayed and easy to understand so consumers can make an informed decision. At the same time staff should be well educated to advise customers on the different products, technologies and price points available so they can make the correct purchase for their needs.
“Battery sales at Christmas present a significant opportunity for retailers, with 35% of the total year’s sales coming in October, November and December. Toys sales are an especially strong influence on battery sales at Christmas, with many toys being battery powered. A survey commissioned by Panasonic revealed that 75% of customers would welcome a prompt from a retailer to remind them to top-up on batteries when making a grocery purchase,” conculdes Panasonic’s Tim Clark.
The Battery Directive updated
Under the Directive, retailers selling over 32kg of portable batteries per year must provide free in-store battery collection facilities for members of the public. The mandatory battery collection country target is 25% for 2012 and 45% for 2016.
The UK has set interim, non-statutory targets for compliance schemes to hit, the first being to collect 10% of the batteries their producer members place on the market in 2010, and 18% in 2011. In March, it was confirmed that the 2010 collection rate was achieved – but only just. There is a lot of work still to do and retailers have an important role to play in helping the UK achieve its targets.
