As cost of living pressures continue to burden many retail sectors, including retail, there is little relief for consumers who continue to tighten their belts and seek value at every opportunity.
For retailers including off-premise liquor retailers, this amplifies the need for each business decision to be focused on customer needs. This extends to the often-underestimated realm of packaging – while it might seem like a minor detail, the strategic use of pack sizes can be a powerful tool to navigate tough economic times.
Diversifying pack sizes allows you to cater to a wider range of budgets. By offering different pack sizes you can open the opportunity to gain a sale from the more cost-conscious shopper. The shopper can decide whether to manage their spending by purchasing smaller pack sizes or derive savings by purchasing larger pack sizes and enjoy a lower cost per unit.
In times of economic hardship, consumers are less likely to take risks on unfamiliar products so major brands can use differing pack sizes to drive sales. Beer is a notable example where major brands offer 30- can packs in addition to standard 24-pack bottles and cans. Larger pack sizes allow brand loyalists to invest in their favourite brands while pocketing savings. This is beneficial for both the customer and the business.
Visiting several off-premise stores revealed that although numerous brands had a 30-can pack beer offering, they were generally tucked away in the corner of the cool room with little visual cues for the beer shopper to direct them to the location or spruik the savings. While doing store visits, I purchased a leading brand’s 30-pack on the basis that compared to the 24-pack there was an 18.6 per cent savings per unit at a similar price point. Not a bad proposition for any shopper.
On this basis, it may be worth considering a featured display of larger pack sizes in a high traffic area to grab incremental sales. However, there’s a strategic balance to be struck. While upsizing can be beneficial, it’s crucial to avoid alienating your loyal customers who you might rely on for purchases of standard pack sizes to drive your cash flow in the long run. Here’s where frequency becomes key. You can cater to both the budgetconscious consumer and your existing customer base by providing more affordable options alongside your usual packs for selected periods and rotating brands.
In conclusion, the strategic use of pack sizes can be a powerful tool to navigate economic downturns. By offering a variety of sizes, catering to budget-conscious consumers, businesses can position themselves for success even in challenging times. Remember, during tough times, it’s not just about selling more, it’s about selling smarter.
This article was originally written by Stephen Wilson, Category & Insights Manager at Strikeforce, and published in the June/July edition of National Liquor News.