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How Alcohol Retailers Can Improve Trend Predictions with Point of Sale Data Analytics
The pandemic introduced new market dynamics in the alcohol industry. Stay ahead with on-premise point of sale data analytics.
Covid-19 upended our world as we knew it. Out of the blue, businesses had to change how they operate in response to the 'new normal.' Businesses dealing with controlled beverages, and specifically alcohol retailers, had to grapple with the reality that the pandemic could potentially bring normal operations to a halt.
As highlighted, the new normal brought with it a new host of regulations for bars and restaurants. For instance, alcohol service time was moved to midnight, which meant operational hours would be significantly reduced. What's more, as part of Washington State's comprehensive Covid-19 exposure control, mitigation, and recovery plan, indoor seating within these eating and drinking establishments was prohibited. Moreover, business owners looking to add outdoor seating within their premises were required to apply for a different type of liquor license from the Washington State Liquor and Cannabis Board (WSLCB) website. In the third phase of the regulatory framework released by the state, no bar area seating was permitted. This meant that the establishments had their patronage numbers significantly slashed. Concisely, these new restrictions put a new strain on bar and restaurant owners serving alcoholic beverages.
With these changes continuing to impact alcohol retail trends well into 2022, here are four ways retailers can use on-premise alcohol consumption point of sale data & analytics to grow their profit margins
Understand the Impact of Covid-19
The pandemic introduced new market dynamics. For starters, no longer could revelers grab their alcoholic beverage of choice at their favorite establishment. This was soon replaced by Zoom happy hours that would see at-home deliveries increase. Specifically, as on-premise establishments closed, alcohol sales shifted from the bar area to in-home. Brick-and-mortar alcohol sales were reduced in favor of online sales.
Notably, data from this period when most states instituted stay-at-home mandates saw an increase in the sales of boxed wines. Additionally, as most consumers moved to celebrate their occasions at home, sales of cocktails, or at least the liquor used to make them, increased exponentially. Besides, as people began yearning for new hobbies, there was great experimentation with cocktails, consequently increasing the sales of cocktail liquor and ingredients.
Overall, Covid brought strong volume growth across all alcohol categories sold off-premise, and on-premise growth followed once restaurants and bars opened back up. Retailers will continue to gain valuable insights on which alcohol categories are performing well from through point of sale data analytics. The result is understanding the full sales potential of your brands compared to the competitive landscape.. Additionally, retailers will gain insights into which specific geographies and sub-categories are rebounding the fastest following the pandemic.
Keep Tabs on the Competition
Even before the pandemic, margins from alcoholic beverages were slim. These have since become slimmer as the food and beverage industry has been rife with restrictions. This means that these institutions would serve a reduced number of patrons. A strategic way for alcohol retailers to leverage the full potential of on-premise point of sale data analytics is to fully understand and have visibility into what their competitors are doing. Understanding the advantages that your competition has allows retailers to optimize initiatives within your business for greater profitability and market penetration. You gain the power to see what your competition is doing so that you can stay toe-to-toe.
Gain Oversight of Alcohol Sales Trends by Geography
Through POS Insights, retailers and brands have visibility into on-premise alcohol consumption trends for beer, wine, and spirits —all of which are updated weekly. The data is collected and cleansed from over 35,000 bars and restaurants nationwide and is tied to each alcohol transaction. The raw data is then aggregated into a fully functional dashboard with drilling capabilities . You can use the resource to spot emerging regional and channel specific trends. You can then compare this data with historical data dating back to 2019 to decipher the trend.
Leveraging these insights allows you to make informed stocking decisions based on customer preference relative to your geographic area of operation.
Optimize Pricing and Promotion
Alcohol sales to both restaurants and bars are quite competitive. To stand out, you want to create promotional and pricing strategies that give you a significant advantage to your competition. Specifically, you need to create incentives to increase your sales volume.
When you invest in on-premise point of sale data analytics, you’re able to understand what competitive establishments are charging for alcoholic beverages. You will also be able to understand which products are selling and which ones are not. From this insight, it’s easy to develop a winning price.
Strategies you should consider as you seek to optimize pricing and promotions include advising the restaurant or bar owner on which prices would boost customer confidence. This is particularly helpful to many alcohol establishments since most consumers have a perceived value solely based on the price attached to the brand. You can, for instance, help with segmenting which products should be highly-priced to portray exclusivity and value. You can also determine which products should be a more affordable choice as these will often be mid-priced.
Optimize Alcohol Sales with On-premise Point of Sale Data Analytics
Alcohol has proven to be a cut-throat industry. Margins are continuously becoming razor-thin, and it’s only prudent that, as an alcohol retailer, you find new tools that help you gain a competitive advantage.
Having on-premise alcohol point of sale data analytics is the competitive advantage you’ve been seeking. This solution comes at a time when on-premise alcohol sales have never been more obscure —helping you make informed business decisions and ultimately beat the competition during a time of high disruption.
As highlighted, this data gives you insights into which alcoholic beverages sell best. Additionally, seeing as states and cities are recovering from the impact of Covid-19 at different rates, you’re able to get real-time data on performance. This should help you come up with promotions and optimize pricing that was not even considered by your competition.
At iControl, we have successfully created the only syndicated POS database of on-premise beverage alcohol. If you are interested in harnessing meaningful point of sale data analytics that support smart decisions, we invite you to request a demo today!