When I visit coffee shops the first thing I look for is product, either hardware that is being used or offered for sale.
A small amount of shops will have a few items for sale next to the till, some will go further and have a small shelf or two, very few will have any decent amount of wall space turned over to retail product.
I think coffee shops are missing a large opportunity. If you think of the huge growth in speciality coffee and public growing awareness of good, tasty coffee. These people want/need to update and try new coffee brewing devices. A great place for them to learn about coffee and see new coffee making devices is their local coffee shop. Think about the devices we use to make coffee, Aeropress, Clever Dripper, V60, Espro Press, Chemex. There are no high street shops selling these. These products aren’t the type of products the people go shopping for. If you had never heard or seen a Clever Dripper your not going to go in to Argos and say the person behind the counter how much are your Clever drippers? People need to be shown these products, they need to be in a shop that offers coffee and coffee products, they need to be somewhere they feel they can ask the guy behind the bar for advice on brewing coffee, they need to be able to browse a coffee retail space and discover these products for themselves.
That’s where cafe owners need to take advantage of this opportunity, peoples appreciation of great coffee is growing and not only will they need great coffee they will want great, new brewing devices.
Anecdotally we have seen cafes that start offering brewing devices see their retail sales of beans double. If their brewing device needs filter papers guess where they come to get those, you!
Most cafe’s say they don’t have space to retail product, my response is find space! Look around, is there any wall that is bare, if there is put some shelves on it, can be floor to roof, near the toilet, anywhere! The products don’t have a use-by date, they mostly have pretty cool packaging but most of all it’s another revenue stream for you.
Here is a list of items cafe’s need/should be selling to customers:
1. Hand Grinders. You don’t want to be grinding a whole bag of coffee for your customer, it doesn’t do the coffee justice and it doesn’t do your customers taste buds justice.
2. Choice of coffee brewers. Think price, what would you think your customer would be happy to spend on a brewing device? Something around £20-£30 is a good price range and most brewers fall in that range.
3. Filter papers. Most brewers need filter papers. If they buy the device from you they are most likely to buy the filter papers along with their weekly bag of coffee.
Start with a select range of products, 4-5 is all you need to start, then add more as sales grow. Main thing, keep the shelves stacked with product! Empty shelves or products on their own look sad, lonely and uninviting. Have one if each product out of its box so customers can pick it up and discover it. Don’t wait until you have sold out of an item to order more, keep the shelves full, clearly label price and description.
Tempt customers into buying hardware if they already buy beans. Maybe have a deal on a bag of beans and a hand grinder. Maybe have a 10% off when they present a full coffee loyalty card.
Start looking at the numbers and see if retailing coffee products makes sense to you. Gross margin on most items is 20-50%, say you sell 10 hand grinders and 10 brewing devices a week, that’s about £550 in sales. Maybe pay the staff commission on the sales, get them involved and give them the opportunity to increase their pay. Or reward the staff member with highest product sales. Reward them in a way that makes them feel special (this another blog post coming!).
I see retailing coffee hardware as a massive opportunity that should seriously be looked into.