The Big Brands are getting stronger and stronger and forcing retailers to make less margin on the volume brands. Big chains love using big brands to compete on price.
How do you stand out in a crowded market place? There is so much competition, just in KZN alone there are 8653* licenced liquor retailers and they say Distel has about 40,000 direct customers in South Africa. That’s a lot of competition!(*source Kzn Liquor Authority, April 2019)
Retailers must differentiate or …!
How can you differentiate your store from the competition?
- Price. The “secret sauce” in retailing is differentiation beyond price. If retailing is only about finding products at the best price, then it’s “game over”. Competing on price is a race to the bottom. When the big brands start a price war, the big chains will win!
- Differentiation by product. Given the competitive pressures retailers are facing from chain stores it is essential that you differentiate your store to drive sales and profits. Local Craft beer and Small Batch spirits currently offer a great opportunity for retailers to differentiate themselves from chain stores.
- Build a network of suppliers. Surround yourself with a great team of suppliers. Collaborate with your suppliers. You’d think that working on retailer-supplier relationships should be a no-brainer, it should be your no 1 priority.
- Communicate Your Difference How are you communicating with your customers and your potential customers? Starting a Facebook page is easy. Getting paid page likes is easy, but not necessarily the best strategy. Grow a tribe, a community of loyal customers. By giving them interesting and relevant information. Please don’t post silly things like “Happy Monday”| How does that add value to anyone? Post regular and relevant content. You can use your Facebook page to introduce your staff to you customers. Run interesting competitions with real prizes. Growing your social media profile is a lot of work and it takes a lot of time. But please don’t outsource this important job to an agency that has no liquor knowledge.
- Service. Offer good old-fashioned service, invest in training your staff, employ people to help sell and serve your customers on the floor, especially on busy days this makes a big difference.
- Join a franchise or group. There are a number of very good franchise and buying groups in South Africa. We would like to invite you to join DrinksBiz a Network group for business owners and professionals in the beverage industry: www.drinksbiz.co.za
DrinksBiz, a powerful network for business owners and professionals in the beverage industry.
Success stories: Differentiate and Thrive!
Meet Tony Da Costa. Tony started Liquor City Claremont 7 years ago. The previous owner sold because of the threat of a new Woolies opening down the road. This did not worry, our hero, Tony. Tony wants to be different and competes with the Big Chains on his terms. In 7 years Tony transformed the original 30 sqm store into a store in excess of 400 sqm, and Tony proudly boasts that he now stock 500 whiskies, 300 gins, 800 beers and 2000 wines.
Listen to the DrinksBiz Podcast interview with Tony da Costa, owner of Liquor City Claremont. Tony is a Hero of the Industry. Tony has a team that makes 400 calls every week to ensure that their shelves are stocked and ready for the busy trading weekends.
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Meet Michael Egling, owner of Hillcrest Kwikspar & Tops, a warrior in the fight against low margins and boring retail. Surrounded by many other big liquor stores, Mike has created a unique shopping destination with many superfans as customers. Mike you are a Hero, thanks for always supporting the small guys and for investing in Service!