IS THE PRICE Andrew Arnold, NZ Country Manager, Shopper Intelligence, shares why pricing strategy is crucial for liquor retailers.
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t doesn’t matter what product or channel we are talking about, the price we pay for something is always a factor in deciding what we are going to do and liquor is no different in this respect. However, price is not always the most important factor when making a purchase. Plenty of other factors come into play – do you want something premium? Do you have a favourite flavour? Am I looking for something healthy? But despite that, it is crucial that your pricing strategy takes into account the shopper mindset on price in your category as there are different approaches to be taken depending on the answer. PRICE KNOWLEDGE When you want to understand how to approach price in any given liquor category, look at the pricing fundamentals. 10 THE SHOUT NZ – MAY 2021
The very first of these ‘Price Knowledge’ whether or not shoppers actually know the price they are paying. Whether they are right or not isn’t really the point, it’s the fact that they either think they know or they don’t. Why does this matter? If shoppers think they know the price, then there is a much greater chance that they will notice price movements or anomalies, a big factor to consider when doing annual price increases for instance. How aware they are of price will play a role in how sticky they are. A second factor to consider is one we call ‘Price Beacon’. This metric measures two things: 1. How likely a shopper is to judge the whole store on its overall price competitiveness based on that single category, and 2. How likely they are to price compare across banners and even channels. If you have a category which is high on both Price Knowledge and
Andrew Arnold, NZ Country Manager, Shopper Intelligence With 20 years’ worth of experience in NZ FMCG, Andrew has worked in a wide variety of sales and insights roles with the likes of Red Bull, Gordon & Gotch and Energizer. During his career he has led sales and insights teams to develop insight-led strategies that drive both retailer and category growth.
