"Go with your gut"
It’s popular advice for small business owners, but relying on intuition alone isn’t the best way to run your liquor store.
Instead, you should rely on concrete data to set goals and make better decisions about how to achieve them.
Over half of retailers close their doors within five years. It’s a grim statistic, but a critical reminder that you can’t leave your liquor store’s success up to chance.
In this comprehensive guide, we’ll cover everything you need to know about liquor store analytics, including how to track them and how to put them to use.
What We Cover
Part 1: The Liquor Store KPIs You Need To Track
Find out the essential sales and inventory numbers every liquor store owner should keep an eye on.
Part 2: Tracking Data the Right Way
See why tracking data on your point of sale (POS) system is essential and how to lay the groundwork for effective reporting.
Part 3: 14 Essential Liquor POS Reports
Learn about the 14 most important reports to keep an eye on using your liquor POS system.
Part 4: How To Effectively Use Your Liquor Store Analytics
Understand how monitoring sales data can help you make smarter stocking and marketing decisions.
Part 1
Top Liquor Store KPIs and Sales Numbers You Need To Know
Key performance indicators (KPIs) are the metrics that matter most to your business. Tracking specific KPIs helps you establish a baseline for your liquor store’s performance, set realistic goals, track your progress, and adapt as needed.
Click on each card to learn more about tracking them.
Total sales revenue
Income generated from your liquor store’s sales
Number of transactions
How many sales you’ve made within a certain period
Foot traffic
Average transaction value (ATV)
Conversion
rate
Customer retention
rate
Peak sales periods
Cost of goods sold (COGS)
Inventory turnover rate
Gross profit
How much you’ve profited by subtracting COGS from your revenue
Net profit
How much you’ve profited by subtracting COGS and general operating expenses from your revenue
Profit margin per item
Sales by category
Shrinkage and breakage rate
Percentage of inventory you lose to theft, damage, or inventory management errors
Over and understocked items
Part 2
Tracking Data the Right Way
If you look at these KPIs and feel overwhelmed, we understand. If you’re working on an old cash register or tracking inventory manually, then pulling this data is hard work.
With all the responsibilities that come with running a small business, you probably don’t have time to calculate and compare your liquor store analytics manually — which is why we recommend letting your POS system do the heavy lifting.
The Basis of All Reporting
In order to start tracking data you need a POS system that excels in three areas.
.png?width=1600&height=900&name=BPOS%20Reporting%20Guide%20-%20At%20Monitor%20(1).png)
1. Inventory management
The first and by far most important thing you need for reporting is a comprehensive digital stock list. For most liquor stores, this initial inventory setup is the most painful part of adopting a new POS system, but it pays off in the long run.
Your inventory management software tracks information like:
- Item size (e.g., 50ml vs. 100ml, individual vs. six-pack, bottle vs. case)
- Stock code
- SKU
- Item name
- Quantity on hand (cases and items)
- Vendor(s)
- Price, cost, and markup
- Units per case and case cost
- Reorder volume
- Tax rate
- Product category (e.g., mixers, craft beer, red wine)
All together, this detailed breakdown allows you to track your costs and stock levels in real time. If you use a liquor-specific POS system, you can speed up this process by importing products from a prebuilt product library.
2. Integrated payments
There are two ways to ring up customers on a POS system. The first is to process sales directly through the POS system. The second is to use a separate card reader to manually key in the transaction.
This second way requires you to reconcile transactions and inventory manually — which makes seeing sales data that much harder. It also makes it nearly impossible to see real-time sales and register data.
Integrated payments, either through the POS system or a third-party processor, connect your sales and inventory data to create one clear picture of your liquor store’s finances.
3. Vendor management
The final component of liquor store analytics is integrated vendor management. This allows you to keep tabs on supplier costs directly in your system so you can track things like profit margins and changing wholesale costs.
It has the added benefit of letting you generate POs directly from your POS backend, too. You can also integrate with vendors to update your stock by checking against an invoice instead of adding items manually.
Part 3
14 Essential Liquor POS Reports
If you haven’t used reporting and analytics tools in the past, it can be a lot to take in. Most POS systems come with dozens of reports and it’s easy to get lost in the details.
Here are 14 essential reports to get you started.
How To Effectively Use Your Liquor Store Analytics
Now, let’s look at real examples of how you can use your liquor store sales reports to boost profitability, improve ordering efficiency, cut costs, and learn your customers’ preferences.
Master pricing and profitability
Setting prices is one of the most important tasks on your to-do list as a liquor store owner. If prices are too high, you lose sales and send customers to your competitors. If they’re too low, you spend more than you make.
Striking this delicate balance can be tough, which is why many liquor retailers make the mistake of relying on their intuition to set prices that seem reasonable. Luckily, using your liquor store analytics takes the guesswork out of setting prices and achieving profitability.
You can track your inventory costs, adjust your prices, and see an automatic calculation of your profit margin for each bottle. This individual breakdown ensures that you turn a profit on every single product in your liquor store. You can also compare your profit margins between other stores in your state to see if you’re generally higher or lower, pricing-wise.
Improve your inventory management
Effective liquor store inventory management goes beyond knowing what’s on your shelves.
Understanding your customers’ always-changing shopping habits, staying up to date on sales trends, and monitoring your inventory turnover rates helps you stay flexible and make informed inventory ordering decisions.
Let’s say your POS system’s reports reveal a dip in traditional liquor sales and a spike in ready-to-drink (RTD) cocktails. If you continue ordering these products in the same amounts, you might overstock some of your liquor products, leading to cash flow and storage issues. You’ll also understock these popular RTD cocktail brands, resulting in lost sales and disappointed customers.
In short, using your liquor store analytics to inform your product and inventory replenishment strategies ensures the products on your shelves match your customers’ wants and needs.
Identify your busiest days and times
Is your liquor store open when your customers need it most? Your sales reports can tell you.
Your reports should show how your sales trends change by the hour, day, and week. Once you’ve identified your busiest periods, you can make sure your store is open, thoroughly stocked, and well-staffed to accommodate your customers’ schedules.
Imagine your store’s standard open hours are 12:00 p.m. to 7:00 p.m. every day, but your sales reports reveal that 5:00 p.m. until close on Fridays and Saturdays are your peak sales times.
In this case, consider extending your open hours and scheduling more team members over the weekend to plan for the rush and unlock new sales opportunities.
Prepare for seasonal shifts
In the cold months, your shoppers reach for spiced rums, warm whiskeys, and red wines. In the summer, they crave cold beers, refreshing vodkas, and tart tequilas.
Your liquor store analytics should help you anticipate these seasonal shifts in your customers’ wants and needs, giving you insights into which products sell best during different times of the year.
When the weather starts to change, review your historical sales data to identify any seasonal trends. You can then use this information to forecast inventory demand, making data-driven decisions about which bottles to stock.
Come up with new marketing ideas
A good promotion is created with a mix of intuition and data. Your reports can show you what’s trending and what customers are buying together to find upsell opportunities and come up with promotions your customers are actually interested in.
For instance, say you notice customers tend to buy certain brands of beer in larger cases instead of by the six pack. Since these customers are already buying in bulk, try to upsell them by offering a buy one, get one $5 off deal.
Diving into different customers’ baskets also helps you determine if certain items are frequently bought together. These observations are useful for coming up with mix-and-match or bundle offers.
