Optimising Sales And Brands In Liquor Stores
By Shopportunity: TorchMedia’s shopper behaviour and marketing partners. Visit http://www.sh-opportunity.com.au/
Most adult Australian shoppers visit a liquor store on a regular basis. And they don’t just buy liquor. Manufacturers of ‘impulse purchase’ items have been looking to liquor stores to drive additional value for quite some time - from chocolate-coated macadamias, salmon dips and olives through to chips, soft drinks and dinner party gifts.
So, what do you need to know about this channel to determine whether your brand and category can benefit?
Firstly, the Australian liquor channel is relatively sophisticated on a world scale – particularly when compared to liquor in the USA. In Australia, we have large chains and banners (unlike the USA) and a number of different store formats, each attracting different kind of shoppers and behaviours.
SNAPSHOT: ABOUT LIQUOR SHOPPERS
Who shops in liquor stores?
‘Stand alone’ bottleshops such as Bottlemarts, Liquorland and BWS tend to attract more male shoppers. Drivethru formats in particular skew male. On the other hand, liquor stores that are attached / directly next to supermarkets (such as Woolworths Liquor) are a more even mix, or even skew slightly female.
The core age group in the liquor channel is 25-49 years. There is a cross section of incomes, with no particular income skews (this tends to vary by category and price point, as well as by socioeconomic area).
How do shoppers choose the store?
Firstly, whichever store is closest to work or home or is ‘on the way’ to their dinner destination. Secondly, it must have the range (of recognised brands) the shopper needs– ‘I know that they’re likely to have what I’m looking for.’ A third reason is that staff know and acknowledge the shopper.
Store choice is generally not based on price except when driven by catalogue specials (particularly for scotch) or in lower socio economic areas.
What do shoppers buy?
Ready to drink premixes (RTDs), until the recent tax excise and subsequent price increase, had overtaken full-strength glass spirits and were approaching wine in terms of category size. However the recent price increases have seen RTD sales shift back into glass spirits. The biggest category is beer, followed by wine, then rtd, then glass spirits.
What is bought differs markedly by age bracket and gender – no surprises that male shopping baskets are beer dominant, for example. Female shopping baskets tend to be wine dominant, although a sizeable portion of female shopping baskets include beer because they are shopping for the household. RTDs are mainly purchased by 18-30s, while spirits skew older.
Category trends in the Australian Liquor Channel
There are four main category areas within the liquor channel. Within that, there is a great deal of variety. So what is growing and what is declining?
Beer:
· Imports (Corona, Stella) and domestic premiums (Boags, James Squire, craft beers and microbrews like Little Creatures) are growing at the expense of traditional mainstream heavy beers (VB etc).
· Midstrength beers are also in growth.
· Light beers have been in decline for some time. Shoppers are reducing volume but improving quality (i.e. buying a six pack of Stella rather than a case of VB).
Wine:
· Sparkling and rose wines are growing.
· Specific varieties within table whites and reds are in growth e.g. the rise of Pinot Grigio and Sauvignon Blanc at the expense of Chardonnay, growth of Shiraz, Merlot and blends at the expense of Cabernet.
· Fortifieds (port, sherry, muscats, tokays) have been in long slow decline. All about the $10-$15 price point.
Premix / RTD:
· High ABV (alcohol by volume) products are the growth segment in RTD.
Spirits:
· Vodka, gin, and high-end bourbons the are in growth.
· People are also starting to do more at-home cocktail parties. Here lies an opportunity to do more education at point of purchase with cocktail recipes and accessories.
How do shoppers behave in liquor stores?
Shoppers are only in the store on average for 3-5 minutes, and of that a sizeable chunk of time is standing in the queue. They are on a mission – ‘grab and go’.
Approximately two thirds of shoppers plan their category before they enter the store, and a further two thirds of those have planned down to brand (or a tight repertoire of brands, based on what’s on special, particularly for beer and scotch). So the most powerful place to influence them is directly in front of their destination category. Another place to influence is between the shelf and the cash register (for add on/incremental sales e.g. the chocolate macadamias!).
The role of in store media: influencing the liquor shopper
Liquor stores can be a cluttered and ramshackle sort of environment to shop, depending on the store format. ‘Category management’ as an approach varies in liquor stores for all sorts of reasons, including the fact that suppliers often provide their own RTD fridges and mix up all the categories within them. Because of this, one particularly powerful role for in store media is to help shoppers find what they are looking for quickly and influence them to buy your product over others in their mission category.
When planning your campaign, remember that branding alone is not enough for in store promotion, particularly in stores that already have lots of branded posters plastered about. Your communications need to have a clear call to action as well as a price point. While shoppers may not choose the particular store based on price, they certainly will choose their product on price. Most liquor shoppers go to a store with a category in mind, followed by a price point, and they want the best quality they can get within that price point.
In an ideal world in store media will be based on the shopper occasion. For example, roughly two thirds of bottleshop purchases are for stocking up, but the other one third are for events or occasions of some sort, ranging from low key ‘have a few friends over to watch the footy’ through to special events like 40th birthdays. Can you do an occasion based offer? Party pack? Gifting? Shoppers shopping for events are more likely to buy on impulse, and because they are shopping for others will often buy more ‘special’ brands than they would just for themselves. How can you get them to uptrade brands or packs? How can you get them to increase their average weight of purchase from 1 to 2 items?
This is the role of in store media in the liquor channel. You probably won’t change the category the shopper came in for. But you can influence them to switch brands, trade up based on occasion, buy more items and buy impulse products they had not planned for.
The key is understanding the sales drivers for your particular category and how they overlay with shopper behaviour in the liquor channel.
Happy promotional planning!
Most adult Australian shoppers visit a liquor store on a regular basis. And they don’t just buy liquor. Manufacturers of ‘impulse purchase’ items have been looking to liquor stores to drive additional value for quite some time - from chocolate-coated macadamias, salmon dips and olives through to chips, soft drinks and dinner party gifts.
So, what do you need to know about this channel to determine whether your brand and category can benefit?
Firstly, the Australian liquor channel is relatively sophisticated on a world scale – particularly when compared to liquor in the USA. In Australia, we have large chains and banners (unlike the USA) and a number of different store formats, each attracting different kind of shoppers and behaviours.
SNAPSHOT: ABOUT LIQUOR SHOPPERS
Who shops in liquor stores?
‘Stand alone’ bottleshops such as Bottlemarts, Liquorland and BWS tend to attract more male shoppers. Drivethru formats in particular skew male. On the other hand, liquor stores that are attached / directly next to supermarkets (such as Woolworths Liquor) are a more even mix, or even skew slightly female.
The core age group in the liquor channel is 25-49 years. There is a cross section of incomes, with no particular income skews (this tends to vary by category and price point, as well as by socioeconomic area).
How do shoppers choose the store?
Firstly, whichever store is closest to work or home or is ‘on the way’ to their dinner destination. Secondly, it must have the range (of recognised brands) the shopper needs– ‘I know that they’re likely to have what I’m looking for.’ A third reason is that staff know and acknowledge the shopper.
Store choice is generally not based on price except when driven by catalogue specials (particularly for scotch) or in lower socio economic areas.
What do shoppers buy?
Ready to drink premixes (RTDs), until the recent tax excise and subsequent price increase, had overtaken full-strength glass spirits and were approaching wine in terms of category size. However the recent price increases have seen RTD sales shift back into glass spirits. The biggest category is beer, followed by wine, then rtd, then glass spirits.
What is bought differs markedly by age bracket and gender – no surprises that male shopping baskets are beer dominant, for example. Female shopping baskets tend to be wine dominant, although a sizeable portion of female shopping baskets include beer because they are shopping for the household. RTDs are mainly purchased by 18-30s, while spirits skew older.
Category trends in the Australian Liquor Channel
There are four main category areas within the liquor channel. Within that, there is a great deal of variety. So what is growing and what is declining?
Beer:
· Imports (Corona, Stella) and domestic premiums (Boags, James Squire, craft beers and microbrews like Little Creatures) are growing at the expense of traditional mainstream heavy beers (VB etc).
· Midstrength beers are also in growth.
· Light beers have been in decline for some time. Shoppers are reducing volume but improving quality (i.e. buying a six pack of Stella rather than a case of VB).
Wine:
· Sparkling and rose wines are growing.
· Specific varieties within table whites and reds are in growth e.g. the rise of Pinot Grigio and Sauvignon Blanc at the expense of Chardonnay, growth of Shiraz, Merlot and blends at the expense of Cabernet.
· Fortifieds (port, sherry, muscats, tokays) have been in long slow decline. All about the $10-$15 price point.
Premix / RTD:
· High ABV (alcohol by volume) products are the growth segment in RTD.
Spirits:
· Vodka, gin, and high-end bourbons the are in growth.
· People are also starting to do more at-home cocktail parties. Here lies an opportunity to do more education at point of purchase with cocktail recipes and accessories.
How do shoppers behave in liquor stores?
Shoppers are only in the store on average for 3-5 minutes, and of that a sizeable chunk of time is standing in the queue. They are on a mission – ‘grab and go’.
Approximately two thirds of shoppers plan their category before they enter the store, and a further two thirds of those have planned down to brand (or a tight repertoire of brands, based on what’s on special, particularly for beer and scotch). So the most powerful place to influence them is directly in front of their destination category. Another place to influence is between the shelf and the cash register (for add on/incremental sales e.g. the chocolate macadamias!).
The role of in store media: influencing the liquor shopper
Liquor stores can be a cluttered and ramshackle sort of environment to shop, depending on the store format. ‘Category management’ as an approach varies in liquor stores for all sorts of reasons, including the fact that suppliers often provide their own RTD fridges and mix up all the categories within them. Because of this, one particularly powerful role for in store media is to help shoppers find what they are looking for quickly and influence them to buy your product over others in their mission category.
When planning your campaign, remember that branding alone is not enough for in store promotion, particularly in stores that already have lots of branded posters plastered about. Your communications need to have a clear call to action as well as a price point. While shoppers may not choose the particular store based on price, they certainly will choose their product on price. Most liquor shoppers go to a store with a category in mind, followed by a price point, and they want the best quality they can get within that price point.
In an ideal world in store media will be based on the shopper occasion. For example, roughly two thirds of bottleshop purchases are for stocking up, but the other one third are for events or occasions of some sort, ranging from low key ‘have a few friends over to watch the footy’ through to special events like 40th birthdays. Can you do an occasion based offer? Party pack? Gifting? Shoppers shopping for events are more likely to buy on impulse, and because they are shopping for others will often buy more ‘special’ brands than they would just for themselves. How can you get them to uptrade brands or packs? How can you get them to increase their average weight of purchase from 1 to 2 items?
This is the role of in store media in the liquor channel. You probably won’t change the category the shopper came in for. But you can influence them to switch brands, trade up based on occasion, buy more items and buy impulse products they had not planned for.
The key is understanding the sales drivers for your particular category and how they overlay with shopper behaviour in the liquor channel.
Happy promotional planning!
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