Study: Start at the Core to Optimize Your Beer Assortment

NATIONAL REPORT — Within a convenience store retail outlet, the cold vault space is the beachfront property in the store and, on average, there are typically five cold vault doors dedicated to beer. To help c-store retailers optimize their beer assortments within that valuable in-store real estate, Anheuser-Busch/InBev (ABI), IRI and the Category Management Association (CMA) partnered on a new study — the results of which were released recently to Convenience Store News.

“Anheuser-Busch wanted to better understand if there was a correlation between the SKU density and the top-quartile stores,” ABI’s David Vartanian, senior director, national category manager for convenience, package liquor and military, said in an interview with CSNews. “Our research suggests that having the optimal days of supply to meet consumer demand during peak in-store shopping timeframes is critical to the success in maximizing beer cold vaults.”

This research, using IRI’s c-store data for the 52 weeks ending September 2016, provides the c-store industry with suggestions and solutions that present a fresh perspective on a category solution for assortment, according to Vartanian. The approach was designed to optimize the retailers’ alignment between the beer category and their store strategy, while offering a balanced assortment to meet the diverse needs of all beer shoppers.

According to Gordon Wade, director of the CatMan 2.0 initiative for the Category Management Association, this joint research report follows the gold standard assortment approach developed by 20 thought-leading companies in CatMan 2.0.

“ABI and IRI have, for the first time, combined all the new external syndicated data with their internal proprietary data and breakthrough analytical models to develop this Core Assortment presentation. It is gold standard,” said Wade.

For ABI, this was the first study of its kind. “We added an additional layer into our research to help us with our understanding of the industry,” said Vartanian. “The store archetype is a new concept and approach, and we applied this into the optimal assortment process for more custom solutions.”

With this approach, the researchers were able to move away from making blanket observations about the market, and instead approach from a more well-rounded and custom perspective.

Vartanian shared two of the most important takeaways from the study:

1. The c-store industry can see which archetype each store belongs in, whether it’s a highway hub, an upscale hotspot, a vacation station, a college town, etc. Shoppers behave very differently in each of the archetypes based on their demographics, trip mission, store location, and other factors. These insights can influence the assortment provided in each particular retail outlet and ensure the items on the shelf mirror the shopper needs.
2. The research also suggests that it is important to have the correct days of supply on the top-selling SKUs in the cold vault. Two major shopper occasions make up 67 percent of shoppers’ purchase decisions: “for me, for now” accounts for 41 percent, and the “social beer run” accounts for 26 percent of mission trips. Understanding these shopper occasions can influence optimal assortment. For example, a retailer can meet the requirements of the “social beer run” by having the right assortment of multipacks, and meet the requirements of the “for me, for now” shopper by understanding the critical importance of an optimal assortment of singles.
    

The findings of the study provide retailers with a framework that suggests they begin by identifying the “must-have” core items available nationally, then add in regionally relevant and local items that provide incremental sales and variety. Following this strategy will lead to higher in-stock availability.

 “For us, it all comes down to understanding the role each SKU plays,” said Vartanian. “Our research suggests that focusing on top-selling SKUs can create an opportunity for reduced delivery issues, less point-of-sale costs, less inventory complexity, and higher days of supply.”

Look in the October issue of Convenience Store News for more findings from this study.