After attending a number of shopper marketing and path to purchase conferences both in Australia and Asia over the past 12 months, what’s become clear is that mobile technology and social media are more than partly behind the retail revolution. And shopper behaviour is changing fast.

I’ll expand on this in more detail in the upcoming Digital Marketing feature issue of National Liquor News, but in the meantime here’s a quick overview.

The basic purchase cycle of need-plan-decide-choose-buy-use-tell hasn’t changed all that much, but what has is which bit shoppers do where, and who influences them.

Traditionally the path to purchase was thought to be prestore and instore. Prestore was when shoppers were making lists and were the passive subjects of advertising and promotional stimulus. Prestore was about consideration. Instore was where the shopper was influenced on which of their considered products in a category they would buy. Instore was where the conversion happened.

Now the model is blurred. We have conversion happening prestore, and consideration happening instore.

The advent of mobile search and compare is creating consideration at shelf, not just conversion. An example is a shopper standing in a bottleshop looking at red wine. The shopper can whip out their mobile phone and price compare the bottle in the store they are in versus somewhere else. And if the somewhere else is nearby they may change their store choice. You’re then relying on your store staff service and sales capabilities to keep the shopper in your store. Or they might be looking at a bottle on shelf and if a staff member isn’t available, look up the product information online using their smartphone.

This isn’t just for the ‘few’ who have smartphones, by the way. Australia has the second highest smartphone penetration in the world, currently over 50%, set to hit 60% by the end of 2012 and 90% by 2015.

Procter & Gamble are largely credited with coining the expression the ‘First Moment of Truth’ (or ‘store back’) to describe the shopper experience at shelf, where theoretically all the prestore and instore marketing and category management efforts come together to create a purchase decision at the shelf (or offlocation display).

Now we have not only a First Moment of Truth, but a Zero Moment of Truth (prestore) and a Second Moment of Truth (post store, when the purchased product is actually trialled).

Google’s recent report (April 2011) on the Zero Moment of Truth (ZMOT), whilst not expressing a new idea, has probably been the first to articulate it clearly. It identifies the shift in shopper behaviour by differentiating advertising and promotional stimulus (considered passive) from online and mobile search (proactive).

The ZMOT is when a shopper actively searches for product information online. This may be from a retailer’s website, manufacturer’s website, product reviews, social media such as Facebook, and community forums and blogs (which are a form of organized word of mouth), among other things a search engine may dig up. ZMOT is everywhere because it can be accessed whilst mobile, and it’s not just for high involvement purchase categories like cars and entertainment systems. Shoppers are actively searching prestore in product categories ranging from plasticware to pet food.

The Second Moment of Truth (SMOT) – product trial, usage and experience – has an impact on ZMOT. Users of a product when they get it home may post a comment about the product (and their purchase experience) on a social media website, or a product review on a blog or website. These reviews then contribute to the next shopper’s ZMOT findings.  In a recent report from IBM it was stated that a shopper is more likely to believe a review from a stranger than what a retailer or manufacturer says about a product. This demonstrates the need/role for informal product advocates and ambassadors (rather than paid celebrity sponsors).

Whilst you can’t control what shoppers post for SMOT about their shopping experience, smart retailers can use ZMOT tools and social media to drive traffic, AWOP and spend through social media exclusive offers. Coopers Brewery have been running social media specific promotions for more than a year now.

It’s time for liquor retailers to catch up to and capitalize on what shoppers are now doing to make their store choice decision your store. And it’s not just about lowest price, it’s about a true one-to-one relationship based on your understanding of their purchase patterns and behaviours.

Having a partner who is hugely into imported craft beer has opened my eyes to the size of this opportunity for independent bottleshops in Australia. Let’s have a look at some key facts and why this is a good opportunity for some of you.

DEMAND FOR IMPORTED CRAFT BEER IS GROWING – BUT FOR WHOM?

It’s not just domestic microbrews that are growing. It’s a truism that trends in the onpremise tend to drive what happens in the offpremise. So really the imported beer trend has been on the horizon for a while. Not the ‘mainstream’ imports like Corona and Stella but Belgian, German and lately US, NZ and Danish beers driven by the growth and interest in Belgian Beer Cafes and Bavarian Beer cafes and more lately specialist beer offerings from venues like The Local Taphouse in both Melbourne and Sydney; the Pumphouse, Harts Pub and Murrays at Manly all in Sydney; and the Wheatsheaf Hotel in Adelaide to name a few. Let alone the various microbrewery pub/restaurant sites such as 4 Pines and the new-ish Australian Brewery, to name a few Sydney examples.

Increasingly more product from Europe, North America, NZ and Japan has been showing up in Australia via distributors over the past 18 months. Part of the reason for the demand is the strong Aussie dollar, which is buying self-described ‘Beer Geeks’ more bang for their buck.

Beer Geeks are a growing type of consumer who take their beers seriously as a hobby, not just something to quaff. If you were going to rank them on a 10-point scale where 1 is someone happy to live on, say, Tooheys New; 3s are Corona or Stella drinkers and a 10 is someone who only drinks hard-to-get craft imports; these guys probably start at 5.  A strong word-of-mouth community, they network and ‘talk’ via specialist beer social media sites such as Beer Advocate and check out beer ratings and releases on websites such as RateBeer, The Crafty Pint, Aussie Home Brewer, Australian Brews News and Microbrewing.com.au. Beer and Brewer magazine is a ‘mainstream’ read for these guys (and they are nearly all guys).

They are prepared to drive up to 2 hours to a store that ranges stuff they are interested in and they are willing to pay top dollar for it based on scarcity. Which brings me to stores that are currently in on the imported craft beer act.

WHO’S WHO IN THE OFFPREMISE IMPORT CRAFT ZOO

A select but increasing number of stores are offering or specialising in imported craft beer:

• Victoria and particularly Melbourne is the competitive ‘home’ of imported craft beer retailers. Two years ago Slow Beer and Purvis were the main two players but now they have at least a half a dozen competitors in Melbourne alone
• Perth, being the ‘home’ of domestic microbrewing, also has a strong (relatively speaking) imported craft beer offer with International Beer Shop, Cellarbrations Carlisle and Mane Liquor being the main contenders.
• In Adelaide there’s Adelaide Bier Shop
• In NSW the main players are probably Platinum Liquor, Porters Balgowlah, and more recently Beer Cartel as well as Warners on the Bay but imported craft beer is in its relative infancy here
• Queensland struggles due to its licensing laws … this is an opportunity for somebody!

There are probably a couple more but my point is that imported craft beer retailing is still fairly immature in the Australian market (unlike imported wine or spirits, which is pretty saturated). The fact that the chains (Dans and First Choice) are starting to range imported craft beers like Sierra Nevada is an indicator of the market … but the chains are restricted by volume requirements (not all breweries can make to the quantities the chains require) and/or who will supply them (a number of craft beer distributors won’t).

KEY BREWERIES AND STYLES TO LOOK FOR, AND HOW TO GET THEM

It makes sense that in a ‘land of lager’ (or lake of it) such as Australia that the Beer Geeks are looking for non-lagers. Specifically what’s been in demand the past 12 months are IPAs, Double IPAs, and Pale Ales with Belgian styles and Farmhouse/Saison to a lesser extent. At the Geekier end of the scale there is a shift to anything barrel aged, and barley wines.

Key brands that have been showing up in Australia the past 12 months include:

NZ:                   Epic, 8Wired, Renaissance, Moa

Denmark:          Mikkeller, Beer Heer, Norrebro Bryghus

USA:                Bear Republic, Moylans, Green Flash, Rogue, Brooklyns

Japan:              Hitachino, Baird

UK:                   Brew Dog.

Going via distributors is your best bet as it’s they who are bringing it in (rather than grey market). Use the distributors that won’t deal with the chains and/or range the in-demand or scarce low-volume products. This way you’ll get depth of range eg something like Brew Dog Punk Monk in a can (yes, Beer Geeks like beer in cans); seasonal beers; and better assurance that the stock is fresh.

WHY RANGE IMPORTED CRAFT BEERS

Some very clear simple reasons:

• You’ll make far better margins out of it than you will out of most wine (and it’s hard to differentiate yourself based on a wine offering anyway) … some US beers are coming in cheaper than domestic microbrews, and at higher ABVs
• It’s a growing market
• The consumers are loyal, not particularly price sensitive (although they know their stuff and what a fair price is, but there are ‘bragging rights’ attached to getting hold of scarce beers irrespective of cost) and their frequency of visit will create store traffic for you not only from themselves but from their mates via word of mouth.

The opportunity won’t last forever though, this will be the quick or the dead before the market is saturated.  What are you waiting for?

In a country where blokes parked on the couch watching sport – footy finals, boxing day test, test cricket et al – is virtually a national pastime, is surprises me that this behaviour doesn’t seem to extend to watching horse racing on TV outside of the Melbourne Cup.

Some occasions are off premise and retail driven, such as Christmas and Easter. Others are onpremise driven (such as football, which is a chance – or excuse – for guys to catch up in the pub over a beer or three).

Interestingly, horse racing as an occasion appears to be on-course (rather than onpremise or offpremise/retail) driven – and more about the women than the men, from what I can see (unless you’re a serious punter who rarely looks up from his form guide). I pity the guys, who have to get trussed up in suits (often against their will) and deal with a lot of primping and preening girls in hats, bubbly in hand, chattering about their dresses. It’s understandable that the guys’ form of escape is getting trashed as quickly as possible.

But there are only so many race courses, and so many people that fit in them or are interested in doing so. And aside from Melbourne Cup most people don’t go to the onpremise to watch horse races – horse racing doesn’t seem to the be the same level of ‘get together’ excuse (particularly for guys, unless they’re regular TAB punters) that the football is.

So how do you get people not actually on the race course involved, and join in the racing ‘carnival’? How do you leverage blokes’ natural sports couch potato behaviour?

THE ‘TAILGATE’ OPPORTUNITY

‘Tailgating’ is huge for football in the US, where traditionally the ute’s tailgate was dropped and a barbecue held out of the back of the car at or near the football stadium. Over time, tailgating has come to mean any bbq held at home (as well as near the stadium) used as an opportunity to watch the football game and celebrate or commiserate the result. And the tailgate bbqs are co-ed, not just for guys.

Obviously there’s an opportunity to replicate this for the various football codes here, but also for racing – not just Melbourne Cup day but Derby Day, Caulfield Cup Day, Cox Plate Day. The point is that it’s about all the races on the day, not just the major race which may only last 3 minutes.

Racing related bbqs provide opportunities for the girls to dress up a bit and catch up for a gossip (like they do at the pub) but the guys to stay casual, and for party bundle packs that include sparkling, a range of beers, some cocktail premixes and snacks.

However, creating a new occasion requires work and promotion across a number of touchpoints, not just in the store. In an ideal world one of the major liquor brands would actively promote these types of at home racing related occasions – both above the line and supported with instore activation – to underscore the synonymity of their brand with racing. This could work for either a sparkling wine brand, a domestic craft/premium beer or imported beer brand, or possibly a cocktail spirit base such as a vodka brand.

THE BLOKE OPPORTUNITY

Going to the races is synonymous with dressing up. Anecdotally though, whilst girls love the opportunity to get dressed up, most (straight) blokes do it under sufferance.

However the ‘dressing up’ can be translated to what they are drinking, a chance to ‘upgrade your beer’ in the way that McDonald’s promote the Angus burger as being ‘a little bit fancy’.

This is an opportunity for a premium or imported beer brand to promote themselves as the beer that blokes drink while watching the races, tied into the ‘watch the race at home (with your mates)’ occasion. The benefit for blokes is ‘the excitement of the races at home, without the hassle’.

Retailers have an opportunity to promote the ‘watch the race and be a little bit fancy at home’ occasion instore with displays and catalogue deals including import/craft beer pick’n’mix offers and 6 pack bundles.

Again this will take time as it’s an occasion that needs to be created, rather than leveraging an existing one. However it’s based on behaviour they’re already doing with other sports, so it’s not that much of a stretch.

THE CORPORATE OPPORTUNITY

Depending on store location, and Melbourne Cup being a weekday (where Derby Day, Cox Plate etc are weekends) there is an opportunity to put bundles together for office Melbourne Cup lunches. These could include everything from sparkling, beer and cocktail premixes through to glassware and a pickup/delivery service.

They are all opportunities that will take time to grow, but they are still valid opportunities.

Summer in this country is the busiest time of year for the onpremise. Not just pubs for Christmas drinks, but throughout the January school holidays as people catch up in restaurants and cafes for lunchtime or sunset meals in the sun.

But it’s also the biggest time of year for entertaining at home as people take advantage of the sunshine and use their patios, balconies and backyards to get together with family and friends.

Entertaining is one of the largest shopper trip types in offpremise (after ‘stock up’ for beer and ‘replace my regular’ for spirits).  So here we will have look at some of the multitude of types of entertaining occasions and how you can tap into them.

There are a number of variables within entertaining occasions that have a bearing on how much shoppers buy, of what (categories, brands, pack formats/sizes) and how much they spend:

• How many people are invited/attending
• Level of formality, which is impacted by relationships
• Relationship of the participants to the host (distance/closeness in intimacy terms, not geographical) – ie close family, distant family, close friends, acquaintances
• Whether the event is a meal based (eg bbq) or drinks based (with a few snacks)
• Energy level of event eg ‘go off’ vs relaxed
• Day or night time
• Theming (including themed drinks).

Some of the more obvious summer entertaining occasions include:

• Christmas Day lunch/dinner
• Pre-Christmas drinks
• Pre-Xmas get together
• Australia Day bbq
• Extended family get together (family that may only see around Xmas time)
• Blokes/mates on the couch watching the Boxing Day Test and other cricket
• ‘Orphans’ events over Xmas and January for those (temporarily) without family

General entertaining occasions that also happen to take place during the summer include:

• Event related party eg New Year’s Eve party, Halloween
• Other event related parties eg birthday milestones (30, 40, 50 years young)
• Casual meal eg bbq
• Family get together (regular event for close family eg some families have a regular Sunday meal together)
• Girlie brunch (likely to be weekend)
• Chicken and champagne breakfast (likely to be girls)
• Casual ‘pot luck’ lunch or dinner where everyone ‘brings a plate’
• Formal meal eg served ‘dinner party’ (although big in the 80s and 90s, these are going out of fashion and being replaced by more casual events and pot luck style meals).

Also, the shopper may be the guest (‘what do I bring?’) or the host (‘what do I give them?’). Both require solutions.

There are some interesting informal (unwritten and unspoken, but generally acknowledged) rules around the various types of occasions that inform what hosts serve and guests bring. Sydney Morning Herald columnist Richard Glover wrote a very funny article published in the Spectrum on Oct 1 dealing with barbecue etiquette

(Link: http://www.smh.com.au/opinion/society-and-culture/hits-and-near-misses-your-essential-summer-barbecue-survival-guide-20110929-1kxu3.html).

Two premises in this article relate to guests’ alcohol behaviour: “Don’t bring a bottle of cheap red wine when your intention is to drink the host’s beer”, and “Don’t try to hide the half-decent red you’ve brought for yourself”.

These talk to two different occasions from the guests’ point of view: a) gatherings with people you know, where it’s assumed everything gets shared because everyone knows what everybody else drinks (eg you bring the slab of VB in); and b) gatherings with people you don’t know (where you’re more likely to keep your better wine for yourself, or use it to impress, or bring your 6pack of special imported beer in and keep the rest of the case in the boot of the car).

Similar idea from the host’s point of view, with regard to who they’re hosting. If it’s an event with a lot of lesser-knowns then safe and likely well known brand choices at low-mid price points that are likely to appeal to the masses will apply (unless they’re trying to impress). If it’s an event with well known friends and family it’s a combination of forgiveness for pulling out what’s already in the fridge, and having some better stuff on hand because you’re happy to share it with them and you know their taste.

If it’s a smaller gathering the host is likely to spend more per head. For larger groups the host is likely to spend less per head and just stock the basics for the thronging hordes.

What all this means is that you have a number of opportunities to uptrade shoppers on their chosen categories based on the type of event they are attending or throwing (and who is attending), and to sell them more depending on the size of the gathering they are having.

Some of the key opportunities around occasions are thus to:

• Probe customers on their reasons for store visit, if for entertaining ask the how many, who are they, what do they like questions
• Provide cross category bundles of basics for different event types, including add-ons such as glassware
• Vary the bundles by level of formality eg casual bbq = VB and quaffing shiraz, upmarket bbq + Corona and a good NZ Sauvignon Blanc (or possibly Gin & Tonic/Martini)
• Create an event/party specific area of the store
• Communicate occasions eg ‘perfect gift for host’ (eg if someone taking a bottle of wine to a dinner party)
• Make your store an expert in social events and occasions. This is something the big boys can’t do (Dans and First Choice are more about pragmatic stocking up than expertise in events)
• Provide some drinks/food matching information and education eg best beers/wines for seafood bbqs vs steak bbqs.

These are all activities that will help you give your store a point of difference.

When your friendly neighbourhood Convenience World editor asked me to contribute some thoughts on the recent AACS submission to the Productivity Commission on alcohol, the key questions that came up for me were how big is the opportunity, and is it viable?

Leaving aside the anticipated moral outrage from the usual conservative pundits, and assuming convenience stores ably monitor and regulate 18+yo alcohol shoppers occurs as they do now for tobacco, would selling alcohol in convenience actually work here?

WHERE WILL THE SALES AND GROWTH COME FROM?

On the face of it you can see why it’s an opportunity, if you use the $8.1bn liquor retail sales figure from IBIS World’s Liquor Retailing in Australia report (2010).

However, Australian alcohol consumption, and thus volume, is pretty flat.  We’re actually drinking less litrage of alcohol per capita than we did 20 years ago. There are some changes in consumption at a category level too, as highlighted by Jessica Irvine in today’s Sydney Morning Herald (24 September 2011), in her opinion piece on the SABMiller purchase of Foster’s: “Australians consumed an average of 469 tinnies of beer each in 1979. Three decades on, this has slumped to the equivalent of 285 tinnies. We are quaffing an extra 10 bottles of wine a year and half a litre of spirits.”

This is because wine has become relatively cheaper with the wine glut and subsequent ranging of value cleanskins, and full strength bottle spirits sales increased when the RTD excise was introduced a couple of years ago resulting in a switch by RTD drinkers into bottle spirits (and to a lesser extent, beer). Beer volume is in decline, but value is increasing, as shoppers trade up in quality and down in volume. They are trading out of mainstream lagers and up to imports and microbrews/craft beers.

In the USA, it’s predominantly mainstream beers ranged in convenience. Mainstream heavy lagers here (VB, Tooheys etc) are in decline albeit currently nearly 2/3 of total domestic beer production volume (Datamonitor, 2010).

So given that the offpremise alcohol market is flat, if convenience stores were to successfully range and sell alcohol, where would the sales come from?

Existing offpremise liquor outlets, and likely the independents rather than the chains.

Channel shift, rather than incremental category growth.

CREATING DEMAND BY UNDERSTANDING CHANNEL ROLE

Ranging alcohol in convenience stores requires an understanding of alcohol based shopping trips.

Contrary to the IBIS World Liquor Retailing premise that much of offpremise liquor sales are on impulse (as quoted in the AACS submission), various liquor industry shopper studies we have conducted over the past 10 years consistently show that around 70% of offpremise alcohol shoppers know what category they are buying before they walk into the store. Not many people walk into a bottleshop without a clue of what category they are there to buy.

And for beer and RTD, within the 70% who have planned the category, 65% know the brand and/or individual product they will buy. Wine is less planned at a brand/product level due to the sheer breadth of range.

This is because bottleshop trips are destination alcohol shopping trips. The trip types themselves vary a bit by category, but generally fall into one of: stock up (beer, dark spirits); entertaining (formal and informal); take to an event (dinner/party); or ‘replace my regular’.

The question, then, is whether convenience can become known as a destination alcohol channel (given that range would be limited), and/or if convenience can pick up ‘impulse’ alcohol sales. Any impulse alcohol sales are potentially more likely in fuel than non-fuel sites, given that we know from various cross-channel shopper studies we have conducted over the past few years that impulse items need to be worth considerably less – ie under 50% – than the value of the planned basket of items. Ie, if a shopper is spending $50 on fuel the impulse items would probably need to be under $20, which rules out beer cases and most full strength bottle spirits.

Convenience could potentially act more like a drivethru or a pub attached bottleshop, with a limited convenience offer for ‘on the way’ trips. Or leverage the existing convenience store ‘party’ trip (particularly ‘local’ convenience stores) for ice, gas bottle top ups, softdrink mixers etc.

WHAT’S REQUIRED TO RANGE IT VS WHAT IT’S WORTH

To range alcohol in convenience, it’s going to come down to floorspace and coldspace (both fridges and coolrooms). Mainstream beer is mostly sold in cases, and predominantly cold. This would involve investment in coolroom unless you were going to break cases up and sell them as 6 packs (and a low percentage of mainstream beers like VB are sold in 6 packs as they are a stock up/replace my regular item). Shoppers are less likely to buy ambient cases off pallet floorstock.

Likewise, 80%+ of white wine and rtds are sold cold, requiring fridge space. You wouldn’t want it to cut into your existing cold NARTD beverages space, which is your merchandise bread and butter outside of tobacco, unless you’d done a space-to-sales analysis and figured out how many shelves/doors of overfaced beverage product you could actually give over to beer/wine/rtd.

So you’d need to invest in extra fridge doors and a coolroom. This will require capital expenditure for fitout , including any shelving near the counter for spirits. It is unlikely that independent outlets/individually owned stores will have the tens of $thousands required for fridge fitout unless it’s funded by the banner group. If you’re going to invest upwards of $20,000 in coldspace fitting an outlet (eg 3 fridge doors and a small coolroom), you’d need incremental sales revenue of $26,000 (ie $500/week or at least 2 cases of VB a day) at a 30% margin (and the actual margins are substantially lower than that) just to break even in Year 1 on your capex outlay.

Thus there’s capital investment required, and the available floorspace (particularly in smaller independent outlets) is limited which will restrict the range you can sell. So you would be limited to mainstream and ‘beacon’ brands. And the mainstream product margins aren’t all that high. So you’d be relying on your limited alcohol range to drive trips and purchase of additional items.

The available space would also dictate not only which categories are ranged (beer only, and/or wine, rtd and spirits) but also which types of convenience sites, as not all would have the space. The USA convenience channel skews to arterial and roadhouse site types, which have larger store footprints (within the context that most US retail store footprints are larger than Australian ones anyway).  Local convenience stores, mini marts and transit sites may well not have the space to range alcohol.

Cost considerations additional to coldspace/shelving fitout also come in the form of:

• Stock inventory costs
• Staff training for product knowledge, unless only the largest brands and most mainstream products are ranged
• Security, which may need to be ramped up, particularly for full strength bottle spirits
• Self funded promotions to create demand. Convenience stores are unlikely to get a sales rep in-person call from alcohol suppliers, because they’re  not big enough/wouldn’t drive enough volume to justify a call, let alone tailored promotional programs and consumer promotions to pull stock through (unless these were negotiated with alcohol suppliers at the banner group level). So stores would be left to their own devices to create demand.

THE US MARKET IS NOT AN ACCURATE BASE FOR COMPARISON

OK, I get that you have to start somewhere in sizing the opportunity, and that the US is an obvious market to look to as it has been ranging alcohol in convenience for a number of years.

But whilst alcohol, and primarily beer, is a convenience store staple in the US, the state based differences are huge due to the morass of state based liquor laws resulting from Prohibition. Some states aren’t allowed to range alcohol at all in convenience (eg Pennsylvania, New Jersey, Alaska). Convenience stores in some states are able to sell all alcohol categories (eg California, Nevada, Mew Mexico), while stores in many states can sell beer and/or wine but not spirits (eg Virginia, Washington, Oregon). Some states can sell beer only but not wine or spirits (eg New York, Mississippi).

In other words, it’s a mess. And in many of the states where beer and wine are ranged in convenience stores, it is INSTEAD OF, not as well as, ranging in offpremise bottleshops. So the numbers you would get by pulling % of offpremise alcohol sales in convenience stores would be extremely skewed.

In addition, where alcohol is ranged in convenience in the US it is likely to be limited in either pack size or more commonly by ABV (alcohol percentage). This explains why you see beer doors in US convenience ranging 6 packs, where in Australia the dominant mainstream beer format is the case (and for some products, the longneck 750ml for ‘roadies’, which are often sold in multibuy format eg 3/$10).

As mentioned, US convenience (with merchandise, rather than cash booth only) skews to arterial roads and roadhouse/travel plazas – stores with the floorspace and coldspace to carry the extra stock.

THE SUPERMARKET CHAINS WOULD GET IN ON THE ACTION ANYWAY

Even if convenience stores were granted offpremise licences in Australia (and getting the Community Impact Statements through in some states for liquor licence applications will be interesting, to say the least), it is hard to see how selling alcohol would be limited to the independents. The licence applications would be extended to the supermarket chains (who already have them, by the way, for their existing liquor operations across Dan Murphy, First Choice, BWS, Liquorland, Vintage Cellars and Woolworths Liquor). And you can bet that they’ll use them – Fly Buys, Everyday Rewards, fuel discount voucher programs et al would be incorporated.

The independents in offpremise liquor are under very similar stresses to those of independent convenience stores. The supermarket chains have around 60% of offpremise liquor, and the independent liquor stores can’t compete with the supermarket chains’ pricing due to the chains’ buying power. The independents are losing market share and traffic, and this is changing rapidly (the chains had less than 45% of offpremise liquor 5 years ago).

This begs the question, How would you price? Mainstream beer shoppers have 3-5 brands they rotate amongst depending what’s on special. RTD shoppers are also price sensitive, having less disposable income, which is why there was a shift to full strength bottle spirits (ie get drunker, quicker on freepour) and beer (cheaper per unit) when the RTD excise was introduced.

You can’t compete with the buying power of Coles and WW and thus their retail prices so in order to range alcohol profitably, you’d need to be priced higher. This then requires shoppers on either impulse (only around 30% at a category level for alcohol) or on convenience/emergency trips – a fewer % of trip types – when price sensitivity is less of an issue.

Chains would likely not only range alcohol in Coles Express and WW Caltex if the Productivity Commission approved it, they can do it cheaper AND tie it into their existing loyalty programs (Fly Buys, EDR) and fuel discount programs. So you still wind up with the same power imbalance problem.

Ranging alcohol in convenience isn’t going to make the power of the chains go away.

Counter to what you may think having trawled through the above, I’m not trying to scare convenience stores away from ranging alcohol.

Rather, the point was to make you aware that whilst the numbers may appear attractive on the face of it, much thought needs to be given to the execution as it may well transpire that the cost of ranging alcohol in stock, capex and fitout outweighs the returns, and the issue of chain dominance will remain the same.

In the last issue I was bemoaning the lack of persuasive selling in bottleshops and how nobody ever seems to bother to sell me anything additional to increase their average basket spend.

Consider that, in supermarkets at least, 85% of shoppers add to their shopping list. In bottleshops whilst 2/3 have planned their category and brand, at least 30% haven’t. This leaves room for influencing purchase (as well as getting an additional item in the basket).

So rather than just whine about what’s not happening, in the interests of being constructive I’ve outlined below some of the key persuasive selling techniques – upsell, cross sell, switch sell and incremental sell – and their application in the bottleshop context.

Forgive me if this all sounds a bit how-to-suck-eggs, but the reality is that it’s not happening in bottleshops – either because the store owners don’t get it, you think that staff turns over too fast to make the training investment, or the staff just don’t care (so why not incentivize them then to MAKE them care?!)

This game is about increasing average weight of purchase (AWOP) and spend (transaction value) irrespective of your store’s shopper frequency or traffic levels.  Let’s have a look at when and how you can get shoppers to spend or buy more.

TYPES OF PERSUASION SELL, AND OFFPREMISE EXAMPLES

• Upsell: is buying a larger, more premium or more expensive item than planned. Results in more $ for 1 item. Example is upselling a Corona 6 pack to a case/carton, or a Johnnie Walker Red Label to Black Label purchase
• Switch Sell: is getting the shopper to buy a different product, brand (or category) than they planned. You need to switch them to something that’s more profitable (don’t trade them down). Again, results in more $ for 1 item. Example here in NZ sauvignon blancs may be switching a shopper from say a Stoneleigh to an Oyster Bay
• Cross Sell: is suggesting related products or services to a customer who is considering buying something they already know of or like. This is the Amazon school of ‘If you like X, you might also like Y.’ Results in selling more items. Example may be brand based, eg Stoneleigh sauv blanc plus Stoneleigh Pinot Noir. Or it may be within a product range eg Mexican beers Corona plus Dos Equis, or flavoured Vodkas eg Absolut Citron plus Absolut Kurant
• Incremental Sell: is getting an additional sale to the one the shopper planned to make. It may be passive (eg by placing impulse beverage fridges near the checkout) or more active (the McDonalds school of ‘would you like a dessert with your meal?’ Results in selling more items. Examples here might include glass spirits plus mixer eg Jim Beam white label plus Schweppes tonic; or a ‘his n hers’ bundle eg Jack Daniels bourbon and Cola 6 pack for him plus a Cruiser 6 pack for her.

TRIP TYPES VARY HOW OPEN TO INFLUENCE SHOPPERS ARE

Ascertaining what trip type a shopper is on and the occasion they’re buying for provides clues as to how best to sell to them.  For example:

• Stock up trips: Tend to be (mainstream) beers, and quaffing wines in Big Box stores. The most planned trip type, at roughly 2/3 of trips (depending on channel segment). On this trip, shoppers buy within a fairly narrow repertoire. Opportunity here is upsell or switch sell
• Entertaining trips: The most browsing of the shopping trip types. Biggest number of items in basket. The most open to suggestion (switch sell, cross sell, upsell and incremental sell) and impulse
• Destination/Specific Item: Grab and go for ‘the usual’ I normally get (not an opportunity to switch sell, but may be an opportunity to cross sell). Opportunity for ‘while I’m here’ and incremental impulse.

MAKING PERSUASION SELLING WORK FOR YOU

Persuasion selling needs some basic support:

• Staff: Training – identifying who to approach about what, when. Incentives. Focus … don’t try to do everything at once, start with one persuasion sell type and get the staff used to that before moving onto the next type
• Stock: No OOS. Need enough stock to cover
• Visibility Support: Floor displays and counter impulse units; staff t-shirts (drivethrus); occasion based messaging.

WHY DO IT? BENEFITS

• Improved sales & margin mix: eg $3.00 GP on a 2L bottle of Coke vs <$1.00 on a case of VB on promo
• Improved GMROI: Better stock turn of non-core items and high margin products
• Improved ROCE: (Return on capital employed). Making the best use of your investment in staff labour.

It’s all pretty straightforward and can be achieved in a 30 minute staff training session for each of the various selling techniques.

What are you waiting for?!!

Last article we looked at two channel segments literally as different as night and day – pub attached and grocery attached bottleshops.  Here we’re going to do a similar exercise comparing drivethrus with big box discounters.

WHERE & WHAT YOU ARE

Drivethru bottleshops seem to be the one drivethru format the Americans haven’t thought of – probably for legal reasons given their labyrinthine liquor distribution laws – in a land of drivethru weddings and banks.

Drivethrus, as the name suggests, have more than ¾ of their shoppers arriving by car. Most have both a browse line (for those stopping and getting out of the car) and a fast service lane where staff come to you (if they’re not busy at the counter).

Store footprint is small to medium, with a medium range (larger than pub attached, smaller than grocery attached or detached bottleshops, with little floor stock (with the exception of SA which have larger store footprints, larger ranges and basically act like a large detached bottleshop you can park in).

Stock/sales floorspace is only around ½ of the total space (the rest is driveway). Classic drivethru banner examples include Thirsty Camel and some Bottlemarts.

Generally drivethrus are all about mainstream and domestic premium beer, and rtd … although some are increasingly stocking white wines in the fridge bank. Case beer is often only available by asking the staff as the coolroom may be staff access only.

Pricing is competitive, but likely to be higher than some other channel segments due to the convenience nature of the format (more on this in a minute).

Big box discounters, on the other hand, have a large store footprint, large range of everything (particularly wine, and increasingly, craft beer) including bulk packs, and a low-price mandate that often includes multibuy offers. Because there are fewer of them (although the number is growing), they are a destination often requiring a 10 min+ drive. So car parking is important, also given the case and bulk buy stock-up nature of purchases.

WHO SHOPS WITH YOU AND WHY?

Drivethrus are ‘on the way’, generally either on the way out to some sort of social gathering (eg to a party, BBQ, mate’s place etc) or on the way home.

Shoppers skew heavily male (where  more than 50% of grocery attached bottleshop shoppers, for instance, are female) and they’ll either be by themselves (often tradies getting a longneck roadie or 6 pack rtd on their way home in the afternoon) or in groups in the car if they’re going out.

Either way, it’s even more convenience based than most other offpremise channel segments – quick in & out.

Because of this, shoppers aren’t as price sensitive in drivethrus as in other channel segments. It’s more about best deal within their existing repertoire and desired format, particularly for beer, where ‘guys law’ dictates you take a case of beer to a party with people you know and only a 6 pack to a party with people you don’t know.

Where drivethru shoppers are buying their liquor to take TO somewhere for their own consumption, shoppers in big box discounters are taking it home often for consumption by others. Shoppers in big box discounters, spend more time – upwards of 10 minutes, vs 2.5 minutes in a detached bottleshop and under 2 minutes in a drivethru. And they spend more money overall, upwards of $50 on average (although their spend per unit may be less) because they’re stocking up for everyday consumption or for hosting a party, BBQ or other entertaining occasion. Total Wine and Bevmo in the USA are doing the party one-stop-shop well, with substantial cheese and cracker offers as well as glassware, gifting etc. Many big box shoppers are ‘pragmatic stockers’ – those looking for volume at a good price, particularly in wine where cleanskins may also be the order of the day. Often shopping using a trolley, they’ll buy mixed cases – they like to balance variety and experimentation with what they know. Big box shoppers are an even socioeconomic spread – as much affluent high income shoppers as lower income.

IMPLICATIONS AND OPPORTUNITIES

Drivethrus:

Given the limited amount of browse in drivethrus, the two major points of influence are displays and offersat/near the counter (if they’ve got out of the car to pay) and your staff. Use your staff to upsell, incremental sell, cross and switch sell, particularly for shoppers not getting out of their cars. Yes it’s mostly ‘him’ buying, but there’s probably a ‘her’ in the background somewhere, so think about his’n’hers deals (ie beer plus light rtd). Pick’n’mix party packs eg different beer 6 packs might also work. And remember car sight lines and shoppers staying in their cars – it’s harder for them to see displays  from  car level so any displays need to be at eye level form car height.

Big Box:

One stop party shop: entertaining accoutrements eg cheese, dips, crackers as well as ice, mixers, premix cocktails which could be bundled into an ‘instant party’ offer. Gifting accoutrements – cards, wrap, bottle bags. Variety packs, mixed cases and pick’n’ mix offers. And given the dwell times, get tradeup by through sampling and demonstrations.

Last article we looked at Detached Bottleshops – what they are, who goes there and why. Here we’ll do something similar for Pub Attached and Grocery Attached, which in some ways are as different as night and day – particularly time of visit.

WHERE & WHAT YOU ARE

If you’re a Pub Attached ,it’s pretty self explanatory … you’re part of the pub building (or right next to it/underneath it), often on street corners on both minor and major arterial roads depending on the pub location. You’ve got a small store footprint and thus a limited range, predominantly smaller pack sizes such as single bottles and six packs, with fewer cases. Examples include the BottleO and Bottlemart pub attached sites.

If you’re Grocery Attached, you are immediately adjacent a supermarket (eg WW Liquor, some Liquorlands, IGA + Liquor) or may even be ‘dewalled’ where shoppers can walk directly from the bottleshop into the supermarket or vice versa. Because of their supermarket locations many stores will be located in shopping centres (and thus limited by shopping centre trading hours). Medium store footprint, you have a medium range of everything with a focus on mainstream and value brands and therefore lower price points.

WHO SHOPS WITH YOU AND WHY?

Because pub attached bottleshops are open later than everybody else (their key point of difference) a substantial amount of their trade is between 7 and 11pm, often the punters leaving the pub who are picking up something on their way home or to ‘kick on’ at a mate’s place, or other punters picking up something to take to dinner. Because your range is limited they’re in and out pretty quick, although this may be counterbalanced by those shopping in pairs where mutual preferences come into play (and/or if their decision making is slowed by what they’ve had to drink in the pub already). And they are more driven by convenience than value, so you can charge a price premium vs other channel segments like grocery attached or even detached bottleshops.

Grocery attached stores are pretty much the opposite on a number of counts. The majority of the grocery attached bottleshop traffic – more than 80% – comes from people shopping in the supermarket. So not only is the bottleshop trip more likely to be at the end of or part of a ‘stock up’ shop, there is a higher proportion of women  – around 60%, as on average three quarters of supermarket shoppers in non-SINK/DINK (single/double income no kids) areas are women. And they’re buying for the household, not just themselves – stocking up on replacement items, the partner’s regular case of beer etc. Because supermarket shopping trip peak times are 2-7pm, this is when most of the grocery attached liquor trade is likely to occur. As well as Saturday mornings, particularly for entertaining occasions backed onto the traditional ‘Saturday morning shop’.

IMPLICATIONS AND OPPORTUNITIES

For pub attached stores the key opportunities are about maximising spend from your existing traffic (price premiums, AWOP via 2fors and pick ‘n’ mix mechanics) and driving traffic through shouting about, and thus becoming known for, being open late. (Conversely, you could do ‘early bird’ offers for other dayparts to drive traffic earlier in the day). Because you’re part of a pub you’ll have a bunch of ‘locals’ to whom you can market via direct mail, letterbox drops in the local area etc. Provide reasons for them to visit you. Promote the bottleshop in the pub with combined onpremise/offpremise offers.

For grocery attached stores, the biggest challenge is getting more traffic in from the supermarket. Although more than 80% of these stores’ traffic comes from the supermarket, only around 10-15% of supermarket shoppers actually go into the adjacent liquor store. So the opportunity is in driving traffic from the supermarket via mechanics like cross category promotion (within RSA guidelines of course) with suitable categories in the supermarket, eg Entertaining categories like dips, cheese and crackers.  Another opportunity is to promote via the supermarket catalogue (where possible) as supermarket shoppers are already in the planning/list making/catalogue mindset – AWOP driven bulk offers will talk to the ‘stock up’ mindset, as well as promoting Entertaining occasion services and products such as ice, glassware etc. If they’re already in the supermarket buying entertaining occasion products, how can you make your liquor store the ‘one-stop entertaining shop’? Also, tie-ins to the supermarket’s loyalty scheme, if they have one.

So it’s clear from above that opportunities and executions differ for pub attached vs grocery attached liquor stores.

We’ll look at drivethrus, big box discounters and specialists over subsequent articles and discuss some of the implications.

In a blurring offpremise channel environment, does channel segmentation still apply?  Channel segmentation is important only when the shopper behaviour differs meaningfully across channels, impacting how you should execute.

There are some meaningful differences in behaviour and expectations across offpremise channel segments, so here’s an overview.

Let’s assume an offpremise channel segmentation (store types) that looks like this:

• Detached bottleshop (strip sites – may be chains eg BWS, Liquorland or independent banner groups eg IBA)
• Pub attached (part of the hotel site, often LMG outlets)
• Grocery attached (immediately adjacent supermarkets eg WW Liquor, some Liquorlands)
• Drivethru (often independent banner groups)
• Specialist (eg wine or craft beer specialty stores, except from Vintage Cellars are more likely to be independents)
• Big Box (large footprint ‘barns’ eg Dan Murphy, First Choice).

Depending on the state, there might be some smaller segments like ‘convenience’ (adjacent IGAs for instance – these are really a form of Grocery Attached).

At an overall level, shoppers choose an offpremise liquor outlet based on the following reasons (in order):

1. Location/convenience (closest to home/work, on the way home/out)
2. Range (the brands and products that I buy)
3. Staff (know me, recognise me, know what I like and recommend me things)
4. Value for money (note this is not ‘cheapest price’ per se)
5. Services (eg parking, party hire)
6. Promotions and loyalty schemes.

The exception is Big Box liquor stores, which are based on range first and value/price second. Big Box liquor stores are a destination and therefore location/convenience is further down the list. Specialist outlets are also destinations and therefore location/convenience takes a seat further back and range becomes paramount.

The above being the case, over the next several articles we’ll look at some differences in shopper profile, behaviour and therefore likely retail execution and some implications and opportunities. Let’s start with detached bottleshops.

WHERE & WHAT YOU ARE

Detached bottleshops(DBS) are ‘stand alone’ and tend to be in suburban locations on strip sites –  minor arterial roads in specific suburbs, or sometimes on major arterial roads. They’ll generally be clustered near other local shops (which gives you cross promotional activities, particularly with restaurants, bakeries, delicatessens, takeaway restaurants etc).

Most  DBS have a medium sized store footprint. Indie examples include Bottlemart and  Cellarbrations. Many Liquorland and BWS stores are DBS.

Typically a DBS has roughly equal category focus with a skew to beer –  they move a lot of mainstream beer cases, although they are moving increasing amounts of premium and international beers.

WHO SHOPS WITH YOU AND WHY?

On minor roads in suburban locations your shoppers will be mostly local residents plus tradies. For major arterial road stores the % of tradies increases, as does the number of white collar workers on their way home.

So on average, your shopper split would be 65% male and 35% female.

The locals come to see you because they’ve run out of their ‘usual’, or because you’re a one stop party/entertaining shop and can provide a recommendation for a gift or special event because you ‘know’ them. They’re reasonably frequent return visits once or twice a week, where your face is familiar to them and theirs to you.

They’re also more  likely to know your range, and have an expectation you will recognise them and know what they like. Because they know your store they’re  in and out pretty quick – under 5 mins for wine and under 3 mins for beer.

IMPLICATIONS AND OPPORTUNITIES

The frequency of your DBS shopper base means that loyalty programs and rewards for frequency will work well, the trick is to provide offers in a bundled way to increase AWOP and spend rather than just discount their normal purchase.

Trust means they’ll try something new if you recommend it, or uptrade their purchase. Staff persuasion works well here, so ensure your staff are trained in upsell, incremental sell, cross sell and switch sell.

We’ll look at pub attached, grocery attached ,drivethrus, big box discounters and specialists over subsequent articles and discuss some of the implications. The point is to understand what store type and location (and therefore shopper base) you have and what this means for your shopper’s expectations around range, promotions, price and service. Even if you’re a banner with multiple formats, opportunities can be explored on an individual store basis depending on its channel segment.

A couple of years on from the RTD excise, the bottom hasn’t fallen out of the category but there have been some shifts.

First up, let’s be clear that the category isn’t going away. It has shown consistent long term growth. It’s been around since inception in the mid 1960s with UDL.  Constant innovation from the mid 1980s saw volume rise tenfold over a 15 year period, from 1 million 9L cases in 1985 to 10m 9L cases in 1999. The GST, together with a shift into convenient multipack formats, saw a fourfold volume increase from 11m 9L cases in 2000 to nearly 45m 9L cases in 2007, before the tax excise.

WHAT’S HAPPENED SINCE THE EXCISE?

Since 2008 the RTD category has dropped 23% in value. However, the majority of this drop was from 2008 to 2009 (-26%). From 2009 to 2010 the RTD category has actually grown in value by nearly 4%, driven by dark spirit RTD.

Dark Spirit RTD is now 77% of what it was in 2008, and Light Spirits RTD is 74% of where it was in 2008.  So the category is back in growth, courtesy of Dark RTD, after less than two years of decline.

SOURCES OF VOLUME

There is irrefutable evidence that the RTD tax excise thumb-in-the-dyke resulted to the leak springing out in the form of full strength bottled spirit (FSBS) increases.

There is a strong relationship between bottled spirits and RTD. But this is largely limited to, and driven by, the direct relationship between Dark RTD and Dark FSBS.

Dark RTD recent growth has come from  ABV adjustments, new pack format launches, and increased promotional activity.

It’s clear that when Dark RTD decrease, Dark Spirits increase and the reverse. However, the relationship between Light Spirits and Light RTD, whilst there, is less strong. Light Spirits have been in growth for the past several years, driven by Vodka.

Further, there has been a drop in the growth of Light Spirits from 2009 to 2010. So some Light Spirit and Light RTD drinkers, or occasions, would appear to be going elsewhere into other beverage types, potentially cider, liqueurs, easy drinking white wine styles and even into Dark RTD (as 42% of Dark RTD drinkers are female).

The Spirits/RTD relationship makes sense when you consider that RTD is not actually a beverage category, per se, it’s actually a spirits format. In the same way chocolates come in bag, block, bar and box; spirits come in full strength glass or premix cans & bottles.  They can be served in similar ways (see Figure 3).

Figure 3: Spirits formats and serving styles

Dark FSBS and Dark RTD are really both about Basic Mixed drinks (ie 1 x spirit base with 1 x mixer). Dark FSBS have a portion consumed straight up (which doesn’t apply to RTD) and in the onpremise, a portion used in cocktails (but this is far less likely in offpremise, at home consumption).  So there is a direct correlation between Dark FSBS and Dark RTD serving types, which partly explains the volume shifts from one to the other when under price pressure.

With Light FSBS, offpremise consumption is less likely to be straight up (martinis perhaps being a minority exception), a significant portion is in basic mixed drinks such as Gin & Tonic, Vodka Orange or Vodka Lime Soda, and a significant portion is in cocktails.

Our view is that the flavoured Light RTDs such as Cruiser or WKD are neither a common basic mixed drink, nor are they truly a cocktail as they’re really only one spirit base plus one flavour (rather than a mix of spirit bases and flavours). Whilst some Light RTD volume has gone to Vodka FSBS, we suspect that Vodka volume is in basic mixed drinks and also in cocktails. Ie, there is not a direct format comparison like there is for Dark FSBS/Dark RTD … the line is blurred. This, combined with the flavour innovation and experimentation based nature of the Light RTD, means they are more likely to be compared against other alcoholic beverage categories for the same occasion.  Which is both a source of innovation and a source of competition.

WHO IS DRINKING RTDS NOW?  WHAT ELSE ARE THEY DRINKING?

As at late 2009, past 4 week (P4W) RTD consumption stood at 46% (down from 51% in 2008) for 18-54yos.  However, Dark RTD P4W consumption was up 1% to 55%, where Light RTD was down 9% to 57% (from 66%).

Dark RTD drinkers (58% of whom are male) are most common amongst the 35-44 age group, followed by 25-34yos and then 45-54s, with the 18-24s the lowest proportion of Dark RTD drinkers. We suspect there has been some shift from Dark RTD into Cider and Imported Beers for the 18-24yos based on price (of a 4 pack or 6pack).

72% of current Light RTD drinkers are female. Unlike the ‘teen alcopop’ image propagated by the Government, the current consumption of Light RTD is virtually identical between 18-24, 25-34 and 35-44yo female age groups with each contributing nearly 20% of drinkers, with a slight decline in the 45-54 age group (14%). The same trend is seen amongst Cider drinkers, who are 57% female.

Cider P4W consumption at 10% and has doubled since 2006. One third of Cider drinkers are 18-34yo females. These are the Cider drinkers who overindex on white wine consumption, spirits (particularly white spirits and liqueurs) and to a lesser extent on Light RTD.  So we can see that there is repertoire crossover between Light RTD, Cider, White Spirits/Liqueurs and White Wine for 18-34yo women.

Whilst women overall have broader beverage repertoires and are open to experimentation (viz the interest in and high growth of easy drinking white Italian grape varieties/styles like Pint Grigio and Moscato) we are seeing higher levels of overall experimentation and repertoire breadth, particularly among 18-24s who are also trying Liqueurs and Ciders. The Federal Government was naive to target ‘alcopops’ as the single scourge of ‘teen drinking’ when the reality is that experimentation across beverage categories is rife until consumers are in their early 30s.

WHAT’S THE ROLE OF RTD NOW?

Actually, this hasn’t changed a lot, but it’s where the opportunity is. Light RTDs in particular have blurred the line between formats in order to target a breadth of  occasions, beginning with ‘wine coolers’ in the 1980s, lighter style beer blends (Miller Chill, Carlton Dry Lemon Fusion) in the past few years and now cocktail blend RTDs such as Smirnoff Mule.

Traditionally RTDs have fallen into either low key social occasions such as BBQs and Parties, Special Occasions (exacerbated by the tax exercise and associated price increases), and high energy Big Nights Out. Light RTDs are also associated with summer, where Dark RTDs are consumed year round.

RTDs are currently more likely to be consumed in social settings than alone. There is an opportunity to tap into lower energy ‘by myself’ occasions, such as ‘after work’ and ‘relax in front of evening TV’ for women who would typically drink white wine in these occasions.

RTDs are purchased over spirits or other categories because their format means portion control, consistency and in the case of onpremise, difficulty in drink spiking or spillage. These are still the key reasons they are purchased, aside from taste and overall ‘convenience’.

The role of Dark RTD continues to be as a convenient and consistent way to consume dark spirits.
The role of Light RTD is one of female repertoire enhancement by providing different flavours and varieties.

GROWTH OPPORTUNITIES TO LEVERAGE

1. GET THE BASICS RIGHT
* Range the top performers: and support them. Enough said.
* Allocate enough category and cold space: 90% of RTDS are bought cold. So the vast majority of your RTD space should be cold (including cases in the coolroom).
* Get your space to sales right: Yes the role of Light RTD may be variety and flavour, but considering they’re currently worth only 25% of the volume (for 50% of the skus), where Dark is in growth, you are better off opening up facings on Dark RTD to lessen out of stocks.
* Fire the long tail: getting the space to sales right and reducing the overfacing of Light RTD may mean doing a range rationalisation exercise and deleting your lowest performing skus. Or at the very least, allow a couple of facings for rotating flavours and seasonal skus, rather than assuming all Light RTD flavours need to be ranged permanently.
* Promote the new news: with increased facings, fridge frames and other promotional and visibility mechanisms for new products.

2. PROMOTE GROWTH
* Leverage occasions: right occasion, right product. What can you do around Summer BBQs, Winter Warmers, or the ‘big night in’ occasions? What can you do to leverage sharing?
* Cross promote: cross category and within RTD category. Different categories, different roles, different occasions. Communicate the different occasionality and drinker types, eg with ‘his and hers’.
* Impulse: leverage broad repertoires. Promote singles and small multipacks with counter coolers in detached bottleshops, drivethrus, big box/barns. Coolroom stocks in supermarket attached as well as other offpremise channel segments
* Innovation: Continuing to blur the lines between what is a beer, what is a spirit, what is a wine and what is a cocktail.

So, RTD hasn’t gone away and it’s not likely to any time soon because it has a clear – but differing – role in male and female drinking repertoires. You can make the most of its ongoing role by understanding consumption and purchase dynamics, and using that insight to play to some of the opportunities listed above.