Loyalty through Beer Goggles

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The latest buzz in retail marketing involves the introduction of Walgreens’ private-label beer, called Big Flats 1901. It’s gotten a lot of media coverage ­– including a “Tip of the Hat” on the Colbert Report – but does a $3 six-pack translate to long-term customer loyalty, or just 12 ounces of attention?

Previous retailers have not had much luck launching their own beer brands. Fortune Magazine, citing the Private Label Manufacturers Association, reports that private-label beer sales comprised just one-tenth of a percent of total US beer sales in 2010. Among those brands – Kroger’s Tap Room 21 (among others) and 7-Eleven’s Game Day beer.

Meanwhile, 74 percent of consumers said they switched to private-label food products in the first six months of 2010, according a survey by Epsilon Targeting, a leading provider of consumer information. That’s up 20 percent from a similar study in 2009.

But Walgreens has the advantage of launching Big Flats in conjunction with a much broader store reformatting, called “Customer-Centric Retailing.” This plan, expected to roll out to 5,500 stores by the end of 2011, is designed to improve the overall shopping experience by installing lower aisles, bigger and brighter signs and a fine-tuned product selection.

To this end, Walgreens is removing about 3,500 lesser-selling items in favor of big movers, which includes a deeper selection of food, beer and wine. So as the stores unveil their expanded wine and beer displays, Big Flats is front and center.

Gotta give Walgreens credit for its timing. And at its price point, Big Flats 1901 clearly has its market in mind. But can Big Flats win ongoing business, especially among those with CVS Bucks cards? After all, there are a lot of cheap beers out there.

It certainly can, if the product is good and its message resonates. Walgreens needs to reach beyond price and tap into the promised experience Big Flats can deliver. That could be fun. Let’s just hope we won’t need beer goggles to see the appeal.

Lisa Biank Fasig
Lisa leads the creation of editorials and feature stories for COLLOQUY and oversees the work of contributing editors and writers. With 18 years of reporting experience, most in business and specifically consumer behavior, she is highly skilled at researching data and teasing out the trends. A background in graphic design enables her to see ideas in three dimensions and tell the story visually.

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