Pricing isn’t the most intuitive part of running an independent liquor retail business. Margins are the center of the conversation: How do you price your stock for consumers while also bringing in revenue? It’s imperative to have the right pricing model, one that aligns competitively with the local market, to grow your business.
To win your local market, it’s important to know your sweet spot: The key balance to growing your business is stocking items that you know are selling to maximize turnover. Having too much of a high-priced spirit that shoppers in your area aren’t buying won’t get you anywhere. These four tips can help you find and harness your sweet spot to grow your independent liquor store:
- Know the Prices. You know your own costs and selling prices, but what about product price and movement in your local market? See the cost of products at other stores and get insights into how valuable the buyers of different products are. If you see in your data that a product is driving a incremental sales, price it low to recruit new customers, who could eventually become regulars.
- Test and Learn.Tests and iteration are vital to understanding your optimal pricing strategies. Use insights to see how changes in an item’s price affect sales, then adjust the price and try again. You may see margins narrowing, or find that a product is fairly inelastic. With this insight, you can raise margins on items that are not price-sensitive for buyers and make more money.
- Price Locally. Understanding national price trends doesn’t do much good in smaller markets. As an independent liquor retailer, it is more valuable to follow the trends in your city or region. After all, you’re vying for the loyalty of the same consumers. Technology like the DataBar from 3×3 Insights provides this level of rich data about your local competitors, allowing you to test your prices against nearby trends to find a sweet spot that benefits your business.
- Carry for your customers. In the same vein as following pricing trends for your local market, you should also be paying attention to what people are buying in your area. A stock of merlot won’t do much for your sales if your customers prefer pinot noir in the winter. DataBar provides you with a view of brand performance within your local market: see what your shoppers are buying – day-to-day, month-to-month, season-to-season – then order and price your inventory to bring those customers back.
Understanding trends is an invaluable part of growing your business. You want to supply for your local demand, both in what you carry, when you carry it, and how it is priced.
And knowing is half the battle: With DataBar from 3×3 Insights, you can go beyond POS reports and broad trending data to narrow in on your market, your customers. Get in touch with 3×3 Insights to see the level of actionable insight about your customers, inventory and local market trends you could be using to grow your independent liquor retail business.