Can spirits shine in a dark market?

Bottles of whisky

With the tobacco display ban having the potential to set off a turf war for control of the till point, SLR’s King of the Till series gives suppliers from various categories the chance to state their case. This month, we look at how the role of spirits could develop in a dark market.

by Kevin Scott

When a store is being merchandised for either a new opening or a refit, there has never been a question about where tobacco would be located. Front and centre, behind the tillpoint, in the only part of the shop that every single paying customer visits. With the display ban, that could all change.

The introduction of the tobacco display ban will undoubtedly alter the way that shoppers interact with the tillpoint. And with many retailers believing that this prime retail space now essentially redundant as a tool to showcase available products, they are seriously beginning to consider whether tobacco is still the best category to stock in that valuable space. There isn’t a category out there that wouldn’t wish for such a highly visible space in which to showcase the offering, and indeed, some retailers are already beginning to explore different options.

That’s where our King of the Till project comes in. We aim to address the debate over what categories will come to control the tillpoint in this new age of convenience retail. Tobacco, of course, will continue to play an important part – it just won’t be visible to consumers.

Last month we illustrated the benefits of having a tobacco vending solution in place of a standard gantry with covers. This month we move onto a category that already shares that important space with tobacco.

Almost every convenience store will have tobacco front and centre behind the till, with spirits on either one or both sides. The advent of the tobacco display ban has put forward the case for turning this school of merchandising on its head. For example, spirits and tobacco could be arranged horizontally, with tobacco on the bottom – in easy reach for staff, and spirts spread across the top half, increasing the number of SKUs in a customer’s eye line.

Spirits company Maxxium has been examining how it can help retailers take advantage of the situation by protecting the space allocated to tobacco, while ensuring that the visible space is utilised by products that are allowed to be visible.

“The display ban represents an unprecedented change in convenience retail and retailers are still trying to understand how best to proceed,” says Chris Richardson, Customer Marketing Controller at Maxxium.

Richardson admits that it’s still early days for Maxxium too, with the firm hoping to commence a series of trials with local retailers to ascertain how to put in a place a solution that can increase spirits sales.

“Retailers may not always be aware of the contribution spirits make to their sales overall”, explains Chris. “It is important to understand what value this category is delivering for the store. We believe that by ensuring top sellers are in a highly visible position, retailers can increase rate of sale. These are high value lines and so driving sales of spirits can make a real difference to someone’s business, more so if the retailer can drive the overall spend on associated lines like ice and mixers.”

Increasing visibility could be horizontally blocking the area behind the till point, while moving tobacco either under or above the counter, or keeping it in drawers beneath the spirits fixture.

“With spirits blocked vertically on either side of tobacco there will always be a number of lines that are obscured,” says Chris. “By stocking spirits on the top half of the fixture, that is no longer an issue.”

If a retailer currently has a 1.2m five shelf display for spirits that’s six linear metres, and those six metres could potentially be put to better use. The horizontal blocking is only one idea that is being entertained – the trials will allow Maxxium to examine how best the space can be utilised, and we’ll be reporting back on the results of these trials to give retailers a firm idea of the steps they could take to grow sales in a post-ban market.

It goes further than just the space behind the till point. Richardson believes that every retailer should use the advent of the dark market to take a thorough look at their entire till point. “When was the last time you looked at the counter from the perspective of the customer?” he asks. “I mean really looked, see what your customers see, what stands out, what gets lost. High value, high margin products should be visible. Spirits currently under-index (value sales) in impulse versus total off-trade and this is an opportunity for retailers to take advantage of the increasing shoppers trends into convenience. This also gives the perfect opportunity to address the barriers to spirits purchase, such as visibility behind the counter, correct range and value perceptions.”

With all manner of NPD, limited edition products and other lines such as collectables the tillpoint can be a busy place. Retailers should ensure there is no dead stock there whatsoever. A good tillpoint should be clean and tidy and allow for unhindered browsing.

The same can be said for that highly visible space currently taken up by the tobacco gantry. It may turn out that the best solution is to continue with the current layout, but until other avenues have been explored, no one can really be certain, which is why retailers really ought to be considering their options.

King of the Hill

The case for spirits

Refitting the area behind the tillpoint to make spirits more visible has a number of benefits for retailers, such as:

  • Gives the opportunity to review your overall offering at the point of purchase for your shoppersnot just with Spirits
  • Gives the opportunity to review what sells in your store and establish which brands and bottle sizes you should be selling
  • By altering the lay out, the full spirits range can be merchandised to its full potential – creating an impactful display
  • Increasing visibility is a proven method to increase sales. By moving more spirits SKUs closer to eye level, retailers could enjoy considerable growth
  • Merchandising becomes more relevant thanks to this increase in visibility
  • Growing sales of high value, high cash margin lines benefits the bottom line
  • There is also an increased opportunity for trading up
  • Stock management is made easier as out of stocks can be identified and replenished quicker.