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Selling Less Volume for More?

Selling Less Volume for More?

We seem to be in the midst of a very unusual phenomenon – whilst volume in some categories of the drinks business is showing either very modest growth or in some even decline, we seem to be selling more higher-priced items. By Mal Higgs, Project Manager for the ALSA Retail Insights Project.

Retailers across the country are reporting increasing average item sales. This is a very positive development, as generally speaking there tends to be a better gross profit margin on these higher priced items. It certainly presents a significant opportunity to capitalise on this trend by ranging the right products according to your store’s individual demographics as well as offering service levels commensurate with the selling of these products.

No longer will just ‘serving’ the customer at the counter – that is just ‘taking their money’, be enough. This trend in ‘trading up’ by consumers brings with it a greater expectation to understand the product they are purchasing, or at least having the person selling them the product having that understanding. This becomes both a challenge and an opportunity.

Never before has it been so important to have staff – permanent and casual - trained in both product knowledge and selling skills. Product knowledge training is simple to arrange, almost every supplier has a resource dedicated to this. Most are currently focussing on the on-premise trade, especially in the small bar area of that sector, however, they are always more than accommodating when it comes to including off-premise retailers as well. This form of training can be a very enjoyable experience for your staff as they get to try and learn about different brands and styles of drinks. This is equally accessible across the craft beer, wine and spirits suppliers.

The question we often associated with this ‘trading up’ trend is ‘how long will it last’, or ‘surely this is a short term thing’? Consumer research is indicating that it is far from short term. Consumers in many categories are looking to ‘spoil’ themselves – ‘reward’ is the term often used. They perceive they are working harder, have more stress in their lives and are busier than ever – never having enough time for the things they enjoy – and so spending a little more on their favourite things is a means of dealing with those perceptions. Combined with a generally more affluent consumer, many product categories are experiencing the same trend as the drinks business. There are no signs that this trend is going to disappear anytime soon. As a result, we all have an exciting opportunity to capitalise on this and work hard to get our product range, staff training and overall retail offer right!

Combined with a generally more affluent consumer, many product categories are experiencing the same trend as the drinks business. There are no signs that this trend is going to disappear anytime soon. As a result, we all have an exciting opportunity to capitalise on this and work hard to get our product range, staff training and overall retail offer right!

The Australian Liquor Stores Association (ALSA) has been studying this and other trends in the marketplace constantly and works diligently to make sure there is information available to its membership base to assist. Initiatives such as the excellent online training resource ALSATrain www.alsatrain.com.au ahave proven to be a very valuable tool for drinks retailers as well as the partnership with IRi to produce the State of the Industry report (see the ALSA website www.alsa.com.au for access).

ALSA has also developed the Retail Insights program www.alsaretailinsights.com.au as a professional development initiative. This important, industry-leading program contains information on a broad range of topics helpful to the business owner, manager or industry participant in gaining a better knowledge and understanding of these topics.

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