As the dynamics in hospitality shift, acquiring new insight is key in order to move quickly and remain ahead of the curve. Bars, specifically, face unique challenges as businesses reopen. The pandemic forced many bars to close, and many others incurred significant losses. . And even with safety parameters in place, there are challenges that threaten the industry. Owners are zeroing in on strategies and information that provide direction on how to increase bar sales quickly.
The bar business has always operated on thin margins. Even before the pandemic, bar owners struggled with costs. And many owners discover that cost-associated risks pale in comparison to revenue-generating challenges. Increasing competition means it’s crucial to identify the best ways to boost sales.
Alcohol Industry in 2021
Coronavirus single-handedly set forth a new wave of industry norms, effectively leaving statisticians and economists hard pressed to accurately assess where various industries will go from here. Hospitality, which includes restaurants and bars, are likely facing some of the greatest challenges. Some important numbers reveal just how dramatically things shifted last spring.
To put it into perspective: in 2018, off-premise liquor sales in the U.S. totaled $113 billion. On-premise sales represented $147 billion. In 2020, a NielsenIQ study revealed that off-premise alcohol sales rose 36% while on-premise alcohol sales dropped nearly 75%.
According to IBIS World data, the alcohol industry has been on an upward trajectory since 2014. Its market size in 2019 was valued at over $30 billion, a 30% increase from a decade prior. While 2020 was a catastrophic year for the industry, market indicators hint at recovery. The same study suggests a potential market sales increase of more than 15% in 2021. With the pandemic nearing its end, people will return to hospitality venues to celebrate.
Increasing Sales is Vital to Bar Industry Recovery
While industry macro trends look promising, what does it mean for individual bars? What factors should you consider and how can you increase bar sales once reopened?
In many ways, bar owners face some of the same dilemmas as they did in years prior to COVID-19. That is, stiff competition plus lack of distinct products and, to some degree, market saturation, result in many owners focusing solely on unique selling propositions (USPs). Is differentiation among products and services enough to create loyal bar patrons?
Of course, the most fundamental way for bars to meet revenue goals this year is simply by increasing the number of patrons within the establishment. On one hand, this won’t be hard to achieve as most bars are sitting somewhere near rock bottom at the moment. As the hype of reopening fades, however, bars will still need to contend with social distancing in an industry that heavily depends on social interaction for success. Suffice to say, happy hour will probably look vastly different.
Strategies to Meet Sales Goals
Technical innovation may play a key role in achieving revenue growth for bars. Additionally, bar patrons’ preferences should always be considered when crafting bar menus, drink specials, and other engaging campaigns that will help with short-term recovery. In short, factors to consider should include tech upgrades, upselling strategies, and well-informed promotions.
How to Increase Bar Sales Quickly
We’re looking at both short- and long-term ideas for increasing bar sales.
1. Reconnecting with Local
Personalized services are becoming more commonplace among businesses across nearly every industry. As markets become more competitive, trends indicate that building loyalty means connecting with customers in a real, human way.
In 2018, the U.S. boasted over 7,000 craft breweries. Additionally, the expansion of distilleries and wineries may indicate a preference for local, authentic products. The takeaway is for bar owners to consider how to promote local products while remaining engaged with community residents, businesses, and other establishments. This will help to ensure a bar is contributing to a broader ecosystem within the same district, town, or city. Overlooking localized campaigns can be costly in the long-run.
Consider these tips:
- Developing a social media strategy that connects with local events, businesses, and more
- Encouraging word-of-mouth marketing
- Understand how cross-promotions might work with your establishment
2. Focus on Premium Product
A busy bar doesn’t necessarily provide a direct boost in revenue. Premium or top-shelf products are always going to yield higher margins than mass market liquor. Therefore, it’s generally a good idea to invest in high quality products and ingredients for quicker gains.
Are high-end cocktails in demand? Absolutely.
Market data indicates that bar patrons are more likely to splurge on higher-end cocktails, beers, and wine. According to the Distilled Spirits Council of the United States (DISCUS), high-end spirits represented 40% of revenue growth in 2020. Various studies also reveal customers are more frequently choosing Mezcal/Tequila, Cognac, and premium American whiskey.
Adopting to these trends means staff focusing on upsells during transactions. The downside is that bartenders are not immune to leaving money on the table. Rush hours, happy hours, and busy nights can cause bartenders to default to easy mixers in order to provide quick service. How can you combat this trend?
Peak Bar Hours & Time-Consuming Cocktails
Define a method on how to increase bar sales using upsells and new technology. The common dilemma is premium cocktails means more complex and time-consuming drink orders. During peak hours, a bar is responsible for quality service while trying to move quickly through patron orders. Under these circumstances, bar employees often resort to simple beverages and while those can bring in more customers, they also have smaller margins and may, in fact, be more costly in the long-run.
Gloworder is a new app designed to resolve this predicament. Through an easy-to-use interface, patrons can utilize Gloworder to connect with the bar’s menu from just about anywhere. It allows customers to order ahead, engage with promotions, and sample higher-end products without delaying bartenders during peak happy hours. Learn more about bar owners’ options for integrating a virtual menu into existing business systems.
3. Create a Marketing Plan
Growth rarely happens without marketing. That’s never been more true as the majority of people rely heavily on digital methods to connect with family, friends, and yes even businesses. Bars that incorporate some form of digital media promotion garner more visibility and return on investment for their marketing dollars.
For example, a highly engaged Instagram page that profiles a bar’s unique cocktail specials list–especially when executed well–can generate buzz and bring excitement to menu changes, weekend promotions, and loyalty programs. Working in tandem with localized marketing, digital media can help answer how to increase bar sales quickly.
Branding is Important for Bars
Every industry hyper focuses on competitors and the competitive landscape of the service industry. As generational shifts occur, some bar owner’s are recognizing the importance of building a brand rather than exclusively focusing on competition. More apt is that bars are competing, instead, with the last great experience their customers had. In other words, bars should work to make the experience such that it exceeds expectations and is memorable.
Building a brand can help create a cohesive vision that pronounces how a bar operates and what their customers can expect from the service and unique drink offerings.
Increasing Bar Sales with Seamless Technology
If digital is the future, bars should be looking toward up and coming technology, software, and apps to answer efficiencies and flows within a given operation. The major bar industry disruptors include:
- Self-service options
- Mobile check out
- Contact less ordering
A few bars are creating a different environment built entirely on a self-service model. These establishments allow patrons to pour their own beers, mix their own flavored cocktails, and more. It certainly helps with efficiency and flow, but more importantly, does it address the issues that came to the forefront with coronavirus?
Mobile check out options are now vital systems for a bar’s success. Mobile checkouts provide convenience and contact less methods to avoid exchange of cash or cards. However, mobile websites can still pose some obstacles like managing QR codes and maintaining websites ongoing.
Gloworder: Built for Bar Patrons & Bar Owners
A newer option is utilizing an app designed to service patrons from a simple interface. Gloworder was created to address an existing demand that met COVID-19 regulations while helping to answer questions around how to increase bar sales. This app allows customers to create new orders in advance and provides a seamless experience for receiving drinks and checking out. From start to finish, bar patrons and bartenders can integrate technology for a better buyer and seller experience.
Alcohol Selling Best During & After COVID-19
Finally, it’s also to continually examine industry trends to incorporate new selections that resonate most with bar patrons.
There are a wide variety of trends taking place in response to COVID-19. For example, tequila experienced a 75% uplift, confirming its spot as the fastest growing spirit in the industry. It was followed closely by gin. Wine sales were up 66% and beer sales rose 42%, although trends indicated slower moving progress for beer sales.
For more information on our app and how to integrate your bar with our proprietary system, contact us here.