How can a convenience store operator know whether installing a beer cave is worth the cost?
The answer varies based on the actual cost to build, the amount of remodeling needed, and a dizzying array of related factors. These can include the overall size of the store, the ongoing cost of maintenance, local energy rates — which can vary greatly depending on several factors, including geographic location — the demographic composition of the customer base, the types of nearby businesses and schools, store hours, local competition, the frequency of promotional activity, the effects of gas prices and inflation, the local economy, the size and use of the marketing budget, and how much revenue could be extracted from the same square footage if used for something else.
Evaluating these factors can help determine the opportunity for growing beer sales at your c-store.
While prices vary based on a slew of factors, generally speaking a small eight-foot-by-eight-foot beer cave could cost around $15,000, while a 20-foot-by-20-foot model complete with glass doors could run in the neighborhood of $75,000.
Convenience store retailers should consider the demographics, total square footage and other factors before deciding to devote the space to a beer cave. A good place to start is with the demographics of the people who visit your convenience stores and the store’s beverage sales. Next, look at the competition for beer sales in your area. Other likely nearby options for beer are grocery and liquor stores, neither of which provides the same type of convenience. Still, keeping tabs on the competition is key to any product category. Only after this has been done can a marketing campaign be crafted. Marketing the beer cave is an essential part of ensuring a good return on investment (ROI).
Appealing to Core Customers
Keep in mind your core beer customer when it comes to marketing campaigns.
“Retrofitting a portion of the c-store to a beer cave to improve traffic and sales strikes right at the heart of how consumers buy brands,” suggested Jim McDonald, a partner in Naperville, Ill.-based Chief Outsiders, a Fractional CMO firm that helps CEOs accelerate growth through the development and disciplined execution of well-crafted growth plans. “They buy with the right-side, or emotional side, of their brains — so visuals and man cave/beer cave symbols can make for powerful persuasion versus putting up rationally developed signs with lots of words on them.”
The psychology extends to signage as well, McDonald said. “Most men lust for neon-branded beer signs for their man-cave; I have a Cubs Old Style Beer neon sign in mine, so I’d use neon beer signs as secondary prizes in a Win a World-class Man Cave for Your Home sweepstakes. Or you could do a Show Us Your Man Cave online promotion that is more sharing via social media anchored.”
These kinds of promotions can be pre-tested to calculate traffic and sales increases and ROI, McDonald said. With online registration, they could also render a database to allow a retailer to send emails and text ads to the best customers in their neighborhood, extending the promotional tail beyond the contest dates.
