GOOD AS GOLD

0198roy1Michael Binstein (left), chief executive officer of Gold Standard Enterprises, with Brett Pontini, manager of one of the company’s Binny’s Beverage Depot superstores in Schaumberg, IL.

When Harold Binstein selected the name “Gold Standard” for his first store in 1949, the choice was prophetic.

From the beginning, his Chicago-area stores set high standards for liquor retailing, standards that he continually raised. In the 1950s, for example, Binstein was the first liquor retailer in the country to open a self-service store. It was at Gold Standard, in other words, that customers in the market for beverage alcohol were first able to browse and shop among aisles of products rather than place their orders, as if for a somewhat shameful commodity, at a counter.

And Binstein was one of the first beverage retailers to apply the superstore concept to his business. Indeed, Binstein first experimented with the idea of a large-size store back in 1976. But it was in 1993, when he opened his first Binny’s Beverage Depot, a 25,000-square-foot store, that his idea took off.

These days, Gold Standard Enterprises operates six Binny’s Beverage Depots, four Chalet Wine Shops (stores specializing in the sale of fine wines and gourmet foods) and four Gold Standards, all located in what the company terms “Chicagoland,” the city of Chicago and its suburbs. The company, which rings up total sales of approximately $60 million per year, is the third-largest independent beverage retailer in the country.

And, while Harold Binstein passed away in August of 1995, the business he started continues to grow and innovate under the guidance of Walter Fornek, Gold Standard Enterprise’s long-time president, and Michael Binstein, Harold’s son and now the chief executive officer of the company. Michael Binstein calls Binny’s, “America’s fastest-growing beverage superstore,” and plans for his company to have 25 of them running in the Chicago area, ringing up sales of $300 million annually, by the year 2002.

“We are in the midst of a giant transition, from the era of Gold Standard to the era of Binny’s,” said Binstein. “The Binny’s Beverage Depots are superstores for wine, spirits, beer and cigars. They are very high-volume and very large-format.”

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Binstein plans to have 25 Binny’s superstores operating in the greater Chicago area within five years.

The Binny’s Beverage Depots range in size from 15,000 to 30,000 square feet. They need that room for all the products they carry: more than 7,000 wines, more than 2,000 spirits brands and some 1,500 different beers.

These products run the gamut, “from $6 chardonnays to six-figure Bordeaux futures” and “from $6 vodkas to $6,000 cognacs,” as Binstein described it.

Binny’s is committed to offering low prices. But low prices, while important to customers, are not enough by themselves to create success. “Some retailers think that you just need cheap pricing,” said Brett Pontoni, a Binny’s Beverage Depot manager, “but we don’t view low prices as the motivating factor. You have to have them, but the true motivators are service and selection, the more human aspects.”

Binstein agreed that what sets Binny’s Beverage Depot apart from other superstores is its commitment to service as well as to price. “Binny’s is a blend of two concepts: Nordstrom and Wal-Mart,” he said. “The customer gets the everyday — and that’s important, the everyday — low prices and super selection of a Wal-Mart, but without sacrificing the service and style of a Nordstrom.”

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Binny’s manager Brett Pontini checks out the extensive inventory of cigars offered at the store.

This was the idea behind the concept from the beginning. When the first Binny’s opened back in 1993, Harold Binstein told the Chicago Tribune, “I thought about calling it a warehouse, but I realized I’m not a warehouse kind of guy.”

And his son feels there is no need to make customers choose between low prices and good service. “I think the American consumer has been sold a false bill of goods,” he said. “They’ve been conned into believing that they must choose between those two things. That is the big lie in American retailing. Our motto is that the consumer is entitled to the best of all worlds.”

THE BEST OF ALL WORLDS

So, how does Gold Standard Enterprises do it?

“We have the best team,” said Binstein. “We have the best operations, the best managers, the best wine consultants, the best buyers.”

The company has what Binstein described as its “brain trust,” a nucleus of long-term, knowledgeable employees. Among them are Barbara Herman, the company’s fine wine buyer. Herman, who has worked for Gold Standard since 1979 and is a member of the Beverage & Food Dynamics National Retailer Wine Panel, is a four-time winner of Geja’s Professional Wine Tasting Competition, a long-running and well-known contest held by a Chicago-area restaurant. Another is Brett Pontoni. Pontoni, who has managed Binny’s Beverage Depot stores since the first one opened four years ago, has an MBA and 10 years of experience in the industry.

And the company is committed to hiring, developing and retaining quality employees. “All of our people are home-grown,” said Binstein. “We have a Marine Corps philosophy: we’re looking for a few good men and women — and not everyone can cut it. We’re very choosy about who we hire, what positions we put them in and who gets promoted.”

The company as a whole employs approximately 250 people, with each superstore run by a staff of about 25.

Pontoni, who currently manages the Binny’s Beverage Depot in Schaumburg, IL, has a definite philosophy when it comes to hiring. “I hire on attitude,” he said. “The rest I can teach.”

The attitude he looks for? Simple, sincere friendliness. “Our customer service rests on acknowledging every single person who comes into the store,” he said. “It sounds very simple, but it all starts with saying ‘hello’ and smiling at the customer.”

Indeed, having genuinely friendly employees is so important to Pontoni that, he said, he has been known to run his store with fewer people than normal. “I’d just as soon do the work of an associate [the entry-level position in a Binny’s] myself than hire someone who is just going to be a warm body,” he explained.

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Massive eye-catching case displays dominate some of the wide aisles at Binny’s.

Once hired, a Binny’s associate goes through a basic orientation, learning about issues such as the company’s dress code (for associates, khakis or similar-quality pants, polo shirts with the store’s logo and name tags) and how to answer the phone (always identifying themselves by name). Every new employee starts as a cashier and then moves on to learning how to maintain the sales floor.

Indeed, said Pontoni, “There is no position in this company called ‘cashier.’ Everyone is cross-trained and cross-functional.”

And while Binny’s does not run formal classes for its employees, they are expected to take an active interest in learning about the products they sell. Industry publications, such as Beverage & Food Dynamics, are available in the stores — “And I expect them to at least glance through them,” said Pontoni of his employees — as are books on wines, spirits, beers and cigars.

Employees are encouraged to take classes, such as those taught at the Chicago Wine School, and are sometimes offered financial assistance for them. In addition, Pontoni sends his employees to trade events. “We are always a very, very strong presence at those,” he said.

While the labor market in the Chicago area is tight — Pontoni observed that the city’s unemployment rate at presstime was under 3% — Gold Standard Enterprises is able to find quality people because the company offers quality jobs. For instance, Gold Standard Enterprises offers its full-time employees a health plan without requiring them to make payments toward it. And the company offers paid vacations, two weeks for full-time employees and up to 20 hours a year for part-timers who work at least 20 hours a week, as well as a system of paid holidays.

“We pay better than anyone else, we expect more than anyone else and we get more than anyone else,” said Binstein.

The goal behind every aspect of Binny’s — from how employees act to how the stores are organized — is a superstore that “keeps the boutique or personal feel,” said Pontoni. On the one hand, the chain strives to appeal to the widest possible audience. “We don’t target a particular type of customer, like people in their 30s and 40s or people with a certain income,” said Pontoni. “We target everybody we can.”

On the other hand, the stores are run to give each of those customers individualized, personal service. For example, while the stores are set up for speed and volume, the checkouts (which average five per store) are partially partitioned off from each other to give customers a sense of privacy and special treatment as they are making their purchases. The checkouts “don’t feel like the ones at a grocery store,” said Pontoni. “Customers don’t feel like they are cattle.” Cashiers ask customers if they found everything they needed and how they would like their purchases packaged, while other employees offer to carry those packages out to their cars.

“When it comes to retailing, success is in the details,” said Binstein. And his company makes sure every one of those details is up to snuff.


Cheryl Ursin is a regular contributor to Beverage & Food Dynamics and Cheers magazines. Her writing has also appeared in the New York Times and other publications.


The New Standard-Bearer

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When Michael Binstein was 16 years old, his father, Harold Binstein, the founder of Gold Standard Enterprises, fired him for what Binstein admits was “spotty attendance.”

“And that was my only dabbling in the business,” said Binstein. Or it was, until 1995, when he returned home from Washington, DC, to help run the family business after his father’s death. Previously, he had worked with syndicated columnist Jack Anderson as an investigative reporter at The Washington Post.

Yet, there had always been a deep connection and respect between father and son. In 1993, Michael Binstein co-wrote a book about Charles Keating and the savings and loan scandal, called TrustMe (Random House, 1993). He dedicated the book to his father.

That same year, Harold Binstein opened a new kind of store — and named it Binny’s, after the nickname Jack Anderson had given to his son.

“My heart was in Chicago, and here was this business that my father had built from scratch starting in 1949,” said Binstein. “That’s the calling I heard in 1995.”

Binstein, who is now the chief executive officer of the company, has immersed himself in his new industry. “I’m still in what might be called freshman orientation, only mine has lasted more than a year,” he said. “I’m involving myself in as many facets of the business as possible and am learning from everybody in the company. There’s no one in the company who doesn’t have something to teach me.”

Binstein believes that his father would have approved. “My father would have told you until his dying day that he was always learning,” said Binstein. “That’s what made him the best.”


Doing Fine With Wine

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In an alcove devoted to quality wines, Binstein and Binny’s associate Jeannie Impastato examine a bottle.

What’s hot in the wine departments of the Gold Standard, Binny’s and Chalet Wine Shop stores?

“Anything that’s highly rated is gone in an instant,” said Barbara Herman, Gold Standard Enterprise’s fine wine buyer. Also, she reported, red wines in general continue to grow in popularity, in response to the media coverage of their possible health benefits. Other growing segments include Australian wines, “and California chardonnays, which are still unbelievably strong, especially the moderately priced ($10-$12) ones,” Herman said. Indeed, it’s not unusual to sell hundreds of cases of a particular chardonnay during the course of the year, she noted.

A wide range of customers flock to the company’s stores. “Some people are looking for everyday wines for under $10, while others are willing to pay $100 a bottle and they want all the wines that get 90-point ratings,” she explained.

The stores are designed with all types of wine customers in mind. Michael Binstein noted that Binny’s Beverage Depot has the Chicago area’s largest collection of allocated and reserve wines, such as those hard-to-get, highly rated ones, as well as the most extensive collection of great wine buys under $20.

How have customers’ attitudes changed through the years? Herman, who has been with Gold Standard Enterprises for almost two decades, sees many positive developments. “You see a lot more openness,” she said. “People have a great deal of curiosity about what they are drinking and are really receptive to experimenting and trying new things.”


Making Bigger Better

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When asked to describe the look of his Binny’s Beverage Depots, Michael Binstein said, “Think about what a Wal-Mart looks like. Now, visualize a Nordstrom. Now, fuse them together.”

Not easy to imagine, is it?

It’s even harder to do.

The look of the Binny’s Beverage Depot stores is a careful blend of size — huge stores displaying a huge number of products — and personality. While the stores are up to 30,000 square feet, their spaces are given a human scale. In some of the stores, for instance, the ceilings were lowered and decorative touches, such as track lighting, were added. “We wanted to temper the size factor with personality,” said Brett Pontoni, a Binny’s manager.

This balancing act can be tricky. For instance, in the main body of the store, the aisles are 10 feet wide to allow the easy flow of customers pushing shopping carts. “They look as wide as interstate highways,” joked Binstein. On the perimeters of the store, however, certain departments are set off in rooms and alcoves with a more intimate feel. The stores, for example, have separate temperature-controlled but customer-accessible rooms for their highest-end wines. They also have walk-in humidors for their cigar selections (some stores carry as many as 400 brands) and walk-in coolers, where beers are stocked by the case on palettes. Single bottles, six-packs and 12-packs of beer are also displayed in regular coolers, as are a number of wines, champagnes and other beverages.

Even in the main part of the store, products are placed with an eye toward the individual customer’s shopping experience. Barbara Herman, the company’s fine wine buyer, points to the huge wine selections available in the stores. The wines are organized by country, such as American, then by varietal. Then, within that, they are arranged by price. “A store may have a couple of hundred California chardonnays,” explained Herman, “and the bigger stores have long gondolas.”

The result of all these carefully made decisions? “Our customers consider Binny’s a shopping event, not just an errand,” said Michael Binstein. “This is our most treasured reward.”


A Tough Town

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The Chicago area is one of the hottest — and most competitive — markets for beverage alcohol. According to Adams Media research, Chicago is the number-one metropolitan area for distilled spirits consumption in the country and is the third largest for wine.

It is also home to some of the best beverage alcohol retailers in the country. In addition to the 14 stores owned by Gold Standard Enterprises, there are a number of other nationally recognized beverage alcohol retail operations, such as Sam’s and Schaefer’s.

“Whatever you’ve heard about the competitiveness in Chicago is true,” said Brett Pontoni. “Chicago is brutal.”

But Pontoni, like the rest of the Gold Standard Enterprises team, likes to see the silver lining. “We have extremely savvy consumers in Chicago. Not only do they know about the products but also about pricing: they know what something is worth,” he said.

The effect of all the competition for these tough customers? “It’s one of the major reasons we’re successful,” Pontoni said. “Every single edge helps.”


AD-vantageous

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When it comes to advertising, Gold Standard Enterprises uses a variety of tools. In addition to a regular series of radio spots and a weekly full-page ad in the Chicago Tribune, the company is about to launch its first commercial on cable TV.

But it is in the direct mail arena that the company really shines. It sends out both quarterly newsletters and monthly mailers to a mailing list of 100,000.

The passage of time can be a real advantage in ceating a direct mail program, explained Barbara Herman, Gold Standard Enterprise’s fine wine buyer. She pointed out that the company’s mailing list is made up entirely of customers who have voluntarily given their names and addresses to the company over the years.

The company’s mailers and newsletters have also had a chance to develop over time. “At first, our mailers were two pages long and full of typos,” Herman remembered. “They were terrible.” Now, the pieces average 20 to 30 pages and are far more professional looking. They are sprinkled with artwork, photos and quotes taken from product reviews and articles about the stores.

“It takes time to get established,” Herman said. “And you have to give customers time to understand what they’re getting. Now, our customers shop from our mailers.”

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