What We Don’t Know Can Hurt Sales
August 30, 2011 09:50 AM
By Jon Cameron - Beverage Professional Expert
As a former DSD beverage buyer at a large retailer, I have had my share of myths about how to merchandise a cold box. I believed in bigger sets in higher-socioeconomic stores. I put the focus on keeping the cooler in stock during the summer holidays. A merchandised a wide-range of price points and didn’t shy away from Dom Pérignon in the cold box. I used to space-to-sales for merchandising within the cold box, and sales-to-space for deciding the size of the cooler configurations. I estimated my volume from the cooler to be around 60% of units when preparing plan-o-grams.
And I was wrong on all of these sensible rules.
In a study at a large retailer, we used Ular temperature-sensitive barcode labels on all their chilled wine. These labels passively alter their reporting UPC so we can distinguish sales from different point-of-purchases. After 60,000 rings, the data told us a different story than the one we have been passing down.
- The cooler commands purchase average prices of $1.00 more per unit than the shelf. From store to store, this price advantage is as high as $1.23 to as low as $0.16 cents.
- In the wine category, more cooler space does not translate to more cold sales. Our study revealed the smallest cooler set sold more units, had the highest percent of sales from the cooler, the highest average selling price, the highest 1.5L unit sales, and the highest dollars per square foot.
- The $6.00 - $8.00 price segment drives cooler volume with close to half of all sales coming from this price range.
- Cooler sales chilled over the summer holidays. The holiday had a higher % of sales from the warm shelf. This could be due to a number of factors such as: out-of-stocks in the cooler, an increase in the number of warm displays, or holiday pantry-stuffing.
- For top-selling wineries, the best selling location is outside the cooler. Despite the industry’s emphasis on out-of-stocks in the cooler, our data suggests that sellers take a closer look at warm shelf capacity. 70% of the stores had ‘shelf’ as the most important point-of-purchase.
- Heavy users of chilled wine were in lower socio-economic stores which also had smaller chilled sets.
- Even among stores with heavy wine consumers, taste preferences vary markedly from store to store. Depending on the store, chilled imports represent 18-36% of total unit sales and chilled sparkling wine sales can vary by more than 400%.
- On average, 44% of all units sell from the cooler. However, there is significant fluctuation store-to-store and week-to-week.
- Store volume does not translate to cooler volume. Some of the coolers’ items only sold from the warm display and produced no cooler volume across the test stores.
- During traditional stock-up days, shoppers had a higher tendency to reward themselves with a chilled bottle of wine. Sunday and Wednesday have the highest purchase rate of wine from the cooler – a space which typically represents immediate consumption opportunities.
Back