|Keeping consumers loyal
The festive season is soon upon on us, which means consumers
will be stocking up on their favourite liquor beverages
for the holidays. This is an important time for liquor retailers
and they need to ensure that they capture their share of
the spike in consumers spending.
Traditional supermarket retailers such as Spar, Pick n Pay
and Shoprite have aggressively opened smaller format convenience
type outlets and that must be having an impact on the shopping
patterns and will also enable consumers to access national
promotions without the inconvenience of having to travel
to a large format store or a wholesaler.
Promotional based marketing strategies work well in the
liquor sector and largely determine where consumers shop
for their preferred brands. However, these strategies do
little to promote customer loyalty and often result in reduced
basket sizes and decreased margins for the retailer.
To keep consumers buying from their stores only, instead
of at the competition, retailers need to focus more on the
shopper rather than the products. Short term loyalty programmes
can be a very effective tool to protect margins and increase
customer spend in a period where promotional activity is
The idea of getting four free high quality wine glasses
after spending your allocated liquor budget certainly holds
more appeal than tearing off to another liquor retailer
to save R15 on a case of beers.
Although this concept may be new to retailers in South Africa,
short term loyalty marketing programmes have been used successfully
by a number of retailers overseas. They work by offering
consumers a free reward that has a perceived high value,
as a result of purchasing at a particular retail outlet
within a fixed period of time.
A typical programme would use a stamp collection method
where consumers collect a certain number of stamps to build
a set. They remain loyal to that store because they can
only complete the set by making purchases (and collecting
stamps) from that store.
As South African retail becomes more difficult to operate
in as a result of new competition, liquor retailers, in
particular independent liquor stores, will need to think
out the box to remain profitable. A short-term loyal marketing
strategy may just be what’s needed to achieve this
in its ability to keep consumers loyal.
Wendy Smith and Craig Ballantyne
Please feel free to make comments or raise new issues by
emailing the editor
DGB(Pty)Ltd was formally established in 1990, although our
true roots extend over 300 years when winemaking began at
the Boschendal and Bellingham farms in the Cape Winelands.
In fact, we were doing things a little differently in the
1940’s already, when Douglas Green pioneered the wholesale
sales model for wine in Paarl.
by Profumi D’Italia
The Bottega and Alexander brands are the result of the work
of three generations of Italians involved in the world of
wine, grappa and organic foods. Their premises are located
in a 19th century farmstead 45km from Venice in the romantic
Prosecco grape growing area of Conegliano Veneto.
& wine pairing dinner with oriental flair in Die Bergkelder