Crafting Success: Winning with Reorganization

Grocery Stores Know What They Doing:

The science of grocery stores has always amazed me. It’s like I know my local store is hustling me but I willingly embrace my role as their loyal sheep. The layout of the store is designed to increase sales and efficiency and guide customers through the store in a strategic way. How many times have you walked into the grocery store with the intent of getting one thing but you can’t walk straight to it….you end up zigzagging through produce and cutting pass 4 aisles to get to your designated item. I am one of those people who end up with 5 additional items on the way to my actual need and of course the infamous candy at checkout always gets me. And you know what the spicy part about the grocery store layout is: The stores change this layout all the time to keep you moving and exploring in the store. Here is an explanation from the Grocery Guy from the site thegrocerystoreguy.com :

Rearranging things forces you to wander around, reading signs and scanning shelves for what you need. This increases the chances that you’ll end up filling your cart with eye-catching products that were never on your shopping list. Grocery stores have low profit margins in general, so staying in business involves subtly convincing patrons to buy more than they intended to. The frequent reorganization also helps ensure that the right inventory is getting spotlighted. Maybe a certain batch of cookies is all set to expire soon and store managers want to sell them before they have to be tossed—or they put all their best selling cookies at the very front of the store, because they know they’re hard to resist. Perhaps one kind of cookie has an especially high profit margin, so they decide to feature that one. Switching up the layout is just one of many ways that grocery stores are secretly manipulating you. It’s not by accident, for example, that the dairy is often so far from the entrance: It guarantees that anyone quickly running in for a staple like milk, eggs, or butter will first pass by a bunch of other enticing foods. Placing the produce in the front and spraying it down with water are also calculated tactics. There’s even some clever psychology behind ending prices in .99.

The Science of Beer Resets.

So speaking of rearranging items…this plan of action is not foreign to the beer aisle. One of the things I disliked doing the most as a distributor was beer resets. So a reset of a store is when competing distributors come together to reconfigure the shared shelf space in an off premise account. Remember an Off Premise account is an account where the product is consumed “off the premises”, so anything from grocery to convenience stores, independent liquor stores, etc. My part to play in the reset as a sales manager for one of the competing distributors was to remove all the product from the shelf and follow my planogram to reconfigure the products back in their newly assigned spaces.

I thoroughly dreaded doing resets because of the labor part but I enjoyed the analytical part because it is one of the most important jobs that you will do at a distributor. Yes, the rearranging of products does that same magic of helping to highlight feature items with higher profit margins but it's mostly important because shelf space in off premise means everything! So let me give an idea of how these work, specifically for chain grocery.

Planograms are usually submitted from the distributor set captains (normally the distributors for the large format brands) to the chain’s designated contact. In these submissions they make their case for where their products should go and how much space should be designated for their brands. This is often based on sales data that justifies for example the Shiner in this pic having full facings for its 6 packs over the Beck’s n/a.

Billboard 6-pack bottle facings except the Beck's N/A

Minor details like a full 6 pack or 3-facing vs putting it in sideways to a 2-facing can determine appropriate visibility or lack thereof. Which shelf the product is placed on is important as well. You want the best selling items visible at eye-level because visibility leads to accessibility and curiosity, and that ultimately leads to sales. It’s reach, clicks and conversions for my advertising and content folks.

So in this case beer is often placed in the set very differently from wine. Wine is most often organized by category, country of origin and style, whereas beer, particularly in grocery stores, is organized by price and brand. So a grocery store set most often is a Profit Set ( I don’t know if people still use that term) but what it means is that the beer is organized with the flow of the store so that the more expensive beers (often the imports) are positioned in the first position and the budget beers (Busch, Old English, etc) are positioned towards the end. Craft Beer in the early 2000s and now all the alternative drinks continue to shake this concept up.

Today, as you walk down the beer aisle you will have a designated section for craft that has expanded over time. It’s actually kind of thrown off the original profit set concept because it is often between the premium brands (Budweiser/Miller) and the budget brands, even though they can often be priced higher. The Local section within that craft beer segment also has become a powerful position in a beer set, in some smaller stores taking over much of that craft section. At my local grocery this is basically the set up with a large craft section in the middle, led and showcased by the local craft beers. There is also a cooler for non/alc beverages, beer alternatives and flavored malt beverages.

The expansion and placement of the local section in craft beer is brilliant because it focuses my mind, every time to search for new locally based brands to try or to make note of so I can shop the singles section for them (every grocery should have a singles section). The concept of supporting local brands has become popular for a multitude of great reasons and honestly has become the backbone of the Craft Beer Movement

So in a nutshell the reset initially would be designed then justified by sales data and based on the stores own analytics, adjusted to maximize profitability, brand growth and increase curiosity.

Craft Beer Brands Can Win With Resets

So what if you’re a Craft Supplier? How can you use this knowledge to your benefit? Of course the most important and simplest answer is to SELL MORE BEER, nothing justifies more space than the positive numbers you present your distributors during ABP. But let me give you a more strategic answer:

Stay in line with your distributor/ in store contacts and get an idea of your grocery chain reset schedule, particularly for your top chain grocery accounts. When you know the reset is coming you can prepare a strategy to increase or maintain your brand(s) visibility and relevance in store, regardless of the reset's outcome. For example if you are losing space in the most recent reset, consider this in your meeting with your Beer Dept Manager: “I looked at the reset and recognize our IPA and Pilsner are losing space….our brand is still a leader in the craft IPA category, let’s utilize some incremental display space in line with the flow of store traffic and support with samplings to encourage growth in spite of the loss shelf space. This will also clear the extra product coming off the shelf from your backroom”

Remember:

Loss space is an opportunity to engage with your account.
Incremental displays are already in line with the stores flow strategy if you position your brand right.
Loss space equals more of your product in the backroom. Move that product from the back and display it.
Conversely gained space is proof of your brand’s relevance. Use this to introduce new items on the floor in a feature position or multipacks on the runner in front of the cooler.

Even though I dreaded resets in my distributor days, I valued the lessons and strategy when I moved to the supplier side. By adding the resets to my schedule I was able to meet prior to the reset, strategize with my department managers and utilize the changes to my benefit.

How do you use analytics and store flow in grocery stores to sell more beer? Please share in the comments.