"Right range, clear merchandising and effective promotions are imperative for in-store effectiveness": Shubhranshu Singh, Diageo

Diageo's head of customer marketing shared some examples and insights on in-store planning and the overall wine and spirits retail set-up in India.

At the In-Store Asia 2011, Shubhranshu Singh, head - customer marketing, Diageo, made an interesting presentation on the wine and spirits retail scenario in India and the shopper marketing opportunity for brands.

He discussed how the Indian consumer is evolving steadily and so is liquor retail. Earlier, spirits and other alcoholic beverages were sold mainly through 'caged' stores. This was followed by over-the-counter shops, and in some places, walk-in stores. Going a step further, certain stores now have tasting rooms, but these have to have a special hybrid license.

Singh pointed out that the over-the-counter shops represent 80-90 per cent of the total alcohol beverage market in India where the man at the counter is the only point of interaction. Moreover, 70 per cent of the limited walk-in stores that have come up in the recent past are located in Bengaluru, Mumbai, Delhi and Gurgaon. These are increasing gradually, and are situated mostly in high profile residential areas.

The problems that this category faces include no planogramming or category grouping. For instance, a bottle of wine could be placed right next to a bottle of beer, both targetting very different audiences. Also, price points are irrelevant in the finalising layout. A bottle of whisky costing Rs 5,000 may be placed beside a different product costing Rs 550 a bottle.

"What a brand wants," shared Singh, "is impactful visibility, right range, shopper engagement, higher pick-up and selection rate, high average bill value and one stop shopping, where consumers can pick up snacks, mixers, soft drinks and drink equipment as well."

Therefore, when it comes to in-store effectiveness there are three imperatives - right range, clear merchandising, and efficient promotions.

For right range, which is optimising the assortment of offerings placed in-store, one must deliver a range recommendation that highlights products for the consumer. Also, if your brand is not seen - and this can be applied across categories - it means you are not available to a shopper. On the other hand, range complexity or packing the shelf with too many different products in the category, will lead to shopper 'blindness'. The customer will fail to focus on your brand.

An interesting insight Singh shared was that an alcoholic beverage store could be compared to that of a chemist's. A customer who wants to buy a bottle of Scotch whiskey for a friend, but doesn't drink it seeks and trusts the retailer's expert advice on what to buy. He will invariably go back to the same store, thus establishing a relationship.

For clear merchandising, it is important to deliver a clear navigation to the category, as well as providing a clear layout of the category with the right space allocated to segments (that is proper segmentation of vodka, whisky, gin, rum), brands and sizes to ensure 100 per cent availability.

As for brand promotions, event-led and value-added promotions work better than pure price reductions. Singh gave the example of Diageo, which launched Smirnoff, its popular brand of vodka with a two-bottle pack, and free gifts worth Rs 178 to customers. It encouraged consumers to use the pack to make the 'Smirnoff Mule' cocktail, which was mixed with ginger ale. This was done at around 500 outlets across the country successfully.

Singh also shared some other lessons learnt. In-store communication is 'actual communication'. It not easy to pull away a consumer from his preferred brand at the point of purchase, but definitely possible. "Moreover, a brand should speak to a consumer with singular focus so as to not confuse him by going. Moreover, if the customer is educated about the product, his buying behaviour can change," he said.

The wine and spirits retail stores are today cluttered and cramped with numerous brands and messages. It is mostly over-the-counter sales as opposed to walk-in. But, Diageo intends changing certain things and using new spaces in-store, glow signs, free space from ceilings and better displays.

According to Singh, while the liquor retail is evolving steadily and shoppers are switiching preferences much faster, miniaturisation is a requirement where you must learn to adapt your brand to a small size store. Moreover, information and education create preferences. "We're changing things around, but slowly. Do less, but do it well," he concluded.