Still Smiling at Happy Harry’s

The real Happy Harry, Harry ‘€œHappy’€ Gershman, who opened his first liquor store in Grand Forks, ND in 1944, would, if he could see the family business now, be ecstatic. Also, astounded.

Happy Harry’€™s Bottle Shops have been run by Harry Gershman’€™s son Hal since 1976. In 1990, Gershman opened a second store, this one in Fargo. In 1993, he opened a second Grand Forks location. And in 2000, he opened an additional store in Fargo, for a total of four stores.

And what stores they are. Although they’€™ve always been good-looking, over the last four years, Gershman has spent over $2 million renovating them all. Each store is now about 16,000 square feet in size.

And they are striking to look at. Three of the four are built in a style known as Prairie Architecture. They are built to look like the barns and grain silos of North Dakota. (The fourth store, in North Fargo, while large and well-appointed on the inside, is located in a strip mall.)

‘€œWe used triple grade A cedar ‘€“ 250,000 linear feet of it ‘€“ in our stores, inside and out,’€ said Gershman. On the outside of the three stores, the cedar takes the form of red-stained clapboards ‘€“ ‘€œThe real McCoy,’€ Gershman said — and is joined by fieldstone, the same materials traditional barns were built of.

Inside, the barns boast 30-foot ceilings, cedar woodwork and custom-made white-oak wine racks. ‘€œI just believe in having a very dramatic, clean physical plant,’€ said Gershman. ‘€œThis architecture speaks to our customers; they respond to it.’€

Even more important to Gershman than how the stores look is how they ‘€œfeel’€ to customers. The stores have ‘€œlow profiles;’€ all the shelving is kept purposely low so that customers can always see the whole store. And every aisle is at least five feet wide. ‘€œPeople don’€™t like to ‘€˜butt-brush’€™ products or other people,’€ said Gershman. ‘€œOur customers don’€™t feel hemmed in.’€

Happy Harry’€™s customers also feel pretty. Gershman invested extra money in the stores’€™ lighting, going with 3500 K fluorescent lights with a rose tint. ‘€œThe light is much brighter and much warmer than ordinary lighting,’€ he explained. ‘€œBoth people and products look better.’€

Dustin Mitzel, Happy Harry’€™s general manager, calls it ‘€œthe Happy Harry feel.’€ All four stores are ‘€œnice, clean, well-lit, low-profile stores,’€ he said. ‘€œHal puts a lot of money and energy into the physical plants of the stores, to make them more customer-friendly and to show the products better.’€

Extensive Product Selection

And what a selection. Happy Harry’€™s Bottle Shops carry extensive collections of spirits, wine and beer. Beer alone, the top-selling beverage type for the stores, is represented by about 600 different products.

With the largest selection of beer, wine and spirits between Minneapolis and Seattle, the stores draw customers from all over North Dakota as well as from as far away as Winnipeg, the Canadian city two hours to the north.

‘€œIf you’€™re looking for a very fine wine, you come to see us. If you’€™re looking for a popular-priced wine, you come to see us. Ports and sherries, single malts, bourbons, brandies and cognacs: people know we have it all; our selections rival those of stores in any major market. We have the best selection and we also have the best prices. We won’€™t be undersold,’€ said Gershman.

Happy Harry’€™s Bottle Shops also sell snack food. ‘€œWe do a very significant business in candy,’€ explained Gershman, ‘€œand we sell things like frozen pizza.’€

Every store also has a tobacco department equipped with a walk-in humidor. ‘€œWe’€™re one of the few retailers, of any type, in the state that have premium ‘€“ or any ‘€“ cigars,’€ said Gershman. In addition to cigars, Happy Harry’€™s also sells pipe tobacco. ‘€œWe’€™ll even make custom blends [of pipe tobacco] for customers,’€ Gershman noted.

Business Up Over 10%

Even in the current national economic conditions, Happy Harry’€™s is doing well. Gershman reports that business is up more than 10% this year over last. Part of that, he explained, is that North Dakota is not in as bad economic shape as other parts of the country. ‘€œNorth Dakota is an anomaly in that it has a budget surplus,’€ he explained.

Dustin Mitzel, general manager, sees some change in customer behavior because of the economy ‘€“ but some of those changes actually work to the benefit of off-premise retailers. ‘€œWe see more people entertaining at home, which is probably happening throughout the country,’€ he said. ‘€œRather than go out to a bar or restaurant, people are coming here, with their recipes from the Food Network in hand, and shopping our stores for an experience at home.’€

Beer sales, especially in the craft and imported segments, have, in particular, been growing for Happy Harry’€™s. ‘€œPeople are interested in flavor and in experimenting,’€ said Gershman.

Hal Gershman sums up his business philosophy by quoting his father. ‘€œHe always said, ‘€˜Every customer is our best customer,’€™’€ said Gershman. ‘€œIt doesn’€™t matter whether you come in to buy a pack of cigarettes or a thousand dollars worth of wine, we’€™re going to treat you well.’€

‘€œHappy Harry’€™s Guarantee’€

One important aspect of Happy Harry’€™s customer service is its ‘€œHappy Harry’€™s Wine Guarantee,’€ (which also covers beer and spirits.) ‘€œBasically, whether it’€™s a $40 bottle of wine or a $3 bottle, if you bring it back and say, ‘€˜I just didn’€™t like it,’€™ we will replace it or give you your money back,’€ said Gershman. ‘€œAnd we never question the customer.’€ As the stores’€™ website (www.happy-harrys.com) explains it, the Wine Guarantee ‘€œmeans you never have to worry about your wine purchases again.’€ Having that assurance means that customers are more comfortable trying new things, including things suggested to them by the store staff. It helps establish a feeling of trust. ‘€œAnd we look at customers, not as somebody who’€™s going to come in one or two times, but as a lifetime customer,’€ said Gershman.

Another nice touch at Happy Harry’€™s is that employees carry customers’€™ purchases out to their cars. ‘€œIt’€™s full, complete service,’€ said Mitzel. ‘€œIt sets the tone and makes us different from any other retailer.’€

The most important factor in his stores’€™ customer service, Gershman says, is, of course, his employees. As he declares on the website, ‘€œI am always complimented on the fine service our customers receive at Happy Harry’€™s Bottle Shops. The credit goes to our great staff and management. Their interest in making our customers happy is why we are nationally recognized as one of America’€™s best. So, do we have an ‘€˜employee of the month’€™ program? You bet we do! Every employee, every day, every month.’€

Hiring Right

It begins, Gershman says, by hiring the right people. Gershman says he is fortunate in that he has a large community of potentially top-notch part-time employees to choose from: students from the colleges and universities in and around Grand Forks and Fargo. Indeed, Dustin Mitzel, general manager of the whole operation, was one. He started with Happy Harry’€™s as a part-timer back in 1996 when he was a student at the University of North Dakota.

Likewise, many members of Gershman’€™s core management team started as college students working at the stores part-time. Greg Rixen, manager of both the Grand Forks locations, was also a student at the University of North Dakota when he started with the company in 1996. Brian Frank, store manager at the South Fargo store started in 1997 while a student at Moorhead State University, in nearby Moorhead, MN. Nate Honrath, the operations manager in Fargo, who started in 2001, and Aaron Jansen, who started in 2004 and is now the South Grand Forks store manager, both began working at Happy Harry’€™s while studying at North Dakota State University.

Gershman’€™s core team is rounded out by Brian Olson, North Fargo store manager, who started with the company in 1997, with 18 years of experience working in the bar and bowling industry, and by Thomas Pankratz, North Grand Forks store manager, who came to Happy Harry’€™s in 2004 right after attending Mankato State University in Minnesota.

These seven managers are, Gershman said, ‘€œbetter at what they do than I was at my prime. They are natural retailers: hard-working, honest and decent.’€

When it comes to new employees, Gershman continues, hiring good people is only the first step. ‘€œNobody can do a good job unless they know what a good job looks like,’€ he said. Education is key. Gershman starts by making sure his new employees know what good customer service looks like: how to talk to customers, how to treat them, ‘€œpretty simple stuff, really, it can be as simple as a smile,’€ he explained.

Gershman is serious about treating customers well. When an employee was recently sarcastic to someone who came into a store and asked to use the phone, ‘€œwe verified that it happened and then [that employee] was gone,’€ he said.

‘€œBut the same goes for customers. If a customer is abusive to our staff, we ask them never to shop with us again,’€ he continued. ‘€œI tell my people, ‘€˜Your job description does not include taking abuse.’€™’€

Gershman makes sure his employees are well-treated in other ways. ‘€œWe think we pay pretty well, we have a 401K plan that part-timers can participate in too, and last November/December, we increased our healthcare coverage. It includes vision care and short-term disability and the co-pay is now lower. A lot of businesses are not doing that,’€ he said.

Product Knowledge Training

The second phase of employee education ‘€“ product knowledge ‘€“ is also valuable. Happy Harry’€™s employees go through mandatory, paid product knowledge training. ‘€œThis is good for their future careers, even if it is just they’€™re at a business dinner and they know how to order wine. I get lots of letters from former employees telling me that,’€ said Gershman.

Happy Harry’€™s employees are also well-rounded. While three of the operation’€™s 70-odd employees work in the business office, the rest all work in the stores ‘€“ and every store employee does everything. ‘€œAnd that’€™s good,’€ said Mitzel. ‘€œWhen you do everything, you learn the store completely. Spending ten minutes a day on something can make anyone an expert.’€ One result of that management philosophy: any employee a customer approaches with a question can help.

When it comes to interpersonal relationships, Gershman is as concerned with the quality of his relationships with suppliers and distributors as he is with any others. ‘€œA lot of the time, the relationship between retailers and their suppliers is adversarial,’€ he noted. ‘€œWe invite ours and their spouses to our Christmas party.’€ Mitzel added, ‘€œOur relationships are always professional, but we consider them our friends.’€

Getting The Word Out

Last year, Happy Harry’€™s held its first beer fest. It was an outdoor event, featuring 150 different beers as well as food, such as hamburgers, bratwurst and pretzels. Gershman and his staff were surprised at the response. ‘€œWhen we opened the gate at 3 o’€™clock, there were 1,000 people lined up to get in,’€ Gershman said. He estimated that a total of 3,000 people attended this first beer fest.

Needless to say, Happy Harry’€™s will be holding another one this year. Actually, two: one in Fargo and one in Grand Forks. And they will be bigger and better than last year’€™s. ‘€œWe’€™re going to have four check-ins at them this time, rather than two,’€ said Gershman. ‘€œAnd each one will have a major local band performing.’€

Gershman is a big believer in special events.

Every year, Happy Harry’€™s is a dominant participant in a ‘€œTaste of the Holidays’€ event held in a nearby convention center in conjunction with Clear Channel Radio. People pay $10 to attend. They try foods prepared by a number of local restaurants and they also can taste 60 to 80 different wines brought in by Happy Harry’€™s. ‘€œThe first 1,000 attendees get a glass etched with our Happy Harry’€™s logo,’€ added Gershman.

Happy Harry’€™s sponsors or co-sponsors more than 40 charity events every year. ‘€œWe do a lot of different events, for the symphony, for jazz groups, arts groups, alumni groups, for the YWCA. We did an event where we charged $25 per ticket for the Humane Society. And the one I am most proud of: we did a dinner with the master distiller of Woodford Reserve bourbon (from Brown-Forman) in March that raised over $10,000 for the local chapter of the Red Cross,’€ said Mitzel.

Happy Harry’€™s managers not only teach the general public about beverages in the stores and through tastings and dinners. Some of them teach beverage classes for the culinary and hospitality programs at nearby universities and colleges. And Greg Rixen, the manager of both of the Happy Harry’€™s in Grand Forks, has been a regular on the 5 o’€™clock news broadcast for a local channel, WDAZ Channel 8. He has done segments profiling different wineries and breweries as well as one, back in February, on pairing wines with Valentine’€™s Day sweets, such as chocolate-covered strawberries and red velvet cake.

Happy Harry’€™s is also continuing to reach out to its customers via the internet. The operation has long had a website, though it does not accept orders through it. (Happy Harry’€™s cannot legally ship out of state.) ‘€œAnd we are looking to re-do our website, to make it more vital and exciting,’€ said Gershman.

Happy Harry’€™s does not send a lot of emails to its customers, Gershman says, though it mentions its ‘€œirregular, non-weekly, occasional-but-always-compelling Happy Harry’s email newsletter’€ on its website. ‘€œYou have to be very careful with email blasts,’€ said Gershman. ‘€œWe make sure that we only send them for real news. We don’€™t want to be bothersome to our customers.’€ Happy Harry’€™s limits its emails to announcements of things such as winemaker dinners and special promotions.

Using Facebook

For Happy Harry’€™s, the real developments in marketing have been in the use of social media, specifically Facebook, which it started using last fall. ‘€œIt’€™s a whole different way, a fun and innovative way, to reach customers,’€ said Mitzel, ‘€œbut we don’€™t try to use it as a direct sales tool.’€ The Happy Harry’€™s Facebook page does list the stores’€™ different events and sales. But managers will also post questions like ‘€œWhat’€™s on the menu for Easter?’€ or ‘€œWhat’€™s on the wish list for Christmas?’€ or ‘€œWhat’€™s better: wine or beer?’€ ‘€œAnd we’€™ll get 25 comments from customers,’€ said Mitzel. In addition, customers have begun asking questions through Facebook, about whether the stores carry a certain beer, for instance, and Happy Harry’€™s staff will answer them. After just a few months, Happy Harry’€™s has over 1,800 fans on Facebook and about 100 followers on Twitter, which it has just started to use.

That is not to say that Happy Harry’€™s is abandoning more traditional forms of advertising. The operation plans to unveil new television commercials and a new jingle in the next year. ‘€œCable television is very efficient because you can target the audiences you’€™re reaching so much,’€ said Gershman, ‘€œand our newspapers advertisements continue to be relatively successful, maybe for older customers, though in other markets, retailers are moving away from newspaper ads.’€

Perhaps Happy Harry’€™s is such a happy place because Hal Gershman is always striving to make it better. ‘€œHe’€™s always trying to improve,’€ continued Mitzel. ‘€œMaybe I’€™m biased, but I think you don’€™t often see a business owner still so excited. Hal still loves the business, still has a passion for it, is always energized and never wants to settle.’€

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