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Data is driving Co-op wine range changes to help continue growth

Published:  18 May, 2016

The Co-operative is gaining ground in an ultra-competitive channel and at yesterday's summer tasting which previewed several of the new wines being introduced to the retailer's range, the science behind the changes seems to be paying off.

In March the Co-operative made 'revolutionary changes' to its wine range and it changed the way in which many buyers on the team approach their jobs according to Simon Cairns, the category manager for beer, wines and spirits.

"We have used a lot of our membership data and we tied it in with Nielsen Answers on Demand, so there is a lot of shopper insights and supplier insights that have gone into informing us for the changes we made. We are the looking at getting the right products put into the right stores at the right times," said Cairns.

The Co-op looked at the data and found that customers can be 'clustered' or often share several different attributes that shape how they are shopping and what they buy.

"Historically we had a range which we segmented basically by store size. There was no science other than store size which dictated how many SKUs a store could take," explained Cairns.

Simon CairnsSimon Cairns

Now customers can be segmented by 'clusters' which often relate to store location, shopper needs, style preferences and habits found at specific stores. In turn the clusters can then dictate the products that would best meet the needs of a customer at that store or other stores that similar across the UK.

He said: "We can start to cluster similar shopper types, similar mission types. We can see that we have a very similar customer with a very similar basket at the St.Paul's Co-op in London to a city centre store in Manchester or Leeds.  We can build a cluster that would be an 'on-the-go' for that type of customer that goes to that type of store."

Cairns applied the data then to help inform wine buying and building the range of just over 300 wines. "So the cluster for a store like the one by St.Paul's might be very transient and have products for immediate consumption. Chillers are really important, small bottle size is really important, things like Champagne will be really important as we are around lots of offices. That is really relevant for a store of that type, but less relevant for a rural store."

The Co-op has used these clusters to help shape its entire wine range and it seems to be working. Kantar's latest figures released earlier this month, show "against the difficult market backdrop the Co-operative's renaissance continues, growing sales by 3.3% year-on-year. Its market share has risen to 6.2%."

Some of this according to Cairns is a reflection of the change in how shopping habits have changed and that the Co-op has a number of smaller stores so they are well placed to capture more shoppers. But some is also confirmation that product selection is ticking a number of boxes for consumers.

Co-op is rolling out two new premium Prosecco for example.  Sales for Prosecco at the Co-op were up 51% on the back of a record-breaking year in 2015 and this year's sales show no signs of slowing down. Five new French wines were introduced as well, some again on the premium end.  Three new wines from Spain and from South Africa were also available to try as well.

The changes to range have not meant a simplification, but more when looking at the range as a whole making sure every wine is satisfying a number of the different customer clusters.  The range is working smarter, not harder for the Co-op, which in the convenience sector is crucial as space is so limited.

"We have a huge volume of shoppers coming in to our stores and my challenge is to convert more of them to buy from us. How do I do that?  I want a really compelling and engaging range and I want the quality to be as good as it can be. I want pricing to be competitive and offer really good value," said Cairns.