Why do we call it pre drinks?

Changes in the nightclub industry: Is 'pre-gaming' killing you?

It can be easy to think change isn’t necessary when there is no immediate problem-but success in any industry is down to ongoing and continuous innovation and embracing change.

The nightlife industry is unlike any other industry; the level of competition is fierce and the market is volatile, nightclubs close down at an astonishing rate, particularly in the last decade (the number of nightclubs in the UK has nearly halved); the Great Recession put a serious dampener on partying! The downturn has also seen the rise of ‘pre-gaming’ or ‘pre-drinking’, although this has always occurred the poor economic conditions, increase in unemployment and generally lower disposable incomes have made it much more commonplace (one study found 64% of those observed pre-gamed considerably before going out) and a much bigger problem for bars and clubs. Despite the economic recovery and unemployment falling to 5.3% in July, which is nearly that of pre-recession levels, many people believe there have been lasting changes to capitalism as we know it and spending patterns have been overhauled, people have been left fearful and skeptical after the unexpected severity of the downturn and lots of people still aren’t feeling the effects of the recovery.

Pre-gaming and the ongoing lack of consumer confidence have had significant detrimental effects on the nightlife industry, an industry that is extremely susceptible to even the slightest recessionary pressure. As people are unwilling to spend as much money when socialising it has led to people going out later and later, often not until after midnight – a trend that was made popular by college students in college towns but has spread as these students have graduated and went home with socialising habits still intact!

It’s not just a case of going out late, we’ve moved on from arriving fashionably late to arriving fashionable drunk!

In some cases young people aren’t even going out to nightclubs, or at least they do so much less regularly than used to be the case. We are now in an era where the house party reigns supreme. One 25-year old female from Orlando, FL, told me cover charges were not too bad but when coupled with a few drinks, some food and a return taxi it often wasn’t worth leaving the house and nobody was ever willing to drive!

You may not have noticed any fall in revenue or you may just be glad to have survived the recession but there is massive amounts of lost revenue that you could be taking advantage of, if only you could get bodies inside your venue a bit earlier. For a 2,000 capacity venue, reaching capacity an hour earlier than usual could mean 2,000 people having at least one more drink that night. With a drink at about $8 each (and that’s the cheap end), that’s $16,000 more revenue for every night you’re open. If you’re open 3 nights a week, that’s a cool $2.5 million extra revenue per annum! Most clubs and venues will have staff in from the doors open anyway and as a labour intensive industry increasing revenue with little change to labour required will see you benefit from greater profit margins.

Clubs in states with laws which mean they have to close at 1am or in some cases earlier, suffer the most, as despite going home earlier people don’t go any earlier, meaning some nightclubs are going to have customers for less than 10 hours per week!

Venues in the UK, Ireland and America have used the glistrr platform and the wealth of useful data it provides to bring forward their peak door time and have seen the monetary rewards this brings. The Box nightclub, one of the longest surviving clubs in Belfast moved their peak door time forward by 38 minutes to 10:32 and had nearly 50% capacity before the door even was at it’s busiest (doors only open at 10pm!!!). Moving the door time was done through targeted social media marketing, offering incentives for people there before a certain time and using promoters who were tracked through the glistrr system.

Most venues that try to reduce their peak time offer free/cheaper entry or a free drink before a certain time, although this will get bodies in it can hurt them in the long-run. A study has shown that after receiving something for free, people’s likelihood to spend drops up to 50%! Instead the Event Experts at glistrr encourage their clients to offer special packages before a certain time, if entry is $10 then before 11pm offer entry, coat check and a drink for $15, people are thinking great value instead of cheap- this has a massive psychological effect! And this tactic has proved to be very successful. In a market where reputation and brand appearance are everything it is essential that every marketing decision made meets your short-term target AND that you are always building towards longevity and long-term success.

 

“There is a better way to do it-FIND IT.” 

-Thomas Edison

 

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