
Celebrating Candy
At Party America
Expert confections category merchandising helps this
fast-growing retail chain deliver complete party planning solutions to its
customers. By Mary Ellen Kuhn
Hearing Party America
described as the “nation’s No. 2 party store chain”
doesn’t sit all that well with the folks at the company’s
Alameda, Calif., headquarters.
Sure, Party America is second in size to the 506-store
Party City chain, which has revenues in excess of $1 billion. But the
committed, upbeat staffers at Party America don’t think of themselves
as second-class citizens in the realm of party goods merchandising.
And rightly so. The chain is a merchandising award
winner on the retailing fast track. Thanks to a series of acquisitions made
in the past two years, Party America has grown from a regional chain of 36
stores with sales of about $55 million to a national chain with stores in
45 states and sales of more than $225 million.
Candy gets prime location
Candy occupies an exalted position adjacent to the
high traffic balloon bar in Party America stores. Inflated balloons are the
chain’s stock and trade, so the location is “prime real
estate” in the store, reports Dale Cuevas, divisional merchandise
manager, everyday merchandise.
The 12-foot candy set includes everything from
five-pound bags of Kiddie Mix assorted candy to the popular mini gummi
hamburgers, hot dogs, and pizza SKUs priced at 20 cents each.
The sandwich and pizza gummies “sell
phenomenally,” reports Cheryl Mitchener, buyer, everyday merchandise.
“People buy them 20 or 30 at a time as treat bag stuffers,” she
says.
The Party America candy assortment includes
top-selling candy bars, kids’ novelty/interactive items, and plenty
of peg bags and laydown bags. The everyday candy set numbers between 150
and 200 SKUs. Price points for candy range from the previously mentioned 20
cents up to $9.99. In addition to the candy-aisle offerings, changemaker
items such as Ghirardelli Squares and Lindor Truffles are featured at the
checkout counters.
Licensed products are an especially important part of
the candy set, just as they are for the themed party goods the chain
stocks, and staying abreast of what’s hot in the licensing arena is
critical.
“We carry a great deal of licensed
product,” says Mitchener. “When moms are shopping for their
kids, the kids want a certain license. This summer, it’s going to be
Star Wars, and its great to have a candy to go with that. So we carry...all
of the big licenses that kids want.”
“We find that when there’s value, the moms
don’t mind spending a little bit of extra money for the
license,” says Cuevas.
License to experiment
“We are trying some different things,”
Cuevas continues. For example, the merchandisers just worked Disney
Princess Gummi Bracelets from Imagination Confections into a new princess
party goods set.
“We have a new princess merchandising section
that is just going out,” says Cuevas. “We are going to
incorporate those bracelets there and see how that performs.”
Cuevas and Mitchener see additional examples of candy
cross merchandising in the party chain’s future, particularly with
licensed products. “We may do that with the NASCAR line,”
Cuevas continues. “Or maybe something with Sponge Bob. You always
have to try something different.”
Positioning licensed candy within the various themed
party goods sets allows the chain to deliver on one of its primary
retailing objectives of simplifying the consumer’s shopping
experience.
“When you run in to plan your kid’s party,
a lot of times it is at the last minute or done on a lunch hour,”
says Cuevas. “We want to make that experience as complete and easy
and as fun as possible. So candy could be a vehicle for accomplishing
that...I don’t know that mom always has time to get the plates, cups,
napkins and party hats and then remembers to go to the candy aisle to see
if we have candy [to go with it]. But if it’s sitting in that set,
she’s much more apt to grab it as an incremental sale. So we’re
trying it.”
More secondary placements
Candy also is merchandised in Party America’s
wedding section. Along with gift wrap, favors, invitations and the like,
wedding goods shoppers will find bags of Pillow Mints from Sconza as well
as Wilton Mint Drops in peg bags and 32-ounce tubs of Richardson After
Dinner Mints.
One of Party America’s biggest confectionery
success stories has come in the colorfully whimsical form of Twinkle Candy
lollipops. “They retail for just 35 cents,” says Mitchener,
“but we sell hundreds of them at a time. People will come in and buy
50 or 100 and make bouquets or centerpieces out of them...or use them as a
decoration on top of their package. That’s really something that has
crossed over...even though it’s in the candy department, it works in
gift wrap to go with your bow or as a centerpiece. So those have been
really great for us.”
Twinkle Candy pops currently are merchandised in the
store in an innovative display rack that resembles a floral merchandising
fixture, with the pops positioned in rows of vase-like containers. In
addition to the individual pops, a Twinkle Candy lollipop bouquet sells for
$4.59.
The baby-themed pops (in shapes such as teddy bears
and tiny feet) have been a big hit, so Mitchener and Cuevas have added them
into the plan-o-gram for baby shower party goods. The pops will be
showcased in customized fixtures attached at both ends of the baby set.
In addition to the everyday candy SKUs, Party America
stocks a healthy assortment of seasonal candy offerings. In fact, seasonal
products account for 26 percent of total candy sales. As is the case with
the everyday assortment, the top-selling seasonal SKUs are
novelty-interactive items.
One percent better
The Party America team is led by CEO Marty Allen and
Executive Vice President/General Merchandise Manager Alice Tang, who came
on board eight years ago to turn around the then struggling (and much
smaller) chain. Creative merchandising and responsiveness to customers are
at the core of Allen’s and Tang’s retailing vision.
The stores are spacious and colorful. The superstore
format stores—which boast wide aisles and distinctive overhead
lighting fixtures arranged in a zigzag pattern—are built for customer
comfort and deliver the “It’s a party!” message loud and
clear. Even the restrooms are decorated to reflect the appropriate season.
(It was luau time when Confectioner visited.)
Among the chain’s most popular perks is its
practice of providing free refills for balloons purchased online at the
Party America web site or for those purchased in the stores within the past
30 days. Party America also offers free helium-filled balloons to young
store patrons.
“One of our CEO’s big things is that you
can’t do anything 100 percent better, so you try to do 100 things 1
percent better,” notes Cuevas.
Despite his CEO status, Allen works to stay in close
contact with consumers. “All of the customer service calls that come
in go directly to our CEO,” Cuevas reports. “He addresses
them—to make sure that if there are any kinds of issues, that they
are resolved. Luckily those are few and far between, but he feels that he
needs to be involved.”
Working with vendors
Assembling an all-star candy assortment—complete
with all the latest and greatest licensed candy SKUs—is challenging
job for Mitchener because she purchases not only candy, but about a dozen
other product categories as well. She and
Cuevas both try to manage their vendor relationships efficiently.
“We love to entertain vendors because you learn
a lot,” says Cuevas. However, he continues: “We run a
very lean organization, so our policy on appointments is this. We try to
accommodate vendors, but we also don’t want them to fly out here and
do big presentations if we can’t react to what they’re showing.
So once the candy assortment is set and done, we would want to touch base
with them just to get an update of what’s new, what’s fresh,
what’s available. That doesn’t always require an on-site
visit.”
“I like to see catalogs and samples before we
ever sit down for a meeting,” says Mitchener, “because we
don’t want to waste their time if it’s not going to be
something appropriate for us.”
Trade shows are another great opportunity for checking
out new products, of course. Mitchener is a big fan of the All Candy Expo.
“I’ve been to a lot of candy shows,”
she says, “and I think All Candy Expo is the most appropriate for our
industry. The All Candy Expo is full of the kinds of products we need to
see.”
Looking forward
Cuevas and Mitchener see candy as a growth
opportunity.
“We have the potential to grow exponentially as
a category in the party industry, I
think,” says Cuevas. “It has a lot
of do with keeping the assortment fresh and keeping up with the newest
licenses.” The same can be said of Party America’s positioning
in the marketplace. “I think one of the keys is to have something
new, something different, something fresh—and to offer depth and
breadth of assortment,” summarizes Cuevas. n
Party America’s Fast-Track Growth
Party America’s recent dramatic growth has come
via two major acquisitions.
In October 2004, Party America purchased
Wisconsin-based Party Concepts, which added 160 stores. They operate under
the names Great Party, Paper Factory and Paper Outlet.
Just about a year prior to that, the company had
purchased Minneapolis-based Paper Warehouse, which added about 100 stores.
With that acquisition, the chain got into franchising. Party America
currently has more than 60 franchises and is making them available
throughout the United Sates and internationally.
Dale Cuevas
Title: Divisional Merchandise Manager, Everyday Merchandise
Academic Credentials: B.S.
in Business Administration, University of Southern Mississippi
Career Track: Cuevas
started as a buyer for Dole Foods and worked his way up through the
procurement and logistics organization of that corporation. Was named to
the “International Who’s Who of Professional Managers.”
After realizing that life was moving too quickly, he decided to take some
personal time to relax, experience something new and enjoy himself. He
moved to Alameda, Calif., and found an opportunity at Party America. He
started as a buyer, and in the wake of Party America’s recent
acquisitions, was promoted to his current post.
Words to Live By: A
sense of humor is part of the art of leadership, getting along with people
and getting things done.
Best Thing About Working for a Party Chain: It’s a PARTY chain!
Favorite Party Theme:
Hollywood/Oscars
Cheryl Mitchener
Title: Buyer, Everyday
Merchandise
Academic Credentials: Bachelor’s
degree in International Business, California State University
Career Track: A
relative newcomer to Party America, Mitchener has been on the job for just
seven months. She has ample experience as a retail buyer, however, having
worked in that capacity for Macy’s Department Stores for six years,
and also for the Duty Free Shops chain.
Words to Live By: Life
is too important to take seriously.
Best Thing About Working for a Party Store Chain: The variety of merchandise
Favorite Party Theme: 70s
Disco