Another Opening, a Bigger Show

It takes something special to top the success of the Haskell’s chain of wine, beer and spirit stores operating in the Minneapolis-St-Paul area, but owner and retailing legend John F. (Jack) Farrell, Jr., chairman and ceo of Haskell’s Inc., thinks that with this new store, he has found the formula for the company’s future.

At 20,000 square feet, more than double the size of any other Haskell’s unit now operating, the Maple Grove location is the largest in the state, mammoth indeed with more than $2.5 million in inventory under one roof, about 9,000 in wine skus, two to three thousand skus each in beer and spirits, and a separate accessories department.

“The reaction of people coming in here is the most amazing thing. They are just swept away by the scope and size of the place and the wonderful ambiance,” says Farrell. “It creates a desire among customers, I think, to load up those shopping carts — yesterday a woman bought four bottles of whiskey for $170; our unit sales have always been very, very high, but so far, they are even higher in this store. I used to think the optimum store was 10,000 square feet,100 by 100, but this sort of space provides a whole new feeling to things.”

 

Surpassing Expectations

Only opened a few days before Christmas 2013, the store has already set the bar very high, surpassing early expectations — Haskell says previous stores built business slowly over time. With broad lines of sight, lots of illumination, spacious aisles and well-organized sections, the new Haskell’s addressed both the concerns of loyal customers as well as the challenge of impending competition from big box retailers like Total Wine and More. (It doesn’t hurt that one of the busiest Target stores in the state is right next door, either.) All that has brought a new style of shopping to the Haskell’s experience. Oddly enough, this isn’t what Jack Farrell had in mind when first conceiving of this store, the first new Haskell’s since 2011.

“Originally I set out to make this location like a warehouse store, with palates stacking atop palates and massive displays. But as I got into it I thought, “No, I don’t want it to look like a warehouse store. I do want palates and stacks, but I don’t want anything more than six feet high and I want customers to be able to see all over the store.’”

Rather than the colder feel of a warehouse store, the look is more elegant without detracting from the massive selection and impressive displays of wares. He brought in the custom-made wine racks used in all Haskell units and tweaked them to be movable, giving management flexibility in store design — the entire facility can be reconfigured in the space of four hours, and by mid-March, the lay-out had been altered a few times already.

 

15,000 Bottles Lining One Wall

One entire wall of the store holds more than 15,000 bottles, with three wooden library ladders used to stock and gather bottles of wine. “That’s very impressive,” says Farrell. “It looks almost like a scholarly setting, if you will; that’s part of the thing you want people to see, to impress them. “To be a wine merchant today, you have to have a fairly large inventory with lots of skus and really be on top of your game,” he says. “There’s nothing like stacking 100 cases of Captain Morgan on the sales floor to catch a customer’s eye — people look at it and figure they must be well priced. These are things places like Target have been doing for years, and it just took a while for the beverage alcohol business to catch up.”

Creating a larger store of some kind had been a goal for Haskell’s since around 2007 when, after opening a 9,500 square foot store, customers still remarked that the store was hard to shop, given the massive selection Haskell’s has long been known for.

“Making a store comfortable makes people stay longer and shop more, it creates a comfortable and safe environment that everyone, especially women, like,” says Farrell. With the outside of the building brightly lit as well, there is an attractive and inviting appeal to the store for even uninterested passers-by, he says.

“It’s allowed us to do far bigger and greater displays and events, where we were pigeon holed in our old stores,” says Jack’s son and company president Ted Farrell. Recently, the store hosted a Maker’s Mark promotion in which the distiller brought in equipment that dipped bottles into the brand’s trademark wax seal and etched them, for example. “Now we have the elbow room to do those kind of events and do them well without having to manipulate our store too much to make room,” he says.

As the beverage alcohol retailing business changes, operations like Haskell’s, which has made its mark through promoting wine at all levels, a massive selection and knowledgeable staff, must adapt, Jack says. “We really do have to keep up on the way things are changing. Twenty or 25 years ago, I knew most of the people in the wine business; today, I feel like a rank amateur sometimes, with so many new wineries and regions opening up.”

“It’s an evolving business — some of those wines that were fabulous a few years ago are mediocre now.” He was reminded of that speed of change recently on a trip to the wineries of Israel, where he found numerous world class wines. As well as increasing skus of wine, stores like his must keep service staff interaction very high. “You go into big box stores and they might have a lot of skus, but there’s nobody there to answer any questions for you. A successful wine merchant should have people on the floor to answer questions and give some guidance.”

Recently, Haskell’s stock of elite and high end wine is starting to move again, although the good old days of the turn of the century are not at all returned. “Nowadays when you see someone interested in a case of Latour, it almost sends ripples through your company, whereas before the response might have been ‘So what?’” says Jack.

Also reduced and unlikely to return are newspaper ads — the stores keep in touch with customers via an organically built e-mail list, tied to the point-of-sale that allows them to target customers and alert them when certain items are discounted or available. They, of course, have a Facebook and Twitter presence, with Twitter serving as a good attention getter for sales and special events.

 

Massive Beer Cooler

While showcasing the impressive wine selection is key to the store’s early success (Haskell’s has long gathered about 60% or more of its retail volume from wine and they are officially known now as “Haskell’s, The Wine People”), other changes have been introduced to adapt to contemporary shoppers, particularly the store’s massive self-service, walk-in beer cooler. Nearly 20 doors along the wall of the store, it holds an enormous selection. “A lot of our stores have an emphasis on beer, but with the craze for craft beer, we decided there was a need for more focus. It’s an area we haven’t neglected but haven’t put as much emphasis on it, and being able to is a direct result of all the square footage we have here,” says Ted.

The appeal of craft beers is perhaps growing faster in the Twin Cities area than other areas, he says, with more than 20 microbrewers in business and more opening all the time. Seasonal beers are a “phenomenon” there, and Ted credits the way craft brewers have excelled at social media, sending out news about new iterations and release dates. “When a limited time offer pumpkin ale or IPA comes in, the 10 or 15 cases we get are almost sold out before they get into the store.”

“If someone had told me you could get $20 for a bottle of beer as recently as ten years ago, I would have told them to get their head examined, but today these craft beers come in, allocated, and they’re in and out in a couple of days, and the customer knows more about them than we do,” says Jack.

The size of the cooler allows supply chain efficiency as well as customer convenience and selection; a palate of big-selling beer can be brought directly into the cooler, saving on the labor required to reload the cooler and taking advantage of volume deals.

While expanded beer coolers aren’t exactly new in today’s craft-driven market, other store innovations pose interesting questions for the future.

 

Several Innovations

In the first, the Farrells will be giving over space to Boisset Family Estates for a store-inside-a-store mini-shop, much the way Cartier and Chanel might establish in a high-end department store. The specifications were still being settled at press time, but the 10 x 10 kiosk/store will exclusively feature Boisset products. “I think this could be the wave of future. That way, we’re still honoring the three tier system, but suppliers are getting the attention to their products that suppliers believe they need,” says Ted.

In addition, being developed is a hand-held cash register system that will allow floor staff to ring up and check out customers directly while shopping on the store floor, without waiting on line. Wifi managed, the system will allow staffers to scan each bottle, call up a customer number, swipe a credit card and the customer can avoid a stop at the cash register. (The store awaits the system upgrade for the latest generation of smart phones.)

Additionally, the Maple Grove store was designed with about 900 square feet carved out for an accessory department selling glassware, barware, gift bags, shakers, wine-related trinkets — the sorts of things that other Haskell’s were hard pressed to find room for.

Haskell’s stores pioneered frequent in-store wine tastings in the area in their Tasting Bar formats, but here, that has expanded as well, with a dedicated and expandable classroom, as well as also tasting stations spread around the store, and an enormous television in the classroom setting that allows winemakers to speak directly via the internet with customers and staff during tastings. “We’ve taken wine barrels and put wheels under them and glass on top, and we can move them all around the store. For a recent whiskey tasting we hosted, we stationed them all around the store. It was like going into a supermarket where different foods are tasted everywhere,” says Jack. At least four stations are being employed on weekends, when the Tasting Bar is always busy.

 

Major Promotions

The team has great hopes for the first of the two major wine sales held across the chain of stores each year: the spring Nickel Sale is billed as the world’s largest wine sale, in which customers pay full price for the first bottle and a nickel for the second. In five weeks, Haskell’s routinely sells over a million bottles of wine and the Farrells expect to do more with the big store on line.

“Those promotions are getting bigger and bigger and they’re juggernauts, without a doubt,” says Ted. But he notes that while in past years, Haskell’s sales trends showed two enormous peaks during the Nickel Sale and the fall sale, the periods that were once slow are gathering share.

The space provided for spirits has grown too, mostly to give better facings and placements to brands that were already carried. But the same craft impulse that has grown the beer section contributed to the spirit department expansion. “Some of the others stores are hamstrung, but here we can do six or seven facings of a brand, and with bourbon and other brown spirits getting so much attention, and new product extensions and flavors, people are interested. You need room to make the best presentation that highlights all that product activity,” says Ted. Recently, a Pappy Van Winkle release party brought out more than 200 people who showed up for an opportunity to buy one of the 50 or 60 bottles available.

“For the last five or ten years, we were in the golden era of wines with all the different regions and the changes, and you are seeing the same thing playing out in beer and spirits. So you need the room to grow,” he says. While brown goods have surged, vodka has slowed down, although the store still sports a 30-foot section of shelves six levels high.

This Maple Grove store may only be the first of the new model Haskell’s, as Ted Farrell points out, noting that there’s still room to grow inside and outside the metro Minneapolis-St. Paul area. “Right now, we’re celebrating our 80th year in business and you don’t get to that point in your corporate life by taking things for granted. We’re proud to say we’ve been doing it since the Repeal of Prohibition — we have the right formula and look forward to doing it for another 80 years.”

Jack, a Chicago native who bought the one-store business and grew it into the Midwestern powerhouse it is today, agrees. “This is a thrilling time to be in our business; all these new discoveries and types of wines and beers and spirits. I’m as enthusiastic today as I was when I bought the store from Benny and Fritzi Haskell in 1970.”

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