Liquor store shelves are crowded. I mean, really crowded. Not just in type of liquor, but in sheer flavor variance. Smirnoff alone offers more than 20 different varieties of vodkas; because, well, apparently there’s demand somewhere out there for flavors ranging from Honeydew to Amaretto spiced. There’s also abominations like 'Cookies and Cream' whiskey and 'Dark Chocolate' tequilas; unicorn tear gins and sesame and popcorn daiquiris. Gross.
For liquor store owners, making sure they have the right inventory can be the difference between thriving and going out of business entirely. And so, to help them keep the good stuff on the shelves and keep the stuff like red wood ant-infused gin away—far, far away—they are placing their faith in retail analytics. The efforts of three such stores were recently chronicled in The Salt Lake City Tribune.
The short of it is this:
Three Utah liquor stores found that they had plenty of offerings on the shelf of booze that people didn’t particularly like (like, again, red-wood ant!!!? infused gin), and nowhere near enough of popular drinks; especially when it came to certain holidays. For instance, they failed to have a large enough stock of Bailey’s in time for all those drunken holiday season egg nogs, and nowhere near the recommended amount of champagne for New Year’s Eve celebrations. Customers, as you’d understandably imagine, were not happy.
As to why the sudden move to retail analytics, Utah Commissioner Olivia Agraz said: "We have to make sure products are available. Besides the complaints, we lose money.” They hope to better optimize their inventories towards their customer’s favorite items.
And the problem isn’t just limited to Utah; inventory optimization is a major hurdle for liquor stores pretty much everywhere. BevRoute, an industry trade publication for “alcoholic beverage importers and distributors,” said of managing a liquor store inventory:
“From small town wine shops and liquor stores to regional distributors and international importers—unsold inventory threatens the business’ survival. When inventory begins to stagnate and stockpiles of merchandise begin to impede business and tie up investment, owners and managers are forced to take action.
Inventory can make up to 50% or more of a business’ current assets, and poor inventory tracking is a major factor in business failure. Not to mention that a GS1 US Survey found that the average inventory accuracy threshold for retail operations is only 63%. That means that not only does inventory represent a retail business’s largest investment of capital, but also that this investment tends to be poorly monitored, and as a result, mismanaged.”
The three Utah liquor stores will review the retail analytics program in September to see if it’s made an improvement on the overall assortment of their inventory, money earned, and customer satisfaction. If the results are positive, they plan to roll out it out throughout the state.
We have every reason to believe it will be a success—so long as they keep that damn ant-infused gin off the shelves.