Network Breakfast - LMG & Shopper Intelligence

LMG’s General Manager of Merchandise and Marketing, Damien Page, and Shopper Intelligence’s Managing Director, Simon Ford, were co-presenters at Tuesday morning’s Drinks Association’s Network Breakfast, exploring how to improve commercial success by listening to the shopper.

The two industry leaders have worked side by side over many years with LMG relying on Shopper Intelligence’s insights to reflect on its ranging, pricing and to understand its shoppers’ interactions with its liquor store network.

“Tangible insights lead to tangible commercial outcomes,” said Ford.
LMG shoppers skew younger. They shop for today or for the occasion. Price is important to these shoppers but in the end, “it simply came down to the right range,” said Page.

LMG has worked closely with suppliers to build the right range for its stores before fine-tuning its offer.

The business has been big on creating occasion focused displays in-store and online, with calls to action such as Celebrate with Bubbles which runs from Spring Carnival until Christmas. LMG has also invested in big outdoor signage: Turn Right to Start your Night - and this season has invested in an on the ground presence on the sidelines promoting Bottlemart and XXXX at the footy. All outdoor marketing is reinforced via e-commerce and in-store with displays, described by Page as the “silent salesperson” and designed to help the shopper and the in-store team of staff.

Page emphasised the importance of the silent salesperson in-store, particularly when it comes to wine purchases. He said that at LMG stores, ‘12 per cent of bottled wine purchases are triggered by a catalogue’ and that wine drinkers ‘want theatre at shelf to help them choose’ their drink for the occasion.

LMG’s ranging has been guided by premiumisation and underpinned by the goal to have shoppers visit their stores for ‘just one more occasion’.
While having worked together for a number of years, around three years ago, Shopper Intelligence insights helped LMG to identify the opportunities that lay in the premium space. They subsequently explored the leaner categories where there was room to expand, along with products that shoppers are willing to pay more for.

Shoppers have rewarded LMG’s expanded ranging. Its premium wine program has led to a basket size that is 68 per cent above the average and the premium wine category is driving 19.5 per cent of total wine category growth, said Page.

Shopper Intelligence insights also showed LMG that Champagne is the number one category driving people in-store to make their Champagne or Sparkling Wine purchase for occasions.

“We simply did not have an offer,” said Page.

With an improved range – based on data - Champagne sales for LMG’s network have more than doubled over the last three years. After significant investment, Scotch whiskey is also now bigger than Bourbon in-store, again in response to shopper demand.

LMG is extremely active in the ever-changing NPD space working to ‘execute fast and to fail fast’. They roll things out quickly, keep the favourite brands easily visible on shelf – think White Claw, Brookvale Union, -196 and Billson’s – and roll in the new products week to week. Shoppers cannot get enough of -196 from Beam Suntory, said Page, and in its second year in market, White Claw sales are 45 per cent up on its first year in market (which was sizeable in itself).

Ford said: “All of our shoppers are telling us that LMG are the best retailers at triggering pre-store decisions and driving traffic through their pre-store marketing.”

This is particularly strong in the digital space where LMG recently launched its apps.

According to Shopper Intelligence, LMG is also ranked the first retailer for innovation, with the top 5 categories of: Craft Beer, Liqueur, Champagne, Sparkling Wine and Cider. Health and RTDs continue to grow as well, even beyond COVID.

“When the footy went back on, the RTD category just shot the lights out,” said Page.

RTDs now account for nearly 25 per cent of liquor sales and 44 per of those are bourbon RTDs. In the three years to February 2023, RTD sales grew by almost 80 per cent.

NPD contributes $55m annually to the RTD category and over the last 12 months alone, NPD has contributed $25 million to growth overall. Both Page and Ford agree that senior buy-in and collaboration is essential and that shopper insights are the starting point for commercial success.

“Shopper is not another project. It’s not something that we do when things are going well and when we have budget. It’s got to be consistently the way that you do things.

“The shopper has to be at the heart of things. It’s not just an execution at the end of the strategy driven by something else,” said Ford.

After 24 consecutive quarters of growth, looking to the future and the future needs of shoppers is the way LMG intends to keep that growth going.

Shopper Intelligence is a Corporate Partner of the Drinks Association.

Network Breakfast - LMG & Shopper Intelligence
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