November 22, 2014 § Leave a comment
This weeks announced changes to the liquor industry in B.C. will go into effect on April 1, 2015, but already their impact is being felt.
Social & traditional media has been jammed with calculations, prophecies and conjecture and, full disclosure, I have been apart of it to. However, after a Facebook conversation this morning I took a step back to get a broader perspective.
We have to remember that none of these changes will change the size and value of the market. If anything all they will do is divide the ‘pie’ into more pieces and shift value around.
It is no secret that BC Liquor Stores have been losing share to private stores each year for the last 10 years. Creating a level pricing field is likely the only way that this trend could be reversed using legitimate means. I expect that BC Liquor Stores will start to act like a large grocery concern and leverage their position to either mitigate costs or corner the market on certain products. This could mean disaster for many of BC’s private liquor stores who rely on price and product agility combined with well oiled marketing machines, but it won’t mean any more money into government coffers.
The other big announcement leads to further splintering of the market. Allowing liquor in grocery stores, no matter how it is done, will not lead to any greater revenues for the province or any increased sales for suppliers. It just means that there are more places for consumers to buy booze.
I truly hope that the quality of liquor retailing in BC will improve and I hope that these changes will instill a spirit of continued improvement, however these changes will not change the fact that we pay the highest prices in the country, and it is certain, that they will only mean the pie is divided in more ways.
I would love to hear your comments and feedback so please engage.
I will also be writing a piece specific to Wholesale Pricing so look for that.
May Quality Be Ever In Your Glass
September 28, 2013 § Leave a comment
The only real competitive edge that private liquor retailers have in BC is their product selection. The absolute risky-est position to be in is having a photo-copy of a government store in terms of selection. As a private liquor retailer I have found that the only way for me to best maintain my market share, or to make it grow, is by walking the fine line between listed and spec products.
By having about 40% (and growing) of the products on our shelf that are only available at our stores or in other private retailers, allows me to 1) clearly distinguishes me from government stores, 2) have more control of my margins while maintaining price confidence with the customer, 3) Allows me to focus on customer service in the form of product knowledge, 4) means I can truly say we are professionals.
Why do you choose the lawyer, doctor, dentist, accountant, personal trainer, hair stylist, plumber, etc. that you do? Part of the answer comes in your belief that they are qualified professionals that have spent hundreds of hours being an expert at solving problems that you have in their area of expertise. Chances are you have found them by referral or by meeting them. They conveyed an air of professionalism and confidence that you have come to trust and that trust has always been vindicated. For us in private liquor retail it is no different. What kind of confidence will your customer have in you if your selection says ‘I don’t know anything about this beer/wine/spirit and I don’t care, I just want you to buy it. All I know is that someone told me it sold well”? You need to be their ‘doctor’ of wine, beer and spirits. Your selection should say “in your case I would I’m going to prescribe this wine over that one. That one will work for you to but I think that for today this is the best choice.”
Customer loyalty comes from developing personal relationships and sharing your customers day to day successes and failures, feelings of confidence and defeat, feeling great or suffering from a cold. By saying “I know just the perfect comfort food wine for you, you can’t find it everywhere, but I loved its depth of flavour and boldness of body” you are telling your customer that you care about them. The old saying “I don’t care what you know until I know that you care” is so true when comes to developing lifetime customers in our business. Your selection is your customers silent witness to how much you care about them.
There are hundreds if not thousands of items available right now that offer 40% and 50% margins, are priced for the average joe and blow the doors off the leading brands in terms of quality. It takes work and dedication to find them, but the work and time pays off 10 fold.
Someone I admire once told me to focus on the critical few and forget the trivial many. When your selection says you care, you can then spend most of your time focussed on customer service. This means staff education, product knowledge and engagement, developing better hiring practices, improving the flow of the store, keeping the store clean and having truthful and informative signs on products throughout the store. This is one of the ‘critical few’ and is perhaps the one that delivers the most tangible and intangible positive results in your business.
Start to pare down the ‘me too’ items and replace them with ‘I love this and will stand behind it’ items and your business will be far more secure and fun to operate… no matter what happens with the Liquor Review.
September 27, 2013 § Leave a comment
Dear Importers, Agents an Sales Reps;
Save your money!!!!
Most new product pitches that come across my desk are heavily leveraged against the tasting of the product. In BC this is ridiculously costly and doesn’t get nearly as many sales is it should and can.
Smart buyers understand that the taste of the product solves a couple problems, however these problems can only be solved if the business needs of the deal are met first. Tasting/Sampling only serves to provide staff education for those on the floor and to convince me, the buyer, that the product will sell more than once to a customer.
First things first is how does this product solve my business problems? Does this fill a hole in a price and margin segment? How seamless is distribution? Is it a year round proposition, seasonal or one time buy? Does it represent a category I’m lacking in? Do you have the codes necessary for our POS system to accept it?
Lastly what benefits does the consumer realize from this product/proposition. This is almost never answered and it is far more key to the success of the product than the taste.
Most pitches are laden with a long list of features. I call these meetings show up and throw up meetings. The presentation leaves it to me to assume what the benefits to me and the consumer are and this is where the presentation gets tripped up. It is better for the sales rep to answer objections to stated benefits than to argue the validity of a feature of the product.
Sampling should be treated like the subjects to buying a house. It is a condition of sale, but one of the last conditions that need to be met. Furthermore once met, the deal should be closed. So save your money and use sampling tactically.
The Dork UnCorked
June 4, 2012 § Leave a comment
I started reading Jason Ripley’s study as the feasibility of privatization in BC. A couple of stats jumped out at me. The first was the number of transactions. He estimates about 38m transactions per year. The second was the value of health care costs that are not covered by current LDB income and are a direct result of irresponsible liquor consumption. I’m not clear, I will have to re-read the section, how he was able to state that $60m were not covered by the current net income of the LDB, regardless I might have an answer.
In the study he notes the positive effect that minimum pricing, if at the correct level, has on irresponsible consumption. He also notes on a number of occasions that problem consumption is attributed most at the low end of the price scale. Specifically the highest alcohol for the lowest price.
Here is the solution. The caveat is that it will require government to directly feed the income from this proposal to cover excess health care costs. Something, that up until now, they have been reluctant to do.
$60m divided by 38m is $1.58/ transaction. Apply this to every separate transaction and have the funds go directly to health care. This would be a flat charge that is applied to every transaction no matter the value.
I wonder if a study can ever be done on the unintended positive effects of moderate consumption.