Wednesday, September 22, 2010

You can't discount optimism

In a counterpoint to my last blog post about the "Dinosaurs of Retail", I'd like to call attention to a new species of retailer: The one that succeeds because they don't know any better.

The old guard and conventional wisdom of the wine world have a way of suppressing even the most rampant wide eyed enthusiasm. As times have changed, the merchants that prospered during the 80's and 90's became cynical as their market changed. Once in a while, you come across a retailer that hasn't been jaded, one that doesn't realize that times have changed. The state of the business today is the only reality many of them have ever know. This gives them a huge leg up on the competition. They haven't fallen victim to conventional wisdom yet, and as a result, they are discovering the new boundaries of where our market is.

Consumers haven't stopped buying wines that cost hundreds of dollars, though, that market surely has diminished. The new guard, just discovering some of the world's best wines, are coming up with creative ways to turn consumers on to them. I am now seeing break-even tastings featuring wines worth hundreds of dollars. More people will pay $25 for a 2 oz pour of Chave or a "la la" than you would expect. The rare chance to try one of these wines may be enough to turn someone into a collector. The amazing correlation to all of this of course is the decreased reliance on the Ratings Rags.

Veterans of the industry are quick to dismiss what this new breed is doing. I just can't see why they would want to squelch this approach. It seems like telling a tightrope walker to "look down". My message to them, don't trust the old guard, you're doing great.

Monday, September 20, 2010

The dinosaurs of retail

It seems that no matter where you are in this country, you can always find a dusty, tired, sad, dark, cold wine shop, that is run by a crusty guy that laments on how much better things used to be. As much as the economy hasn't been all that great as of late (you may have heard this), every indicator suggests that the wine industry is very healthy, specifically in the consumer sales growth department. Some speculate that fine wines (over $20 retail) sales, growth has eclipsed 10% for more than 12 out of the last 13 years.

So why do so many veterans think the wine industry used to be so much better? The easy answer is-It's changed, and they haven't. There was a time, not that long ago, when big corporations would send a peon into their local wine shop (the aforementioned dirty dusty archetype of what a wine shop was perceived to have been) to purchase a dozen cases of overpriced, brand name Napa Cab for their 100 or so best clients. They did this a couple times a year, and was repeated by many companies. Imagine how easy those sales were. No inventorying, just clearing at a 30% markup. Thank you and thank you. This was enough business to sustain the other 10 or so months of the year when business came in the door in a trickle. Frankly, the buyers at these shops didn't feel obligated to be all that nice to the novice wine buyers that require a lot of attention for a 1 or 2 bottle purchase.

Flash Forward 10 years, what has changed? The expense accounts have disappeared and the wine buying public has been replaced by the 25-34 demographic. They grew up in the age of Urban Outfitters and The Gap. They like bright eyed wine shop owners with ample lighting and clean shelves. They also like knowledgeable friendly wine shops that have enthusiasm and patience. If they aren't catering to the novice and hosting great in-store tastings, they're just waiting to go extinct, like the gaudy expense accounts that their business was based on.

Friday, September 17, 2010

Your first wine list sucked, Sorry, but it did.

I was in an account earlier this week, where the buyer had just taken over from a waiter that was handling the wine list. The new buyer was a pretty savvy guy that clearly knew what he was doing. He and the sales rep I was with were having a pretty hearty laugh at the current wine list. I immediately sympathized with the former buyer. The list was chock full of classic rookie foibles. It was a wasteland of Cakebread, Chalk Hill, Sonoma Cutrer, Banfi and Jadot. Clearly the big guys had gotten to him. Thing is, it looked an awful lot like the first wine list I wrote, and the wine list that seems to repeat itself over and over. Odds are, if you've ever written a wine list, your first one sucked too.
The above mentioned wines are fine on an educated buyer's wine list. They can often give safe harbor for the intimidated customer and can be used to fill specific needs. This guy had no idea the interplay between all of these mainstream selections. They are all safe harbors, playing it safe turns the wine list into a grocery store aisle. Rookie buyers need to be able to write a list, no matter how bad it is. They will learn. I remember thinking when I was writing my first few lists "I hope I don't make an ass out of myself on this one". The poor waiter whose list they were cracking hard on was written as a safety move, the catch 22 is, he didn't know enough about wine to write a good list yet. Damned either way.
How do they get better? Simple. It's up to us to educate the rookie. Not with propaganda, but with interesting and diverse samples. It's our responsibility to show rookies wine, even if it makes no sense in their establishment. Not for them to buy, but to help them expand their horizons. Help them figure out their palate, and what works for them. In our world, their is nothing more rewarding than putting together the best wine list of your life, and that's usually each subsequent one after the first.

Monday, September 13, 2010

Kings of the 4-day work week

"Wine sales", as was once told to me by a mentor, "is the hardest business to be great in, but the easiest to be bad in". What he was getting at, of course, is the impossibility of accounting for a sales rep's time. It's pretty easy to do the bare minimum, work a modified cherry account run, and still earn a buck. As managers, we assume they are diligently seeing all of their accounts, giving solid presentations, volunteering for events, and generally being accountable. The reality is, we have no real way to know on a day to day basis what is going on out there. There are plenty of companies that try to make them submit plans for the day ahead, or for the previous week, but no one ever really double checks.
What has eventually happened, is the entire day of Friday has been largely written off as a selling day. There are usually no deliveries on the next business day (Monday), and it has become culturally acceptable to be creative with this time. This is the most common day for sales meetings, sometimes requiring many hours in the car to and from. Often the time is utilized for end of week paperwork, and emergency weekend deliveries. What if this time were used to sell wine? What if you were to take a bag of samples out, say, 2 Fridays a month?
There are a number of reasons beyond the cynical that we don't really work the market on Fridays. Many retailers are busy getting ready for the weekend, ditto restaurants. But what if you are likely the only rep out there on Friday, and you have an appointment? You will get a better crack at an uninterrupted presentation than if there are 4 reps lined up behind you. If you are well regarded by your accounts, they may even welcome the diversion. Each account is a little different, so Friday's need to be handled carefully. This presents an opportunity to be better than good enough, and certainly better than the majority of your competitors.

Saturday, September 4, 2010

Jealous Much?

Never waste jealousy on a real man: it is the imaginary man that supplants us all in the long run. ~George Bernard Shaw

As of late, I have run into a tremendous amount of distrust amongst distributors. Since I am no longer a distributor, I have really been seeing it through different eyes. Perhaps naively, I put together a company that wasn't too closely linked to just one distributor, but instead diversified among a handful of superior companies. I assumed that when it came to the issue of reps seeing me on the streets with their competitors, it wouldn't be a big deal. In some cases I was right, but in many cases I was wrong. Without really getting into the gory details, I'll just say that as I am having increased success, my distributors are wondering which distributor my priorities are with. The reality is, my priority is with my winery clients. But I definitely give attention to the companies that reply to emails and phone calls. There's plenty of me to go around, just utilize me! I don't prefer one distributor over another. They are all my partners, and I sincerely want them all to succeed.
This all may speak to a deeper issue. One that isn't discussed very often. The real competitiveness of many distributors. As times have gotten tougher, I see distributors fighting each other more and more. I see maneuvering, and dirty tricks more than ever. Maybe I'm a "great society" type that says that if distributors put together great portfolios, strong training, are honest and help accountable, then attrition will take care of everything. This is all of a sudden, a very cutthroat industry at an equally cutthroat time. Everyone just needs to chill out a bit. The reality check should be that you aren't competing for just one placement. Buyers will stock their stores with as many items that a) make sense b) you give great presentations to c) fit what they need at that price. Notice how those 3 factors do not include your competitors. The truth is, you are the biggest variable, you can't worry about your competitor if you're not taking care of your other business. It's like being competitive with the weather.