How bottleshops can drive profits by picking up their game on incremental selling.
For Drinks Magazine, May 2009, by Norrelle Goldring of ShopAbility
As independent bottleshops wring their hands about trying to match the low price points of the big boys to bring in traffic, they are missing some easy additional sales from their existing customers.
This was demonstrated yet again to me recently when I visited one of my locals to replenish my gin, scotch and vodka stocks after a party. I placed my three spirits bottles on the counter, at which point the staff member simply picked them up and started scanning them. What’s missing from this scene?
Unsurprisingly, I was not asked whether I would like a Tonic Water to go with the gin, a Coke for the scotch or any number of flavoured drinks that could go with the vodka. In fact, I had to ask where they were (not obviously displayed), by which time the transaction was already going through EFTPOS and the staff member clearly considered it all too hard.
Yet, margins and profits on sundries in bottleshops are often better than mainstream case beer. You could be increasing your average transaction value by around $5. Go figure.
Most service stations you go to, even if staffed by a pimply fifteen-year-old, try to sell you mints at ’2 for the price of one’ or upsell your bag of chips from a small to a large for ‘just 30c more’. OK they sometimes get the execution wrong, since they tend to ask AFTER your EFTPOS transaction is going through, but at least they ask. I can’t remember the last time a bottle shop did it.
The size of this missed opportunity is underscored when you understand that around two thirds of bottle shop ‘baskets’ are single item baskets. That means two thirds of shoppers are leaving with the one thing (1 case of beer, 1 bottle of wine etc) they came in for, and nothing else.
Because nobody is offering them anything else!
So, how can bottle shops optimise the incremental sales opportunity?
Bundle and cross-promote in-store
1. How can the store be optimised for ‘this goes with that’ purchases? Does your softdrink fridge need to be located next to or in the spirits shelves? Or better yet, at the counter?
2. Is your counter area laid out to encourage impulse purchases? Are your chips, chocolate, nuts, dips, flowers and any other impulse items located clearly at or near the counter? Are they promoted effectively either via price or another compelling message (such as the occasion … ‘off to dinner? Try these …’) ? Could you range DVDs as impulse for ‘quiet nights in’?
3. How are you communicating ‘this goes with that’ instore? Do you need to call out your sundry offers more clearly through at-shelf signage and promotions in relevant beverage categories?
Get staff involved and measure them
OK there will always be staff turnover, but there are some simple processes you can put in place to optimise incremental sales regardless of the calibre and number of store staff:
1. Set a standardised script and set of offers for how staff are supposed to cross-promote and encourage additional item purchase. For starters, they should be asking ‘would you like an X with that’ for any categories that obviously go together, like Spirits and mixers, beer and chips, red wine and chocolate, white wine and cheese / dips / nuts etc. They can also ask ‘would you like a Coke with that’ for pretty much anything. Another way is to identify the shopper occasion and upsell based on that. ‘Doing something special tonight?’ may receive an ‘out to dinner at a friend’s’ response from the customer, at which point staff can point out the promotions on chocolates, flowers and pre-dinner snack s etc.
2. Measure items per transaction, and make number of units per transaction a key KPI for sales staff, management and whole of store(set an average target higher than 1, for example average 1.65 units per transaction, meaning the majority of shoppers buy two items)
3. If you’re really keen, measure staff and management performance against average unit sales by engaging mystery shoppers.
Time to pick up the game on incremental sales, bottle shop folk! The wins are too easy for excuse making. Next time I buy gin I expect to be actively sold a Tonic!
