Three things liquor brands MUST know about their shoppers

Shoppers are the lifeblood of every liquor business. From the smallest single store operator to the biggest national chain, if you don’t put them at the heart of your decision-making, chances are they won’t have you in mind when they go to buy liquor.

Overall, liquor stores are doing a good job of responding to shoppers’ needs and wants. Last year, 66% of shoppers were satisfied with the overall experience they had in the channel. That’s a higher percentage than the year before and considerably higher than it was three years ago.

Still, with competition increasing and per capita, liquor consumption falling in recent years, how do you capitalise on this positive sentiment and stave off these challenges?

The key is understanding what your shoppers think, want and do so you can make measured decisions that increase traffic and spend without damaging the bottom line. So, here are three ways to do that based on what shoppers have told us in the last twelve months.

1. Know your shopper profile

Just as no two liquor stores are identical, no two shoppers are either. However, when you survey 24,000 shoppers every year, you start to see trends appearing that can help steer a whole variety of choices, from price and promotions to range and layout.

Take age groups as an example. Millennials (those aged 18-34) make up an increasing proportion of liquor shoppers. Last year this group accounted for nearly 1 in 3 liquor shoppers and their basket spend and trip frequency were significantly higher than the average for the channel. But is this valuable shopper distributed evenly across all the retail banners in Australia?

The answer is no.

Some banners, such as Bottlemart, over-index considerably within this age group. Half of their shoppers are under 34. At the other end of the spectrum, around 1 in 5 Liquorland customers reports being in this younger demographic.

Why does this matter? Well, aside from the extra visits they make and the extra money they spend compared to the average liquor shopper, millennials attach greater importance to a wide array of topics, including how enjoyable their shopping experience is, what healthy and responsible drinking options are available to them, and the choice of premium products a retailer offers.

Responding to these needs is critical in order to attract and retain them in the coming years. Moreover, you only really know what you need to do when you get under the skin of that unique blend of shoppers at a banner-by-banner level. That is when the exciting stuff really starts to happen!

2. Know the DNA of your category!

Liquor stores are made up of products and those products are grouped together in categories. Simple, right? Well, much like humans, who each have a unique genetic code, every category in the store has its own identity. That identity defines how shoppers approach the category, the role it plays and the impact it has for the retailer. Just like a problem with a human gene, when something goes wrong with a liquor category, it doesn’t play quite the role it should, and its performance can drop. Clearly this is not where you want your categories to be.

What does this look like in practice? Let’s consider the two ways to drive growth.
You can either attract more shoppers (increase traffic) or you can get existing shoppers to buy more or pay more (increase spend). This dictates what levers you need to pull in order to maximise the opportunity each category offers. Of course, nothing is black and white. No category is 100% traffic driver or 100% spend driver, but they are a blend of both. It is this blend, together with how they compare to each other, that counts.

Top liquor categories

45% of shoppers treat the average category in liquor as a traffic driver. This means they view it as the main reason they went shopping, that they don’t want to run out of that category, or that promotions encourage them to shop it.

The highest over-index to average comes from Cask Wine, with slightly more than half of shoppers saying it is a traffic driver. Conversely, only about 1 in 4 shoppers (the lowest proportion of all categories) say Cask Wine is a spend driver. In other words, shoppers are relatively less likely to buy Cask Wine on impulse, to try something new or different in the category, or to pay a little more for a better-quality product. As a result, it’s most important in a category like this to make sure you:

  • Engage with shoppers before they enter the store (as opposed to at shelf)
  • Maintain excellent shelf basics, including strong availability and range simplicity
  • Promote pre-store and lead on excellent value

Craft Beer, on the other hand, behaves quite differently. It under-indexes significantly as a traffic driver but ranks fourth as a spend driver compared to all 32 liquor categories. This means you should focus on:

  • Encouraging purchase in-store through eye-catching displays and theatre
  • Offering well-selected premium products that spur shoppers to trade-up
  • Inspiring and exciting customers with innovation and information about the category

A third example is Shiraz. This varietal scores highly as both a traffic and spend driver.

Confused?

It all comes down to how different groups of shoppers interact with the category. In this case, people under 34 who buy Shiraz view cheaper bottles (less than $15) very differently to their older relatives and are much more promotionally driven. At the same time, they’re also more likely than the over 34s to trade up to a more expensive bottle or buy Shiraz on impulse. This is an example of a very dynamic category and one that offers great opportunities to tailor and differentiate your offer, depending on who you want to target.

3. Know what occasions you need to be driving

Millennial shoppers aren’t just different because of how they shop, but also because of why they shop liquor.

On average, 39% of liquor shoppers have a specific occasion in mind when they go to the store. The number drops to less than a quarter of over 55s, but balloons to nearly two-thirds of those under 34. This is a really important difference for liquor businesses to grasp and respond to.

Millennials are far more likely to buy liquor with a social event, meal occasion, party or gift in mind. Messages that speak to those occasions, both pre-store and in-store, are especially important to capture the attention of this shopper.

At the same time, nearly three-quarters of younger shoppers will consume the liquor they buy within a few hours of purchase. Among over 55s, the number is just one in four.

Convenience and portability become much more important in a world of immediate, occasion-based consumption. Store layout and range must be front of mind. Within this, the use and location of chiller space also come in to play and will vary depending on your shopper profile and category DNA.

Top occasions bought for (after stock up and relaxing at home):

  1. Socialising at home
  2. Drink with a meal
  3. Socialising out of home
  4. Party/celebration
  5. Watching sport

Overall, the bar continues to rise in the liquor channel and shoppers’ expectations are rising too. There’s still plenty of room for growth, but it will only come for retailers and suppliers who have a deep understanding of who’s shopping, why they’re buying and what’s most important to them.

Once you have that, you can truly start to influence and lead the liquor market of tomorrow.

For any questions about your categories, get in touch with our experts today!

Insights article by David Shukri, Senior Insight Director at Shopper Intelligence, February 2020

This article was originally published in National Liquor News and posted here with permission. View the full February 2020 edition here.