HOW TO SELL MORE SPIRITS

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It comes as no surprise that most ideas in spirits merchandising are not very new at all; the basics of retail display in general, and beverage alcohol in particular, rest on fundamental principles of selling that are as sound today as they were 30 years ago.

According to the country’s elite beverage alcohol retailers, what has worked before will work time and again. All the operator must do is choose an approach and make it a priority.

Here are some of their suggestions:

Be Creative

Making products catch customers’ eyes is what merchandising is all about. Customer double-takes lead to sales, so make displays and store decor in general worth a second look.

By itself, creativity “doesn’t sell the product,” said Jan Jackson of Jax Package Store in Atlanta, GA, “but it does help draw attention to it. For anything new that comes into the store, I have to have something to draw consumers’ attention, some kind of p-o-s material, a drink recipe, a cooking recipe. You have to tell them what they can do with it. If you just throw it out there, a 50- or 100-case stack, it’s great, and people may buy it. But if a consumer sees something different, he might say, ‘That looks pretty good. I’ve never had that before. I’ll give it a try.'”

“You have to make the shopping experience fun, and the displays are a big part of that,” said Mike Parks, general manager for Frugal MacDoogal’s in Nashville, TN. “It has to be interesting and enticing in order to pique the interest of the consumer, who is much more sophisticated than he was 10 or 15 years ago.”

Frugal MacDoogal’s, which is known for its wildly original and entertaining displays, packs between 30 and 40 of them into its 15,000 sq. ft. sales floor. The most memorable, according to Parks, was a 500-case Jack Daniel’s stacking last year. It was a large display built into a corner, with a logoed electric train running through it. “We sold out the whole display a couple of times.”

With some product lines, Lock Reddic, president of Green’s Beverage Stores in Atlanta, GA, constructs unique displays. For Jim Beam, he recently built a replica of a home bar, complete with detailed photos of the Beam distillery taken during a visit there. The goal of the display was to convey “a personal message. We said, ‘Look, we went up there, we tasted it, we picked our barrels, we bought a ton of it, we had it privately labeled, and we want you to buy it because we believe in the product.’ And it was a phenomenal success, because today’s consumer is looking for something other than the old, normal, traditional whiskey. They want to be wowed.”

The Brown Derby chain of 20 stores, headquartered in Springfield, MO, uses “a lot of props,” according to Richard Miller, operations manager. They include things like empty whiskey barrels and antique furniture, which adorn displays of upscale products.

The idea of props, Miller noted, is “not necessarily that you sell the product. You’re selling the store, the ambiance, the fun. It demonstrates to your customer that you care, that you want to make your store interesting, and more importantly, in the kind of stores we’re operating and creating now, it speaks volumes to women.” At the chain’s St. Louis and Springfield stores, he added, about 45% of customers are women.

Display En Masse

Building mass displays can convey a powerful message to consumers. Gerry Clifford, the owner of House of Bacchus, a single store in Rochester, NY, is one of those who opts for mass displays, which he said fit his older audience nicely. Even high-end spirits do well in mass stackings, he reported.

Sometimes large stackings make sense for reasons other than consumer appeal. Ralph Bondon, vice president of 14-store Berbiglia Liquors in Kansas City, MO, said he has gone more to “big stacks” to make up for a perceived decrease in the amount of holiday point-of-sale materials suppliers are making available.

“Over the last three or four years, our focus has changed,” said Andy Abernathy, senior vice president and general manager of operations for ABC Fine Wine & Spirits in Orlando, FL. “We used to have spirits as the most predominant items in the front locations in the stores. Trying to improve gross profits, we’ve moved spirits to the perimeter and higher gross profit items, such as wine, gourmet food and glassware, up to the front areas.”

Even on the perimeter, however, mass displays work best for spirits given the local Florida market. “We try and show as many bottles as we can versus cardboard boxes, so we may tray-cut two or three levels deep so that there is a banner affect of the labels,” Abernathy noted.

Cork ‘N Bottle will build anything from a 3- to a 50-case display depending on the volume and what warrants it, said Brian Hue, the Covington, KY-based chain’s vice president and general manager. He added that displays must at all times “look clean, dusted and orderly. Don’t put something up and stick it on the end of an aisle just because you have no place to put it.”

Not everyone, however, is convinced that larger displays make sense. John Rydman, president of Spec’s Liquor Stores in Houston, TX, a 13-store chain, said he is not a believer in mass stackings. “They make great photographs for magazines, and they help you win praise from suppliers, but they don’t sell product.” When customers come in, he added, “they already have in mind what they are going to buy. I don’t believe [the displays] work.”

Meat And Potatoes Merchandising

Some operators take sticking to basics more literally than others. Jack Battipaglia, the owner of Grand Liquorama in Long Island City, NY, insists on simplicity and ground floor basics when it comes to merchandising spirits. “You put them on the floor. You stack them. It’s a very simple thing, I think.”

What’s spurring customers to select a particular product is primarily the ads they’ve seen before they come into the store, he said. “When a person sees an ad in the paper, they don’t jump off their seat and go buy the product. The ad puts the product in their minds, their memory cells. So if he’s using X-brand, and he sees Y-brand being advertised, when that customer comes into the store and sees Y-brand on the floor, he might say, ‘Oh, there’s that brand I saw; let me try it.'”

Make Signage Work

The debate continues: handwritten vs. printed signs. But no matter which one an operator chooses, signs must tell customers more than just the price.

“Excellent signage works as a silent salesman,” noted Gary Gardener, operations manager for the 23-store Belmont Beverages in Ft. Wayne, IN. “If you can take a little additional time with your signage, I think you’ll find the dividends to be there.”

“We find that doing our own signs works well, and many of them are done by hand,” said Cork ‘N Bottle’s Hue. “It’s a little more eye-catching, a little more believable, than all the standard stuff that’s put out by all the different suppliers. If somebody’s taken the time to write something, it’s got a more personal touch. It says, ‘We tasted this product.'”

Grand’s Battipaglia professed a liking for “schlocky” signs. “They give the impression that [there’s] a sale. We never put a price on the floor without a suggested price. If we have an item on the floor that normally sells for $17.99, and we have it for $15.99; we don’t just put it out for $15.99. What we do is say, ‘Regular price, $17.99, our price, $15.99.'”

Keep On Cross-Merchandising

Showing customers two products when they only intended to look at one will always be an effective merchandising technique.

Jax Package Store does a lot of cross-merchandising, pairing a stack of rum, for example, with Coca-Cola, pina colada mixes, or even fresh coconuts, and vodka with martinis and vermouth. T.G.I. Friday’s mixes are merchandised along with a television monitor showing a video on how to mix the product to make frozen drinks like the Mud Slide. Said Jackson, “If I put olives in front of a martini display — anchovy olives, garlic olives, almond-stuffed olives — people will pick them up.”

Spec’s moved its entire cordials department into the middle of the wine section last year in an attempt to expose more customers to them — especially adventurous customers. The result, said Rydman, has been strong. “We have a hard time keeping it stocked.”

Interestingly, it took some time for suppliers to get used to the new arrangement. “They couldn’t understand moving cordials away from Scotch and bourbon.”

Offer Gifts

Dressing displayed products up by making them part of gift baskets is another reliable way to increase perceived value and generate additional sales.

“What brings attention to the spirits, especially in our shops, is when we make gift baskets with spirits in them,” said Berbiglia’s Bondon. “We have gift packs of the merchandise right next to the regular bottles. That draws some extra sales.”

“It doesn’t work in every store,” noted Belmont’s Gardener, “but for stores that can afford the space, we really try to merchandise not one but every gift set that we carry to make a universal gift center.” The gift centers include cross-merchandised products, such as liqueur-filled chocolates.

Listen To Supplier Advice

Advice from industry experts can be a tremendous plus. But just as with any product or service, retailers should remain discerning consumers.

Suppliers often have “a lot of good ideas,” said retailer Jackson, “especially with things like recipes and p-o-s ideas.”

In 30 of his chain’s 169 stores, executives dedicate up-front space monthly to different suppliers, said ABC’s Abernathy. “We agree in advance what the product is going to be; sometimes it’s wine and sometimes it’s spirits. They come in and build the displays on those end caps to be creative. It might be a Captain Morgan display with a ship and fish nets. It might be a Kahlúa display with a co-pack. So we do dedicate a couple of front spots for their creative merchandising.”

“I have a couple of salesmen I’ll allow to do displays because they do them right,” said Cork ‘N Bottle’s Hue. “They do it to our specifications. They make sure the signage is up, the cases are cut correctly, the products are dusted and aligned correctly.”

Belmont’s Gardener said he has instructed his store managers to pick only the best of suppliers’ p-o-s materials “because it’s very easy to give your store a cluttered look with absolutely no effort whatsoever. With all the hanging items from the ceiling and the case cards it can look like a virtual jungle and create a shoplifting dream for anyone so inclined.”

Grand’s Battipaglia added, “I like to have suppliers put cases on the floor with a regular sign. Of course, they come in with umbrellas and balloons, which is fine. It’s an attraction to a specific brand. I’m in favor of that. But the key is the floor. I learned that 50 years ago.”

And you can take that to the bank.


Howard Riell is a veteran business reporter who is a contributing editor for Beverge & Food Dynamics and Cheers magazines.


On Display

Retailers have long noted the effect of supplier display materials in their own stores. “Whatever is on display will sell,” declared Suzie Riga, purchasing director for Green’s, a chain of liquor stores with locations in South Carolina and Georgia.

And the Point-of-Purchase Advertising Institute (POPAI), a trade association for the companies that design and produce point-of-purchase (p-o-p) materials, has done formal studies that pinpoint exactly how — and how well — these materials work in retail settings. A recent study of the customers of mass-merchandising stores, such as Kmart and Wal-Mart, found that 74% of all purchase decisions are made in the store. The study further found that when products were supported by p-o-p displays, they experienced triple-digit sales increases.

The beverage alcohol industry seems to be taking full use of p-o-p materials. According to POPAI, the off-premise market for beverage alcohol is one of the top 10 users of these materials, with restaurants and taverns being number one. In addition, in 1996, the beverage alcohol industry spent $629 million on off-premise p-o-p materials, up from $600 million in 1995.

Many beverage alcohol retailers have found that women, who represent a good percentage of their customers, react differently than men to store design and product displays. “They are more concerned with the looks, the aesthetics of the store,” said Bob Rooth, owner of Super Cellars, a three-store chain in New Jersey. “First, they want the store to be clean and accessible, and they want to see what’s new and exciting.”

Another of POPAI’s recent studies of consumer buying habits found that women spend more time shopping than men and are more likely to browse. Men tend to visit only those aisles in which
they have planned to purchase something. Furthermore, women make more of their decisions in the store than men, 71% versus 66%.

As retailer Rooth pointed out, beverage alcohol stores may have even more reason to use supplier p-o-p materials than other types of stores. “In New Jersey, to this day, we are not allowed to do tastings,” he said. “These materials are one of the ways we can introduce our customers to products.”


Supplier Side

Spirits suppliers have many good things to say to beverage alcohol retailers when it comes to merchandising, yet they always try to remember that the operators are and always will be the bosses of their own stores.

In fashioning their recommendations, suppliers stress the retailer’s needs — attention to trends, healthy profit margins, and bountiful but neat-looking displays.

Barry Younkie, marketing manager for Maker’s Mark Distillery, points to a trio of merchandising fundamentals he said can and will improve retailers’ bottom lines. The most basic is shelf alignments. “In a declining business, retailers should focus on the higher-margin products they have and put them at eye level to facilitate the whole purchase process. Being in the super-premium bourbon category, we work heavily with retailers on that.”

Younkie said he is a fan of special sections within stores, too, where retailers can showcase an entire category. “We like to see superpremium bourbons, which is one of the hottest categories in stores right now, in a special area. Not necessarily under lock and key, but merchandised — putting them together in that special section, with all the brand or product information the distillers are producing there with them.”

According to Alan Cohen, vice president, brand management for Jim Beam Brands Co., mass displays are ideal for moving even high-end product off retail sales floors. The company designs its off-premise materials (case cards, shelf talkers) to highlight mass displays. For Jim Beam Bourbon, said Cohen, “we create mass displays and case bins that will secure prominent floor space.” Consistent with that philosophy, Beam this year created a mass display for its DeKuyper line of cordials.

Cohen also said he believes placing information at customers’ fingertips is an important key to effective merchandising spirits. Operators who provide materials, such as shelf talkers that educate the consumer and display third-party endorsements, such as positive newspaper or magazine reviews will raise sales.

Cheryl Palmer, vice president of marketing for Domecq Importers, a wholly-owned subsidiary of Allied Domecq, says the key to merchandising is “making an impact. It’s about doing strong, impactful, high-quality pieces.”

One of the things Domecq is “beginning to look at” is how to cluster brands from a merchandising standpoint to create bigger offers. For example, we have a number of qualities within our Sauza brand. Rather than merchandise them in small side stacks, we’re looking to make a bigger merchandising impact using multiple products and qualities in the display.”

Mike Keyes, vice president and brand director for Jack Daniel’s at Brown-Forman Beverages Worldwide, encouraged retailers to first and foremost merchandise using the hot categories and brands.

“If I were a retailer, I’d look at the premium category leaders,” said Keyes. “By the nature of their being premium, margins are good, so those are the products I’d give floor space to.”

Jack Daniel’s is being tied in with Jack Daniel’s Country Cocktails for the first time. The “Grill Out” program, for instance, will feature both products. “In states where it is legal, they will go together to make a mass display. Where it isn’t, they can work as stand-alone programs. So we’re encouraging larger displays.”

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