How To Survive The Wine Retail Business

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.

2. Talk to your customers

This is treading more into the social media end of things, which is still a giant time-sucking black hole if you ask me. We're all desperately involved in social media, not so much because it pays such big returns, but because we're afraid of missing the boat in case it does.

You have a finite amount of time in your day, so how much time should you spend on social media and what should you be doing? Simply stated, as much time as it takes to build up your audience. If you don't have much of an audience, then it doesn't really matter how much time you spend working your social media strategy because no one will be listening.

That brings us to the crux of the situation. To both attract and engage customers you have to provide value to them. Don't think of social media as an advertising or marketing channel, think of it as an educational and enjoyment channel. I'm not saying that you shouldn't use social channels to promote your store, sales and events, quite the contrary in fact since each of those could be a perceived benefit to your customers, but that cannot be the totality of your messaging.

Let people know where you've had a great meal or food and wine pairing lately. Set up a time to answer questions, either virtually or in the store, about the basics of wine. Virtual Q&A is a great tool since it allows those who might be embarrassed by their questions to ask them in relative anonymity. Give your social channels a personality, be responsive and make sure you get involved with other social channels my commenting, liking and interacting.

This is all a strategy to win friends and fans, who eventually turn into brand advocates. The bigger your base, the broader your reach. All of a sudden you're recommendations are being broadcast not only to your group of fans, but to their's as well. If there's one thing I know for sure, it is that many of those wine geeky enough to follow a wine business's thread, feed, or page are looked upon as "the wine guy or gal" in their personal circles. That's the way to build up your audience and reach, organically.


3. Do something to get attention

This is something that has been kicking around inside my head for years, since cellphones first had cameras and I saw people take pictures of bottles and shelf talkers in the store.

Today, those pictures can get plastered across the web instantaneously, on peoples Facebook and Pinterest pages, or Flickr feeds.

I always thought it would be good idea to be outlandish enough to make people stop and take a picture of an in-store ad or display. Something that they would want to share with their friends, and yet was clearly branded by the store. I'm no longer in retail so I haven't given enough thought to this idea lately to come up with some concrete examples, but with the explosive growth of Pinterest lately, you can see the writing on the wall.

We are moving from a text-based world to a visual-based world. Icons and badges have replaced words. QR codes have tried to do the same, though with limited success seeing as they were very much a transitional step. Today, images get the most traction in social media. People love them, and are quick to post and convey so much so quickly.

This is bound to be the next frontier. Getting people to take and share images of your displays, events and advertising could be big, even though I know we're not quite there yet. So that brings me back to the beginning. While I'm hoping to offer some thoughts here to help stimulate this discussion, what I'm really looking for are your ideas.

— Gregory Dal Piaz, Snooth