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June 10, 2025
Are Endcap Displays Too ‘Transactional’ in Stores?
Petco is taking a “more strategic” approach to endcap displays that better spreads the benefits across vendors, Petco, and in-store shoppers.
“Historically, our endcap displays were more transactional agreements with our vendors without a customer lens,” said Petco’s CEO, Joel Anderson, on the retailer’s first-quarter analyst call.
Instead, the pet chain will be implementing a “more strategic sales-focused approach that is mutually beneficial to Petco Health and Wellness Company, Inc., our vendor partners, and most importantly, our customers.”
Anderson elaborated, “We will leverage endcap displays to highlight newness, spotlight innovation, feature seasonal offerings, and promote value. I encourage all our vendors to bring forth ideas of newness and innovation that can create a physical spotlight for our customers’ needs to better serve their pets.”
Traditionally, endcap displays were reportedly used to liquidate close-outs, with Target and TJX Cos. among those still using some of their in-store endcaps for clearance purposes. However, retailers in recent decades have been taking advantage of the valuable in-store real estate to launch new products, highlight deals in major categories, or drive impulse purchases.
According to an Oracle study, products featured in an endcap display can experience up to a 93% jump in customer exposure. Oracle’s study found that just featuring a best seller on an endcap could drive a 32% lift in sales for that item, but understanding the category-level sales lift an endcap-featured item might have on other SKUs promises a significantly bigger return.
A university study led by researchers at the University of Indiana found that front endcap displays show the largest impact on category purchase, while shelf displays have the largest influence on brand choice.
PFI InStore, a provider of retail displays, said in a blog entry that endcaps are “great for the small, inexpensive sorts of items that customers may buy impulsively while in your store.”
Palmer Retail Solutions, a maker of fixtures and kiosks for retailers, wrote in a blog post, “Well-designed endcaps place advertised specials right at hand, where shoppers can easily find and grab them quickly. They create product awareness among customers not specifically looking for these items and encourage purchases of related items down an adjacent aisle. Displays that include a few complementary products can be particularly successful because they encourage shoppers to buy multiple items.”
Discussion Questions
Did Petco make the right call in moving away from “transactional agreements” with vendors to guide their endcap displays?
What’s your overall advice on maximizing the use of endcap displays and deciding which products to promote?
Poll
Loading …BrainTrust
Alex Walderman
Director of Business Development , SOLUM
Georganne Bender
Principal, KIZER & BENDER Speaking
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
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There is a balance to be struck. Endcaps are prime real estate and so brands will pay to be displayed on them, to push whatever they want to sell. However, at the same time, stores need to ensure that prominent displays are interesting, on trend and engaging for the shopper.
The other thing I would add is that Target – which is mentioned in the article as using some endcaps for close-outs – actually uses very few for this purpose. Target mostly uses endcaps to showcase new brands, for special promotions, for seasonal things, and for its own labels. Target is pretty good at using endcaps effectively.
Totally agree, Neil. Target understands the value of end caps. If Target uses an end cap for clearance merchandise it’s generally on the back of a gondola, not on a main aisle.
Yes, that’s right – they’re usually quite hidden from main aisles!
Correct. Target plans their all of their merchandising space very carefully. Endcaps are no exception. On the store adjacenies (store maps) some endcaps are managed by the departments they are in, some are managed by a seperate process as promotional space. Markdowns and close-outs, as you mentioned are on the back of gondolas and typically department specific. For the promotional space, considerations like brand and customer experience are strongly considered in awarding this space.
Historically, end caps have been the placement of choice for soft drinks, snacks, bakery, etc. In that regard, consumers win – price & convenience, brands win – enhanced sales, & retailers win – margins for coveted real estate.
Having said this, end caps can serve as an opportunity to develop meaningful differential advantage by showcasing innovative products unique to the market & the retailer.
Challenges include reduced vendor motivation for prominent displays, managing vendor relationships requiring more collaboration, and risks of inconsistent quality in endcap displays, affecting customer experience. To optimize endcap displays, promote high-margin or seasonal products, collaborate with vendors to align goals, and regularly monitor performance for data-driven decisions.
End caps are made for promotional goods. The items featured are specifically chosen for their sales potential because these fixtures are lake front property.
I disagree that end caps are “great for small, inexpensive items” because the real estate upon which they sit is too valuable. If you want to talk effective visual merchandising techniques for end caps, start with cross-merchandising.
I’m all for using end caps wisely and guiding paying brands on what types of products and offers can live in this prime real estate. Revenue from a brand that puts ineffective or mundane promos on an end cap can do more harm than good in terms of shopper perception of the store.
Effective end caps tell a clear story and, most importantly, help drive shoppers to adjacent products. These two factors offer a clear value proposition and build basket.
Agreed, Alex. I see far too many stores allowing end caps to become unattended with 5-7 different products and no visual story, or defaulting as a dropping point for poor selling product.
Simple, clear and compelling drives baskets and happy shoppers.
Endcaps are prime real estate spots that serve as discovery zones, significantly influencing consumer perceptions of a retailer’s offerings and innovation. In that sense, Petco is making an intelligent decision to “invite” their vendor partners to deliver on newness, innovation, and seasonal offerings through the lens of their customers. This approach not only boosts profits and drives shoppers deeper into adjacent categories but also builds customer loyalty. Why settle for sameness when you can create a win/win through an engaging and dynamic connection with shoppers?
Great commentary from the group, but there are 3 other endcap uses that haven’t been brought up, all of which are important for store operators and merchants to execute effectively: complimentary products that serve as a margin enhancer for the other product featured there (ie: high margin surge protector next to a low margin tv), proposed bundling (ie: 3-faced endcap with bread, peanut butter, and jelly), and as extra storage (ie: most stores don’t have enough shelf space for Coke and legitimately use a back end cap for inventory management). Any experienced merchant approaches endcaps as a fun challenge, to highlight new products, move old ones, and enhance their margin in the meantime.
The whole purpose of an endcap is to drive transactions. The focus should tell a compelling story – not a clearance one but brand, classification, trend, etc. Ideally this will more than cover the “rent” than Petco was receiving for the vendor agreements.
Not all endcaps are created equal. Endcaps facing the main aisles on high-traffic categories are far more valuable than those facing the back wall of the store. Petco is 100% right to move beyond what sounds like a “pay to play” approach to selling this promotional space without consideration of brand, messaging, or merchandising objectives. Space is a finite resource in a store, and highly visible space has great potential for brands and the retailer to build customer engagement and deliver value. Careful planning of these spaces will go a long way toward ensuring a balance of revenue and strong branded presentations.
Including retail brand, messaging and merchandising objectives for end caps are crucial to aligning customers to overarching retail promises being made.
End caps = high visibility. High visibility = Discovery & Differentiation. Treasure hunt, or Discovery, or sometimes I express it as Explore + Experiment, are all opportunities to delight and inform the customer. Sure, take advantage of the opportunity to generate impulse sales, but don’t underestimate the opportunity to maximize Discovery & Differentiation in the minds of your customers. Those aren’t the words that will pop into the customers mind when they reach for their car keys, but they will develop a sense that your store offers the surprise and delight shopping experience that separates you from the pack.
It’s smart of Petco to reframe endcaps as strategic points in the shopping journey. When done right, they spotlight new products, reinforce brand relevance, drive impulse, and guide in-store discovery. I think the key for them will be balancing vendor agreements to support sales while keeping the customer experience front and center.
Re-thinking a strategic approach to endcaps is great thought leadership. There may remain an opportunity to receive marketing allowances or funds from key vendors. However, investing those funds in items that strengthens a retailers brand and Value proposition is much more important than clearing out some aging merchandise. Endcaps and the adjacent items in the aisle make up a notable percent of items in a shoppers basket. End caps make up less than 2-5% of the selling space in most stores but the units in a shoppers basket selected from and end cap are more than 3 times the rest of the items in the basket as a percentage to the selling square footage in a store.
This space is the best space for a retailer to convey their value proposition and overall Brand message, in many cases, by only displaying quality products at a good value.
End caps are not only for promoting deals or for CPG brands to take center stage, but maybe even more a place for proof of claims retailers make about themselves.
If you claim you have incredible deals, the lowest prices, or the largest selection, then show it in simple displays and bold signage. If you have special products, partnerships, and brands few competitors can match, then show this on your end caps to prove to customers you are delivering on your claims. End caps are an important part of telling your retail story.
End caps are some of the most valuable real estate inside any retail store. The effort to be more strategic in their use makes sense to me as a merchant. End Caps should be seasonally relevant, used to highlight newness and innovation, and should be used thoughtfully as a way to capture promotional funds that could not be utilized any other way. End Caps should also align to online promotions and serve to present to shoppers a solution to a need, or a fun new way to support their pets. They should not, generally, be used for clearance until the value and relevancy of the product are top-notch. Also, single-item end caps should be the standard, with only very rare exceptions.