The new rules of wine retail

From the perspective of a retail wine & liquor buyer, the competitive landscape is getting more difficult by the day. That means your business model needs to be updated to keep up with these changes. Based on my experience I will share five fundamental rules that should be the cornerstone of your business model:

Rule #1The SKUs that will make you money won’t sell themselves

When coming up with the perfect product mix (as measured by wine SKUs), retail wine & liquor stores have a choice between the big national brands that most customers recognize, and then all the smaller, artisanal brands without national distribution. While the conventional wisdom is that these national brands are the key to success, the reality is that these national brands will always limit you. The margin of error is just too small. So it pays to focus on the smaller brands. Since customers won’t recognize them, it’s up to the sales staff to become activists in their approach, and for this sales team must be motivated continuously. Without this proactive approach to selling, customers will simply move on.

Rule #2: Smaller artisanal brands will generate your gross profit

Once you’ve realized that the best-selling SKUs can’t be relied upon as your sole source of profit, you will need to turn your attention to the smaller, artisanal brands. You simply need to develop the sales smart within the retail store to service customers including learning the stories behind these smaller brands. Remember, Service = Sales. If you aren’t providing a service, then you won’t be selling.

Rule #3: Customers are getting savvier about the wines & liquors available

At a time when wine SKUs are proliferating and customers are becoming savvier, it’s only opening up more opportunities for retail sales staff to talk with these customers. Understand their needs, interests, and desires and that will help you find the right wine and or liquor to keep them coming back for more.

Rule #4: Get out in front of marketing conversations

The reality today is that marketing shapes public opinion. That leaves retail wine & liquor stores with two options – either ignore all the conversations that people are having on social media or find a way to participate in these conversations.

Rule #5: Track your daily sales

If you manage your daily sales figure, then your monthly, quarterly or annual figures will take care of themselves. Thus, as a retail wine & liquor store owner, you really need to track sales metrics on a daily basis.

Practical advice for selling more wine to more customers

1. Be consistent

Customers need to know that you are always there for them. So commit to a regular schedule of communication with them, whether it is once a day, once a week or once a month.

2. Price matters

The key is to provide customers a price that is both fair and aggressive. There are so many tools available today that it’s impossible to keep customers from going elsewhere if you don’t offer a competitive price.

3. Kick down a door, stand on a table

When it comes to getting the best possible products for your customers, you have to get noticed by suppliers. Don’t be afraid to advocate for certain products if customers are asking for them.

4. Be bold, get graphics and stand out

We live in a world of noise. Customers are probably bombarded by email offers from a variety of merchants. So you need to find a way to stand out.

5. Know your customers

Understand who your customer is, both individually and within different demographic groupings. What are they really looking for?

6. Sell what they want

Know the product you’re selling and don’t try to push off lower-quality, unpopular or out-of-favor wines and or liquors on customers in the hopes they won’t notice. Only buy what you can sell.

7. Look for new opportunities

There is always room for experimentation. This might apply to vintage, location, and inventory. This is true both for wine stores that sell $200 bottles and wine stores that sell $10 bottles.

8. Data drives sales

Know what people buy. The way you do this is via data. In fact, data will help you create a hit list of wines and liquors you should be buying. The data will help you detect new trends just as they are forming.

Putting all this together, your retail wine & liquor store will take a closer look at what you are actually selling not what you wish to sell.

Final Advice

At the end of the day, it’s all about relationships. If you have strong relationships with customers, they will decide to buy from you. But that also requires a bit of effort on the part of the retail store staff – they need to be constantly looking for new and interesting products for their customers, and they need to be taking advantage of new tools and platforms – such as data and social media – to turn their hunches and gut instincts into real, tangible business ideas.

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