Posted on | December 30, 2013
Written by | Roger Morris
If, when the ball descended in Times Square to usher in the 21st century on January 1st, 2000, you owned or managed a retail beverage business, you know firsthand how much the business landscape has changed during the first decade-plus of the new century.
The offerings in spirits, wines and beers have exploded in number and diversity. Competition has gotten bigger, broader and more intense. If you haven’t seen changes in state and local regulations, then you’re one of the lucky ones. Moreover, the typical customer in 2014 is not the typical customer who walked through your door in 1999. Most of all, you and your business have changed in many ways—or you wouldn’t still be here. And, of course, you still face many challenges of changes as you enter 2014.
“I see retail sales as being evolutionary,” says Richard Kinssies, who owns Greenlake Wine and the Wine Outlet in Seattle, WA. “You need to keep finding ways to adapt, or you get left behind.” His particular challenge, he says, is finding ways to compete against grocery store wine sales. “I have the attitude that I will learn each year to do what I do well even better,” he reasons.
So we asked a range of wine and spirits merchants what they planned to do, or do more of, in the new year to improve their business numbers and to better service their customer base. Here’s what they told us about their New Year’s Resolutions, circa 2014:
1 Work the deals.
Kinssies, who has been in the wine business as a merchant, writer and sommelier for 40 years, takes advantage of his broad base of contacts he has built up with importers and distributors. “I deal a lot with one importer who sometimes will buy a pallet or two too many of a particular wine,” Kinssies says, “which he can afford to sell it to me at a reduced rate. Recently I had a great $30 bottle of wine that I could sell to my customers for $19 a bottle.” Kinssies has trained his customers to come to his stores looking for bargains on quality wines rather than for, say, mass-produced, cheaper wines available in groceries.
2 Get customers more involved.
The more your customers identify with your store, the more likely they are to be loyal and to increase their spending there. For example, many stores have displays of wines or beers that the store staff recommends. But Gary Burhop of Great Wines of Memphis asked, why not feature customer picks as well? “I want to focus more in the coming year on customer involvement and ‘hands-on’ education,” he vows. One way is to expand his store’s program of blind wine tastings for consumers on Saturdays. “We ask customers to vote for the wines they like best,” Burhop says, “then we tally the votes and build a display of their ‘picks’ near the entry.”
3 Get to know the sources of inventory personally.
Much of retail store merchandising is hand-selling to strike a bond with new customers and to keep old ones engaged. And you can hand-sell better—and more enthusiastically—if you know first-hand where the wine was produced, perhaps even who produced it. Steve Golueke, owner of Cranbrook Liquors in Cockeysville, MD, recently went on a trip with customers to Alsace. “I never knew that much about Alsace,” he says, “but now I know I’ll stock more Alsace wines and sell more of them. It was the same when I went to taste Oregon Pinot Noirs.”
4 Keep ahead of the curve with what’s hot.
Several retailers report they follow trade publications such as Beverage Media to keep current with trends in wine, spirits and beers. One East Coast store owner comments, “I’m opening sub-sections of European wines from regions that 10 years ago I might have carried two or three bottles.” Retailers’ biggest challenge, they say, is keeping up with the deluge of American artisan spirits—especially whiskies—which means in some cases reducing shelf space for established brands. And some retailers who specialize in craft beers now offer growler-dispensing services for popular local brands.
5 Be more imaginative in expanding the customer base.
Theresa Rogers Matthews of Horseneck Wine & Liquors in Greenwich, CT, says, “We are presenting wine and cheese events at the store for the real-estate community once a month, and we are working with charities for wine tastings and sales.”
6 Engage customers where they live,—literally.
Of course, you want customers to come into your shop, but sometimes you have to meet them halfway. Most retail shops on Martha’s Vineyard, for example, have free home delivery for any sizable phone-in order. Frank Pagliaro of Franks Wine in Wilmington, DE, takes the home-service concept one step further. “I’m expanding in the coming year my ‘FranksWine@Home’ tastings program,” he says, referring to his service that customizes tastings for personal home events such as poker nights, book club parties, co-ed engagement parties and small charity fundraisers. Prices start at $240 for a three-hour wine tasting for 12—including the wine.
7 Turn displays that only show products into displays that also sell products.
While price is always a paramount attraction for in-store displays, customers must first be interested in the product before they consider price. Ask yourself if your displays would tempt you to buy your own products. “I want to have more clever windows this year,” vows Teresa Rogers Matthews at Horseneck.
8 Never give up on bigger margins.
Even if your store hums on high volumes at bargain prices, you can still fatten up your margins on exclusive merchandise and special deals. Just because you can sell it cheaply doesn’t mean you have to.
9 Sprucing up a store can make shoppers linger longer,
and possibly spend more and return more often. Consider updating your paint, flooring, lighting—or simply signage.
10 In-store tastings are becoming more and more popular.
Give your wines an edge by offering cheese. As the French like to say: When buying wine, eat bread; when selling wine, serve cheese.
11 Many retailers are embracing the multiplier effect of social media,
not only to publicize special offers, but also to communicate the store’s personality and simply to make it easier for customers to tell friends about their stores and their products.
12 Wines become discontinued in distribution for all sorts of reasons that have nothing to do with their quality.
Pay attention to monthly distributor close-outs for one-time deals that can generate profits for weeks.
13 Wine and spirits aficionados are using the internet more and more.
Make it easier for customers to see what you carry by making sure your online inventory is up to date. You can also offer more than you have in stock by including “virtual” inventory that can be ordered.