The Falcon Who Seeks No Prey

One resolute bird.

Earlier this week, the Atlanta Falcons made a curious and rare decision to listen and respond to its fan-base (press release). Upon the opening of its new stadium, the NFL franchise will charge far more fair and reasonable prices for its concessions.

Long irksome for sports fans, the cost of concessions has reached a point wherein it can cost more for a beer than a seat on a given night. Increasingly, only those named Walton, Hearst, and DuPont are able to enjoy a family outing to the ballpark complete with sustenance through the often four-hour events. To be fair, concessions are luxuries—not truly necessary to the enjoyment of the game—but they are, and should be, part of the experience (and can be the key to maintaining a positive experience/sanity for those with children). But, at what point is it reasonable for a team or venue to dictate the terms of bankruptcy for a family to enjoy the ostentatious luxury of some dogs and sodas?

Atlanta Falcons CEO, Rich McKay, no longer believes those terms are reasonable at all. Why? Because research consistently showed that concession prices, quality, and wait times ranked as the worst of all fan experiences. This is across all leagues, teams, and venues.  The Falcons, who just completed a new stadium, had the opportunity to right that wrong and lead the charge on new paradigm.

What does any of this have to do with the wine/beer/spirits industry? Well…in short, everything. Recognizing and reacting to broken practices is key to any business’s health, particularly when relating directly to customers. The lessons from the Falcon’s decision are powerful. What McKay and his team realized is that doing things the old way just because that is “how it has always been done” is not a sufficient excuse for poor customer relations. Sure, there’s lots of money to be made on jacked-up soft pretzel prices, but is it worth the cost of a positive overall fan experience?

Alcohol beverage retailer—are you buying a 10-case QD deal on National Brand × Red Blend and still selling it at full markup? That’s fine, but you must give your customers enough credit that they likely know what the competitive price should be. Trust me, your customers may be loyal as a matter of convenience but they shop around.

The Falcons identified this need to treat their customers as knowledgeable consumers and not simply as cash machines. They realized that there was a long-term cost associated with overcharging their customers in the concession lines and that is that they would likely eat and drink at tailgates before the game and hold off on the second beer or soft pretzel inside the stadium opting instead to save the money and get a proper meal after the game. In the short-term, under the old model, they may make better margin but they will have significantly lower volume.

The difference for you is that you do not have the captive audience that a sports franchise has. If a ticket-holder wants a drink or food during the game, they have to pay the whatever the concessionaire charges. If a customer walks into your store and doesn’t like the prices they see on the products they like to buy, they can walk out and go somewhere else. The Falcons still made the decision to cut their concession prices even though they have a captive audience because the trade-off of lower volume over time coupled with constantly disgruntled fans was not worth the extra margin on the short-term. You need to think the same way.

Respect your customers. Listen to them. Find ways to appease them—be willing to cut prices on what should be high-turn products, trial run customer requests at less than standard mark-up to be competitive with the market at-large, etc., and be fair and reasonable in finding alternatives to your customers when it simply doesn’t make good business sense to do exactly what they want. You are in this business for the long-haul anyway—the short-term margin losses will be made up over time with greater volume and happy customers.

Remember: there are always ways to make up the difference in margin. You can never make up the difference in lost customers.

On Being “Big”

Big in size. Bigger in heart.

Reading this article from the San Fransisco Chronicle brought back a lot of the strong feelings I had for the boutique wine shop I managed until early this year. I loved that shop as a consumer for many years and then as its manager for four-and-a-half years. The one-on-one, first-name-basis personal interaction with a customers and autonomy to create a small environment to my vision is irreplaceable. It still has an important place in my heart and in my development as a wine professional.

But is small in size and scope necessarily the answer for providing the best service to customers? While that was once my closed-minded and ardent belief, I can now confidently say, “I think not!”.

Working for a fairly large store (albeit, an independently-owned single unit) over the last several months has dramatically changed my perspective. While speaking to a sales rep for a large distributor yesterday, I casually mentioned that big doesn’t mean impersonal with respect to distributors or retailers—our general experience as a consumer society has just skewed us into that perception. We have all had experiences ranging from sterile to downright inhuman in large retail environments, but if we really think about it, scale is not at the heart of those experiences. It’s all a matter of the intellectual, philosophical, and emotional investment of those who interact with customers every day.

I do believe that there is a “critical mass” point, however. Larger corporate retail entities do, typically, create a staff of uninvested drones largely due to poor wages, lack of managerial support, and fostering a feeling of expendability amongst its employees—particularly the front-line staff who have the most direct customer contact. A truly positive customer experience is very rare under such circumstances. Growing into a regional chain or larger almost always causes a disconnect between the original principles and mission of the founders and its satellites. It simply is not practical for the individualistic personality that created success to spread effectively to the employees of chain stores who have no real experience with those founding intangibles. Employee pride is always built on “feel” and not on a strict doctrine or delineated and enumerated employee manual.

However, making a broad generalization like “smaller is better” in retail wine is just silly. To me, it’s a matter of determining what constitutes “big” as a matter of consumer perception and at what point a retail owner comes to terms with what is “big enough”. Smaller only serves niches better. A large, independent store with an in-store ownership presence and employees chosen and nurtured for their personability and their unique skills has the potential to excel at serving the masses as well as specific niches. The key to meeting that potential is keeping the focus on the customers.

You’re a young professional who just started drinking wine and thinks that Cupcake Moscato is the greatest wine ever? That’s cool, for now.

You’re a sixty-something construction foreman who has always drunk Jack Daniels because that’s what your dad used to drink? That’s great, keep it real.

You’re a homemaker with kids who likes to sip on KJ Chardonnay throughout the day because it’s a known quantity that has never let you down? Whatever floats your boat.

You’re a college kid who only buys Natural Light for bang-for-the-buck or Pinnacle Whipped because it ingratiates you with the sorority sisters? Whatever gets you through the night, kid—there’s always tomorrow.

You’re a points-hound who refuses to shake the habit in the face of the constant internal struggle tha,t even if you don’t like a wine, it got 90+ points from Parker so it must be good therefore you must buy it and try to like it? Well, you are Einstein’s definition of insane: “doing the same thing over and over again and expecting different results”. I don’t abide it, but I’m not likely to change your mind, so have at it—you and your money will soon be parted.

You’re a person who always wants in on the undervalued gems that only someone like me who tastes 50+ wines, beers, and spirits every week can let you in on? Let me show you.

You’re a consumer that wants to try new things but needs to be led by the hand by someone you feel you can trust to make a decision for you? I’m your man.

You’re a member of the rising class of Gen-X-ers and Gen-Y-ers who are into experiences and want to try as many different things as possible because the thrill of exploration is worth the pitfalls of ending up with something you don’t like? Atta boy!

See, my large store can serve you all wonderfully. And, with committed ownership, management, and staff, we will continue to try to improve our ability to serve you. Small enough to ensure direct customer interaction and encourage personal relationships. Big enough to make sure we never run out of KJ Chard and Natural Light but also so that we have more space for the off-beat, unusual, rare, and prestigious. In fact, one of the great benefits to being larger is being more comfortable with bringing in niche product that may not turn for a while because the high-turn product keeps everything afloat.

A large store does not have to sacrifice any of the things that makes a small store appealing. It just needs to be run by people who understand when big is “big enough“.