With research showing that consumers buy what theysee, merch
Merchandising is about using space, position and displays to drive sales because, once in the bar, the biggest factor affecting drink choice is visibility. So says Allan Tudor, on-trade sales director of Interbrew UK. Interbrew UK research shows how important merchandising is:
Up to half of purchases aredecided at the point of purchase (PoP)
45% of consumers are influenced by display
35% look for what is stocked at every purchase. Getting in first This research also shows that the first drink consumers choose is key because they tend to stick with it during the session so it has a vital role to play in terms of the profitability of your business. In fact, only one brand/type of drink is consumed on 88% of on-trade occasions and the first type/brand that people drink makes up 94% of total on-trade volume. The average consumption on the "first choice" product is considerably higher than later drinks, 3.4 pints, on average, compared with 1.9 pints of later drinks. So there is an opportunity for retailers to influence the first drink choice with merchandising skills. Putting your most profitable products in the best position on the bar will significantly increase sales of these brands. Also note, you can use "dummy" (non-pouring) heads to increase visibility without the need to have more pouring heads. Live in-outlet tests show that moving one or two countermounts to the best position increases sales by 7% while moving brands to the bar's "hot spots" can boost sales by 24%. Locating the hot spot' A "hot spot" is the key selling area and most valuable selling position on your bar. Given its importance, it is vital to locate and use your sales "hot spot" wisely. Remember:
Consumers take the shortest route to the bar
The centre of the bar has 24% greater visibility for brands
Consumers look left to right, therefore, centre left is also highly visible
The fonts directly in front of them as they enter are the most visible
A second countermount of the same brand increases visibility. The back bar This is some of the most influential space in the bar. Live tests have shown that back-bar merchandising can lead to sales uplifts of up to 125% of the featured brand. When looking at chiller merchandising, there are a number of points to consider. Eye-level chillers on the back bar are the best in terms of driving sales. Place the biggest cash drivers (volume and margin) in the best position the top right hand corner of the chiller because this is where consumers look first. Multiple facings, blocked horizontally, significantly increase visibility and your sales. The only exceptions to this rule are certain "default" brands (such as Smirnoff Ice), which sell equally well from anywhere in the chiller. There are huge rewards for increasing the facings of the brands that generate the most of your cash. Live tests prove the sales impact generated by multiple chiller facings. The average bar has around 50 spirit brands of which around three-quarters generate less than £10 profit per week. As spirits are more of a pre-determined purchase, retailers should use this space on the back bar to display more profitable products such as bottles from the chiller or even reposition the chillers there. Focus on profitability Premium draught lager is the most profitable product on the front bar but is generally underfaced compared with the cash it generates. How does this compare with the situation in your outlet? Industry forecasts are thatpremium lager will take a further 5%-6% market share from ale by 2004. "We are in the era of lager," adds Tudor, "so it makes commercial sense for retailers to ensure they focus on this aspect of business." Merchandising key points Here is a checklist of the main issues for success:
Know your profit margins (in cash terms not percentages) and make profitable brands visible
Ensure they are in the most prominent positions and have more heads than the less profitable brands
Use back bar display to drive the profitable packaged brands.
