Alcohol is one of the core revenue generators in the convenience store space. It’s a product line that is guaranteed to drive traffic into stores and increase the overall basket-size per customer. How can we capitalize on these realities and maximize our beverage alcohol profits? On the other hand, how can we be sure we’re not missing margin opportunities on our existing beverage alcohol sales? As technology in our segment continues to progress, there are a few key strategies that convenience store operators can follow to not only ensure expected alcohol margins are protected but can begin to take profits to the next level.
Take Control of the Order Process
Typically, we rely on POS data and inventory management systems to dictate our par levels and guide us throughout the order process – but it’s not uncommon for a vendor to show up, look at the coolers, and decide where their products can fill your gaps. In cases like these, we lose the control over what products make it in the back door. Do the products reflect our sales and inventory data? By allowing distributors to fill in the gaps, we are forced to work with what we receive and may be losing out on quantity discounts or even shrinking our profit margins and overall revenue. Implementing an online order method and regaining control of the order process can ensure that you’re ordering in the most efficient way for your business, always receiving discounts where applicable, and are purchasing the right products for your store. This also gives you the autonomy to introduce new products into your portfolio when the market calls for it – like the growing hard seltzer trend.
Embrace the Tech
The availability of technology within the industry is expanding every day, both on the consumer and business operations side. It’s time to take advantage of the technology that’s available, that will significantly reduce manual processes, and positively impact our bottom line. Challenges like maintaining an accurate order history, a comprehensive record of paper invoices, or focusing resources on prepping payment upon delivery, can be overcome through automation by partnering with technology solution providers. For example, by simply switching to an automated payment method, you’ve immediately cut down delivery times, eliminated excess costs from money order prep, and increased location level security by reducing the need for cash on-hand. This approach offers a digital process for invoice management and provides corporate offices with insight into the purchase habits and alcohol spend for each location. Finally, by gaining digital copies of your invoices you can directly import this information into your back-office system, eliminating countless hours spent on manual data entry and the potential inaccuracies that accompany those processes.
Drive Decisions with Data
Arguably the greatest benefit of adopting digital management tools available in the industry is the opportunity to make decisions for your business based on accurate and timely data. Review your order history to ensure you’re taking advantage of discounts while avoiding unnecessary delivery fees, and ordering to the cadence that makes the most sense for your locations. Compare your expected pricing to what was actually charged on your invoice, allowing you to recover credits or update retail pricing in real-time to proactively protect or increase your margins.
Alcohol management solutions like Fintech are digitizing the operations process and equipping companies with smart insights that eradicate manual processes. These technologies provide unparalleled visibility into alcohol spend and buying behaviors and afford opportunities to optimize your business decisions. If you are interested in learning more about Fintech’s alcohol management solutions, click here to email us.