Endcaps: negotiation, placement, performance (Guide)

No matter what industry you operate in, product highlighting is fundamental, both to boost your special offers and to improve the performance of your overall assortment.

‍For both brands and points of sale, the endcap represents the best asset to achieve these commercial objectives.

But you still need to master its codes!

Today, Sidely takes a complete look at the subject: 

• Why the endcap is so strategic;

• How to successfully set up your endcap displays;

• How to negotiate them with your distributors.

Let's go!

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Endcaps: definition and challenges for brands

In retail, a gondola refers to a shelving unit used to display products in stores. It is generally composed of several shelves and is arranged in aisles to optimize the sales area. 

There are three main types of gondolas:

• the central gondola, placed in the middle of the store;

• the wall gondola, backed against a wall;

• the endcap, positioned at the end of an aisle, facing the main pathways.

It is this last one, the most strategic, that interests us here.

Comparative table of gondola types

Whether placed in an aisle, a central zone, or near the checkouts, the endcap benefits from increased visibility within the point of sale, and its particularly high traffic rate makes it a prime location for merchandising.

© Leonard Delehaye

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Generally mobile and independent, the endcap includes a distinct special structure separate from the rest of the shelving, such as an elevated platform, advertising panels, promotional posters, or special displays.

The endcap side panel (or wing) is a POS display element that fits on the sides of the endcap, optimizing product visibility and influencing purchasing decisions. It increases merchandising impact without requiring more linear space.

In certain retail sectors (grocery stores, pharmacies, toy stores), the endcap is used to display bulk products in order to stimulate impulse buying and boost promotions.

📷 Thomas Riou

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The benefits of the endcap

Manufacturers and retailers have many strategic reasons to leverage endcaps: 

• Launch and promotion: increase the visibility of new products and special offers;

• Seasonality: boost sales during key events and showcase flagship products;

• Complementary products: encourage bundled purchases;

• Margin on private labels: highlight highly profitable private label brands;

• Inventory clearance and price testing: accelerate product rotation and assess price elasticity;

• Customer journey optimization: target strategic locations to capture attention;

• Introduction of new lines: facilitate the adoption of new items;

• Showcasing best-sellers: reinforce the success of top-selling products;

• Commercial operations: increase the impact of in-store promotional offers.

Success with your endcaps: Sidely's tips

Let's now look at how to set up an endcap.

To succeed with your endcaps, you will need to proceed in four stages: 

• Select the products: choose references consistent with your commercial strategy, not just promotions.

• Design the endcap: carefully craft the presentation to make it a true brand showcase.

• Install and restock: place the endcap in the right spot and keep it always full and attractive.

• Track performance: measure results in-store to manage the return on investment.

Now, let's detail each of these steps.

1. Alignment of the assortment with commercial objectives

The endcap has a driving role for manufacturers; in addition to driving sales of one or more products highlighted on the display, it also propels the brand into the spotlight, and can increase sales of your products present in other aisles of the store. This is called the mere-exposure effect.

‍Beyond boosting your brand's performance, the endcap has the power to draw traffic into adjacent areas, and therefore energize an adjoining category or aisle. This is often the argument to put forward in discussions with points of sale, as we will see below.

 For the brand, the choice of products to place on the endcap is therefore linked to the assortment strategy, and the implementation plan must be aligned with the commercial strategy. This makes it a key topic for category management, because the entire profitability of the assortment is at stake.

The exercise is therefore complex; it is far from the standard approach of simply pushing promotions or popular products.

‍Finally, when it comes to cross-merchandising, some brands partner with other players offering complementary products, a flagship technique to increase sales within a packaged offer. This is known as cross-promotions.‍

2. Design and brand experience

The endcap is also a vehicle for branding and visual identity. By creating a strong universe, you make the brand's culture and values shine. Design therefore takes on full significance in this stylistic exercise!

If your distributors accept a custom design, you can maximize the effect of your in-store displays, and thus play on sensory marketing. An exceptional endcap is always synonymous with a unique experience for the consumer.

© CDI IBENSE

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However, be careful not to systematically overload the endcap. Sometimes, it is better to keep an airy display, with a pyramid effect that boosts the sales of a leading product. A structured presentation is also preferred, with the largest items at the bottom and the smallest at the top.

‍The clarity of signage and POS elements are key: use posters or tags to attract the eye, with information about the promotion or the product's specificity. Bright, contrasting colors can help capture attention, especially for promotions.

‍Finally, incorporating interactivity and digital elements is very trendy: adding digital screens or QR codes can provide information in an innovative and fun way!

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3. Setup and restocking

The organization of your endcap obeys well-known rules in the world of merchandising:

• Products at eye level are the most visible and naturally attract attention;

• Ideally, place the endcap near the entrance or in high-traffic areas;

• Ensure the area is well-lit and clear for optimal visibility;

• Depth of field can also have a significant impact. In the end, the dimensions and the mass effect will depend on the area in which the endcap is located.

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‍It is crucial to ensure the compliance of the endcap with the brand's merchandising plan.

To this end, write guides for field teams (sales reps, department managers) to ensure the proper setup of endcaps, including: 

• The obligations of each party: shelving, storage, etc.;

• The aesthetic aspect, lighting;

• The organization of products on different levels, and the number of facings;

• A planogram showing the final layout;

• Merchandising: display plan, specific POS materials;

• Positive facing: if possible, face customers in the direction of traffic flow;

• Etc.

Restocking the endcap must be regular. Make sure to keep inventory up to date and constantly renew the endcap to maintain the mass effect.

The rotation of products can also be considered: for example, if several items are on promotion, try rotating them to maintain the endcap's appeal over time.‍

4. Tracking the performance of your endcaps in-store

During field visits, your sales reps perform shelf and merchandising audits. The exercise also applies to endcaps. And when profitability is at stake, there's no room for guesswork!

Here are 3 exclusive benefits of Sidely CRM for brands present in retail: 

1. Merch Auditing: facilitate and secure the feedback of information from the shelves, thanks to forms perfectly adapted to your business challenges. Our mobile app makes shelf auditing almost instantaneous, with or without a connection. You only have to pick from our library and use the audit templates and conditional surveys adapted to your network (grocery, specialty retail, and food service) or your industry (parapharmacy, food and beverage, spirits, etc.);

Endcap form on the Sidely mobile app

2. Financial analysis: locate merchandising displays to track and analyze investments and produce reports by point of sale;

3. Merch cost: calculate the weight of investments in endcaps and other POS materials for each product, product category, but also store, retailer, or even sales rep.

To complete these analyses, we finally recommend measuring the return on investment (ROI) of your endcaps using sell-out data (cash register sales) by comparing revenue before / after. Performance analysis will serve during future negotiation phases.

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Negotiating endcaps with distributors

Whatever your distribution network (grocery, food service, pharmacy, etc.), it is crucial to establish a commercial strategy for acquiring endcaps.

And for your distributors to grant you these strategic locations, you must list the arguments that will convince them. For retailers, endcaps are often synonymous with reduced margins on promotional products. However, an impactful in-store display - or an aggressive commercial offer - can boost the entire surrounding area.

You can therefore argue based on: 

• An increase in revenue in the area;

• An extension of the customer shopping path;

• An increase in the average basket value.

‍Ideally, leverage your customer data, polls, studies, mystery shopping... All means are good to convince the distributor that your endcap will boost sales.

‍Furthermore, try to highlight good performances achieved in other points of sale with similar setups. This is the moment to let sell-out data and other reports speak: inventory rotation rates, profit margins, repeat purchase rates, etc.

💡 Inflate your list of demands during negotiations so that endcaps remain despite the elimination of other conditions.

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The endcap in pharmacies and drugstores

Up to this point, we have mostly focused on mass retail. However, pharmacies and drugstores form a network of their own, with its own rules. The reasoning changes as soon as you leave mass retail: the sales space is more restricted, the customer journey centers around the counter, and above all, the pharmacist's advice remains central to the act of purchase. The endcap never replaces pharmacy recommendation there; it extends it.

Showcasing the Respire range on an endcap

Source: Mayence

What products to place on the endcap?

The endcap here concentrates on self-service products: dermocosmetics, dietary supplements, hygiene, and seasonal selections. Medicines, however, remain behind the counter, not self-service, a major regulatory difference from mass retail. For the brand, the challenge is therefore to capture attention on a high-margin offer or a new product, with a sober POS display and clear product information, without ever overloading an already constrained space.

Seasonality, your best leverage

This is undoubtedly the strongest specificity of the network. In pharmacies, key periods pace the year and dictate the allocation of locations:

• Sunscreens and mosquito repellents in spring and summer;

• Vitamins, immunity, and supplements in autumn;

• Hygiene and lice treatment at back-to-school time;

• Slimming and detox in January.

Offering the right category at the right time is often the argument that unlocks an endcap.

Negotiating an endcap in pharmacies

Unlike mass retail, there is no single central buying office. Allocation is played out at two levels: groups and banners (Giphar, Aprium, Pharmavie…), which frame often national operations, and above all, the pharmacy owner, the final decision-maker in their point of sale. Your strategy must therefore combine an agreement at the group level and a real relationship of proximity with each owner, backed by proof of performance (rotations, sell-out) observed in comparable pharmacies.

In conclusion

You now know the many stakes surrounding the endcap for a manufacturer. After reviewing the definitions, best practices for design and implementation, as well as the best way to negotiate them, all that's left is to convince your distributors to grant you these privileged spaces in their stores!

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Need to discuss your retail execution or your sales performance? Contact our teams!

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