By Ian Neubauer
Diageo Australia has published the results of a study that shows the ready-to-drink (RTD) category generates more profit per square metre of space than any other category in retail liquor sales yet does not receive space relative to its contribution.
Conclusions were based on the results of 22 in-depth interviews and 1068 surveys that explored the psychology behind in-store behaviour once initial purchasing decisions are made. The findings suggest opportunities exist to encourage additional purchases once consumers select what they came in to purchase, with spirits and RTDs accounting for the largest impulse categories.
“Diageo Australia’s recent in-depth shopper and category research has concluded off-premise [retailers] can tap into a genuine opportunity to increase sales simply by contributing more space and the right space to RTD,” said Diageo Australia customer marketing director, Jeff Williams. “The research revealed 75 per cent of RTD purchases are cold and 56 per cent are consumed on the same day. Based on these findings, Diageo recommends retailers convert both cold and ambient space to RTD to realise the full sales potential of the category.”
Diageo Australia has utilised these findings to develop space-prioritisation strategies the company believes retailers can use to maximise RTD sales. These include reallocating more RTDs to cold rooms, clearer signage, ranging top brands for clearer navigation, category framing for easier shopping experiences, and encouraging impulse purchases with interesting floor displays.
Diageo Australia said preliminary testing of these strategies on a selection of retail customers has shown positive results.
“Since we have converted the pallets of beer to RTDs our sales of RTDs have gone up 20 per cent,” said Cape York Hotel proprietor, Ben Scowcroft. “We make more profit on a six-pack of Bundaberg Rum than we do on a case of beer.”