I get emails all the time from retailers who are beside themselves over the big box movement. I also get calls from frantic retailers who think that grocery stores are taking over the U.S., and if grocery stores can sell wine on Sunday then they might as well close their doors.
As the great poet of the NFL, Aaron Rodgers, once said in a moment of clarity, RELAX!
While I am no poet, I can share the same comment. Off-premise retail will be just fine — it will just take some effort. There are no accidents, just planned results.
There is a movement in this country that started in California and is now sweeping east. The Anti-Chain Movement is a group of Americans that refuse to buy and sell into chain stores. But, as fate would have it, this is not some hippie from Cal/Irvine, this is mainstream Americans.
While our landscape is littered with large retailers, there are folks who want to support the small business and help the little retailer. That is you. But they need a compelling reason to shop you. You need to provide a reason that is not price. In 2015, we must accept the fact that Costco, WalMart and the like are impossible to compete against when using price as the lever. We need to provide service or selection or knowledge as the driving principles of competition.
When Rosen Retail surveyed 1,000 shoppers in 2014, we learned that price was number six on the decision list. Service and selection were first and second, respectively.
Same Story on the Supply Side
Suppliers more and more are looking for different outlets to sell their wares. There is no question that being on the shelf of Total Wine is great, but the reality is that being on that same shelf can kill your business. Their sheer size and SKU set of control labels make your brand a third-tier choice for their sales teams.
That same scenario plays out at regional players. When you enter distribution and the goal is to be in the shelf at “Mega” Liquors, you are sharing Lozier racking with 1,000 other spirits and 5,000 other wines. The nature of “Mega” Liquors is to have heavy selection and light sales help. Your brand will die there.
Suppliers are searching out small distribution channels and regional and small off-premise retailers to champion their brands. It has become an “us against them” reality in the three-tier system.
Recommendations
If you are an independent retailer, invest time and effort in learning small supplier brands. We would also recommend starting to acquire SKU’s that are from small distributors. When a brand and a supplier get behind a retailer, good things happen. Ketel One may not come and support at your store, but “independent vodka” will.
As a retailer, it is nice to have small brands and hungry brands and distributors that come and sell and promote. Ketel One does not need you; independent vodka does, and that little attention reciprocated will sell more goods.
That is why the independent is not dead. Small brands and small distributors need to rally together and work towards providing service, selection and knowledge. Small means nimble, and nimble is a good place to be in today’s marketplace.
Brian Rosen is operating partner of Evolution Wine & Spirits, in Chicago, and is available through Evolution Speaking and Consulting. He can be reached at brian@evolutionwines.com.
