Taking It To The Max

For most wine and spirit retailers, adjusting to today’s high-tech world might mean adding an off-the-shelf electronic kiosk with a wine-and-food pairing program; or maybe incorporating into the store design electronic shelf tags that allow more efficient price management; or perhaps creating a robust e-mail newsletter promotional campaign. In other words, important but nonessential tweaks added to the retail mix.

But for Maximum Beverage in West Hartford, CT, technology isn’t an adjunct but instead at the core of its retailing philosophy.

Take the array of about 20 electronic sensors owner Brian Whitney has installed in the aisles throughout the store. Those sensors tell him where people head after they walk into the store, which aisles they travel the most, how long customers linger at any one spot, even the length of time the average customer shops here. (That would be 17 minutes, by the way.)

“With these sensors, we track how many people come into the store, whether they turn left or right, which displays and end-caps they stop at and how long they stay there,” says Whitney. “We have real intelligence on what our shoppers are doing in our monthly report. If they walk in front of an end-cap, we can tell if they walk by or stop, and how long they stop there and if they pick up a bottle from the shelf.”

Actual Customer Behavior

“I think most retailers believe they know their shoppers and how they use their stores, but we learned they probably actually don’t. For instance, we thought for sure our shoppers would go right as they entered the store, but we have found that they go left, and we’ve changed out shelves accordingly,” says Whitney.

Real intelligence about how customers behave while shopping is useful – so useful the company will increase the number of sensors used in a new, larger operation being readied for opening in late March in a community about 10 miles away. But rather than incorporating technology for its own sake, the upgrades fit seamlessly with the design, decor and service at Maximum Beverage, all crafted to make the shopping experience enjoyable. That’s what has been bringing customers into the store, says Whitney, and taking that approach has helped set the store apart from its competition in this well-to-do area.

The Discovery Center

At the 10,000-square-foot, high-tech store that opened in April 2012, the intersection of technology and a better shopping experience is the Discovery Center, anchored by a 42-inch touch screen LED monitor that allows customers to explore the store, search wines and spirits by type and place of origin, learn about how a wine will match with foods, even create a customized cocktail recipe that they can then print, e-mail to themselves or post on Facebook.

For example, select carrots, oranges and vodka and the Discovery Center produces a selection of cocktail recipes from the 14,000 or so contained in the system’s database. Custom developed for the store, the program also allows customers to search the shelf and aisle location of specific brands, or to make the evening’s wine selections based on the dinner recipes they have in mind.

“If you’re having pork with Asian spices, you drag those items into the cart on the screen and the program recommends different wines for you that pair with your dinner,” says Whitney. The site has been a big hit in the store, so much so that separate beer and spirit centers are in the planning stages. There are also plans for a vineyard-focused program based on Google Earth that would allow users to pick a wine region — say, Tuscany –and then drill down to view more about the vineyards that are represented in the store, to visit their websites and to learn more about the wines made there.

Of course, installing these sorts of amenities including numerous LED screened end-cap displays that provide complete information about the items shelved there, including country of origin, region, reviews, tasting notes, price and food pairings, isn’t cheap; the cost to include the various electronic bells and whistles in the West Hartford store alone hit about $300,000. The computer server room located in the rear of the store “looks like a tech company startup,” says Whitney. “We have about 10,000 feet of CAD 5 [computer networking] cabling in the store alone.”

And every tech feature comes with a different set of problems and duties. “At first, I would go in the store and see that the end-caps or advertising hadn’t been changed in some time, but after two years we have it down to a science,” says Whitney. “You really need to stay on top of it and there’s an expense to that. You have to keep things changing on a regular basis or it gets very stale.”

Gathering data from sensors is only the start; putting in place changes based on discoveries about customer behavior demands effort as well. “We move around the sections quite often; we’ve moved South America, Portugal and Spain around three times since the store opened,” says Whitney about the 500 to 600 wine section. “They are very high-margin products for us and we move them around so they’ll get the most exposure. This is a lot of work — it’s a lot easier to just put it on the shelf and let it sit.”

Moving things around can pay swift dividends; based on past performance, last holiday season Maximum staff placed sparkling wine displays all over the store in about a half dozen spots. Prosecco sales especially went through the roof as a result.

Improving the Shopping Experience

Even though technology is built into Maximum Beverage’s DNA, with more than 30 large screens arrayed throughout the store, on end-caps and along the walls, the features were designed to serve the concept of a more manageable, pleasant and repeatable overall shopping experience.

As Whitney sees it, the goal is to create an Apple or Whole Foods of wine and spirits

Retailing: exciting and interesting, of course, but also comfortable and inviting. With about 75% of Maximum’s shoppers women, the design paid attention to the details needed to make the space less warehouse-like, by making the aisles more spacious, providing subtle but thorough lighting, keeping shelves at a convenient level, installing carpeting throughout the space, and introducing what he calls “the mahogany factor,” with every shelf and surface woodlined.

“Over the holidays, the way we have it decorated, the place looks more like a jewelry store than a package store,” he says. He learned in the previous retailing model that online shopping may be more convenient, but it’s not a very satisfying experience beyond that. “We’re trying to make the customer part of the fabric of the store so that they’ll want to come and spend time there.”

And the efforts seem to be working Whitney reports not only longer than average shopping times, but also increased rings. “They’re coming here and they’re not just buying and leaving, and that increases the ring. We almost never have anyone walk in and buy just one item. We’ve developed a very loyal customer base and a lot of our growth is because people bring in their friends to share the unique experience. We’ve become somewhat of a destination place – liquor stores are typically very local, but we have people who drive 15 or 20 miles for the experience.”

Promoting In-Store

Like with technology, there’s a cost in maintaining that welcoming feel – a couple of wine spills a week means there’s lots of club soda sprayed around by the staff to keep dark red stains out of the patterned carpeting. That desire to keep the store clean and inviting extends to merchandising and advertising as well: no paper signage or cardboard cutout displays are allowed, as all in-shore promotion and advertising is digital — those 40-plus-inch monitors feature store specials and limited-time promotions in repeating 15 second clips, all of which are made in-house using imagery and information provided by wine and spirit suppliers. This allows the store to promote brands they’ve purchased in large lots with better margins, and to reinforce events and samplings. (Maximum is now also selling ad time on those screens for what Whitney calls affiliate businesses, like restaurants and health and beauty spas.)

Before Maximum opened about two years ago, the wine and spirits retailer was known as

Dotcom Wines, lodged in a smaller facility and based on a large internet wine clientele, as the title suggests. But with the Great Recession and the sagging fortunes of many internet wine ventures, Whitney and his team were faced with a dilemma. He toyed with closing the store, but then had the opportunity to take over a prime spot in a well-heeled section of West Hartford. “We tried to figure out how we could afford to move there, and that’s when we came up with the idea of a creating a package store where the experience of shopping was as good as the wines and spirits.”

The new business took on the entirely new look in the course of a significant expansion. More than 3,000 different wines (including over 500 under $10) in a variety of price points are sold along with a selection of about 1,400 beers and more than 1,500 spirits, including a designated area called the Scotch Hutch. (In total, Maximum stocks about 8,000 skus.)

Maximum’s current sales volume break down is 60% wine, 16% beer and 24% spirits and Whitney thinks wine sales can move even higher. That’s not a surprise, given the market and the store’s emphasis on constant tasting.

A Tasting Bar

To further the image as a fun place to shop and to build the wine business, Maximum created a tasting bar, about 25 feet long at the heart of the store. It is equipped with three wine preservation devices so that at any one time, 10 wines will be ready for customer sampling, as will three beers on tap. Live tastings are conducted regularly, with winemakers and winery reps invited on Friday and Saturday; employees man the site other days. “We really believe that a store develops its clientele by getting people to come in on a regular basis to try wines before they buy them,’ says Whitney.

Tastings take place from noon to 8 pm every day, with as many as 250 people sampling product on a Saturday. Rather than cheap plastic cups, Maximum staffers pour wines and beers into Spiegelau Bordeaux glasses during tastings. The space frequently gathers up to 50 customers for meets with winemakers from Veuve Cliquot, Millbrandt and other wineries.

Whitney admits that in terms of what wines Maximum beverages carries, decisions are made based on what their customers want. “We have to carry the major national brands; we’ve got maybe 450 French labels, maybe 100 Bordeaux – we want to carry what the customer wants but if we can steer them to something that’s a better value for them and we make more money at the same time, obviously that’s what we want.”

Tracking items as well as traffic and moving displays means that management finds out pretty quickly whether a wine or spirit performs well, and if they don’t sell three or four bottles of a single brand per month, then it probably won’t be restocked, with high-priced items excepted.

Currently, the average per bottle wine sale is about $16, still down from 2008 when $20 or so was the sweet spot; higher-priced wines spike around the holidays, and even though the very high-end buyer’s move to scanning prices like a bond trader has shrunk that business somewhat. Whitney says he probably sold about 1,000 bottles priced over $100 during the holidays last year.

While the beer business as a whole may be in flux, it’s on fire at Maximum – up 65% last year based on the store’s craft reputation. “Being able to provide beer tastings for customers really helped us become a major beer player in Connecticut and we have a tremendous following.” In addition to the three beers available for tasting every day, staffers open 10 bottled beers every Wednesday, and the store has developed relationships with brewers, including Brooklyn Brewery, which sends reps to the store with new brews every month or so.

Brown and Craft Spirits Hot

In terms of spirits, it’s brown and craft spirits driving things now – small producer whiskies like those from High West, Balcones and Tuthilltown, as well as moonshines, single barrel bourbons and regional producers like Sons of Liberty Spirits of Rhode Island. The store wrangles about four single barrels each year from Kentucky distillers; next up is Buffalo Trace.

The Scotch Hutch contains around 200 single malts. “It’s a big commitment but on the other hand we’re not buying them by the case,” says Whitney. Since the store is known as a great brown spirits spot, they are a gift destination for holidays and special occasions. In fact, each staffer is trained on gift wrapping. “So many of our female customers buy these gifts and that extra touch of wrapping each bottle has created a tremendous amount of customer loyalty.”

More in the New Store

In the new store, Whitney and company are expanding, both in footprint — the new store is about 11,000 square feet — and amenities. They’ve added a cheese department with its own Discovery Center that will be front and center at the entry, with 60 cheeses cut to order and another 50 pre-cut.

In addition to more movement sensors, the new store will expand its products by 30%, and there will be a larger tasting area and a 24-door beer cooler and a beer cave, as well as a dedicated wine cellar. This will be for wines above a certain price, with temperature and humidity control, and it will be protected via sliding glass doors to limit the intimidation factor sometimes created by a separate wine area. (A similar cellar is being installed in the West Hartford location.) The store also stands alone and has dedicated parking.

Social Media Activity

As is to be expected from a high-tech operation, Maximum Beverage is active on social media: Facebook, Twitter, Instagram, Pinterest. They’ve recently hired a full-time social media and internet marketing person, and are active in text message marketing as well as e-mailing newsletters twice weekly. Electronic marketing is a changing landscape; indeed, only about 20% of e-mail marketing messages are opened, while text messages achieve about 95%, so a weekly text blast for customers who sign up has been part of the recent social marketing mix. However, deals offered “have to be so good, we lose money on them and just hope they buy more of something else,” he says.

Like for a lot of contemporary stores, advertising — where to do it, when and how –has been an issue for Maximum. An animated TV campaign, using a controversial ESPN host who also does promotions with the store, has yielded mixed results. “I don’t know if it really works, and I’m not sure the best way to advertise; probably direct mail is best and we do that two times a year as well, and we do some radio,” he says. “I’m not sure any of it works but all of us retailers are afraid to stop doing it because you don’t know what the impact is going to be.”

And when you have a store setup that can tell you where your customers hang out the most, when they pick up a bottle and what sort of wine they seek frequently, not knowing the impact of a ad could be very annoying. But perhaps the next level of technology-driven retailing will have a direct line to ad responses, who knows? Until then, it will be stores like Maximum Beverage and their yards of cable and array of screens that will lead the drive to refine the beverage alcohol shopping experience.

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