How to Survive the Wine Retail Business

Steps for success in a changing economy

I recently had the opportunity to sit down with several friends who work in retail stores here in New York City. Over the course of several days and a few long conversations, I began to think of their plight. Not only have they been fairly battered by the economic climate of the past several years, but they are constantly facing new challenges. Better Internet availability of wines, impending approval of wine in supermarkets, the need to keep up with social media’s demands (from maintaining a presence on Facebook and Twitter to rethinking in-store signage and advertising), all combine to make retail a bit of a scary place today.

I’ve put together a few thoughts on what retailers might want to consider while moving forward through 2012, but I’m also reaching out to all of you. I would love to hear what you think about the state of the retail wine business. What do you think forward-thinking retailers should be doing today to make sure their businesses are growing tomorrow?

And retailers, what can you do to help ensure your continued survival? The first point is so obvious that it can be easily forgotten.


1. Remember you are in the service business

Sounds obvious, right? But judging from my experience, this is not always the case. I’m sure many of you might respond that you are in the wine business, which while technically true is a meaningless diversion. Retail wine sales are, by definition, consumer facing commodity sales. Yes, part of that role is providing expertise, but I often see the very fundamentals of commerce being ignored. Like what? How about cleanliness, courtesy and respect?

It is that simple at its base. Keep a clean, well-organized store and consumers are likely to think more highly of you.

Treat customers with courtesy whether they are buying $5 or $500 worth of hooch. You really can’t judge a book by its cover, and I am walking proof of that!

And respect my intelligence, please. I know what corked wine is, and even cooked wine, but I do recognize that many consumers don’t. When those consumers want to return a bottle, it is often because they don’t like it, not because of the defect they claim to detect. We know that, but what I also know from my years in retail is that a minuscule percentage of wine actually gets returned. How little? In my experience, somewhere between one-tenth and four-tenths of a percent.

That is still a lot of money, thousands of dollars on each million in sales, but you should take the hit. Not because of the people who don’t know what corked wine is, but because of the people who do! Treat the wine lovers and wine geeks well and they will not only return but will spread the word about your policy and attitude towards them. I’ve been on the receiving end of both good and bad publicity, there is no doubt which I’d rather see.