Liquor challenges of '22 need answers in '23

How quickly things can change...

Remember the days when the off-premise liquor channel was soaring high and raking in billions of dollars in growth?

Today, the world looks like a very different place.

The pressure is on the industry to adapt, to evolve, and to answer the golden question...what do shoppers want?

At Shopper Intelligence, we've been surveying liquor shoppers for well over a decade. In 2022, our annual state of the nation highlighted ten crucial trends that everyone in the off-premise channel ought to be aware of.

Here's a recap on three of the biggest that might still have you scratching your head today...

Overall satisfaction plateaus

The headline story in 2022 was that, at a total level, shoppers are less satisfied with the off-premise channel now than they were two years ago.

Within this, big box banners saw their satisfaction levels drop year-on-year. Conversely, smaller format stores improved and it was independents who enjoyed the biggest gains.

Dan Murphy's shoppers remain the most satisfied with an overall satisfaction score of 72%, albeit that marks a 2% drop on the previous year.

At the other end of the spectrum, Thirsty Camel shoppers are the least satisfied (60% overall satisfaction), but interestingly, registered the biggest increase in satisfaction year-on-year.

From a beverage point of view, shoppers in spirits categories are now the most content. Despite solid improvements, it's the RTD shoppers who still bring up the rear, with an overall satisfaction score of only 64%.

These findings point to just how important differentiation is in the channel today. Shoppers see less distinction between banners and categories. They have unmet needs and they're looking at retailers and brands for solutions.

What's more, there are some significant shopper groups whose satisfaction levels fall well below average.

Among them are female shoppers and younger age groups, both of whom say they're less satisfied with their experience in the off-premise.

When it comes to 18-24-year-olds, our data shows store and shelf layouts often fail to meet their needs. With over half of under 30's buying liquor for a specific occasion and over 80% consuming the same day, the implications are clear. One size does not fit all. Traditional merchandising approaches aren't optimized for a new cohort of drinkers.

No/lo has potential but work to do

Another much-discussed group of shoppers that falls below average on satisfaction is the non-alcoholic buyers.

This is a fast-evolving group being targeted hard in both liquor and grocery stores.

Make no mistake however, their shopping motivations and behaviours are very different so they demand a distinct strategy.

As an example, their number one importance factor is not price, as it is for traditional alcohol shoppers. In fact, it’s the ability to identify value at shelf.

The differences don't end there. Innovation, information, promotions and pre-store comms are all much more critical if you want to engage the no-alc shopper.

So the question isn’t whether a differentiated strategy is needed. The answer to that is very clearly yes. The real question is how seriously you want take the no-alc opportunity. The answer to that will determine how much time you invest in understanding this shopper.

Missions matter!

Of the many fascinating trends we've seen from shoppers in the last year, the last one to touch on here relates to mission-based shopping.

For several years, I've talked to the industry about the differing approaches of younger vs. older shoppers. More than half of those under 34, for example, buy liquor with a specific occasion in mind, and eight out of ten intend to consume what they buy the same day.

These behaviours are vastly different compared to older shoppers.

If you're over 55, there's a one in two chance you buy liquor to stock up, and only a one in three likelihood you'll consume it the same day you bought it.

So, the store ought to reflect these differences, right? Where products are located, how they're laid out, the theatre that accompanies them and the information given to shoppers - all these aspects ought to reflect the intended audience.

Yet how often is that the reality? How often do we take a generic approach and then settle for price activity when things don't seem to be working?

If we want to do a better job for shoppers, encourage them to choose one retailer over another, and put an extra item in their basket, we must be more targeted.

Don't be satisfied with cut-and-paste strategies or black-and-white approaches.

That’s a route to mediocrity, not growth maximisation.

Get under the skin of the specifics - the dynamics, the behaviours and the motivators that drive shoppers in your category.

That's the way to stand out from the crowd, to influence trading partners and to lead the way to growth in 2023.

If you're ready to maximise your success this year and put shoppers at the heart of your strategy, connect with Shopper Intelligence ANZ today.

(This article was originally published in the drinks guide 2023 by our friends The Drinks Association )