The Amplification Effect and five ideas

If there is one thing most restaurants and retailers fail to see, it’s what I call the Amplification Effect, or AE for short. The AE is what happens when a few very simple changes are instituted or habits are formed, that each feed off each other, and make the sum far greater than the parts.

If you study business habits of other industries and apply them to the world of wine, it’s clear there is a huge opportunity for any retailer or restaurant to make a major impact with minimal investments (be it time or labor).

The best thing about the Amplification Effect? It helps both the customer AND the retailer or restaurant become better, thus both feeding off each other.

Here are five ideas for wine retailers and restaurants with this AE theory in mind. This is not rocket science, but it’s amazing how few retailers and restaurants implement them. Thus, you have a blue ocean of opportunity ahead of you.

1. Let the public know what is new and what is happening
In the last five years the game has changed in the world of communication. You can now, instantly and world-wide, let most people in your sphere of influence (i.e. customers) know what is on your mind or happening in your shop or restaurant.

And yet, so few do it. Why?

Why don’t you let me know when a new wine arrives? Why don’t you tweet out that you’re popping a special bottle and the first ten people in get to try it (but no more … scarcity is a driver!). Why don’t you tell me via a photo on Facebook that you just tried the Dog Point Sauvignon Blanc with the salmon special and it might be the best combo of the year so far? And it works on the back end too … only have three bottles left of that 94 point Robert Parker gem that is only $14.99 a bottle? Let me know.

This type of social media activity is constantly happening in the craft beer world, and a page should be lifted from that for the wine world.

2. Brag about the provenance of your wine
Do you know where your wine comes from? I’m not talking what country, I’m talking about what warehouse. Is that warehouse temperature controlled? Is your store temperature controlled? Do you serve your wines with concern about the temperature? Do you store your wines in a correct (cool) environment?

Talk it up!

Only through retailers and restaurants setting the standard high for correct storage and provenance will the consumer institute it in their own wine lives. And the customers that understand how important provenance is for wine? Well, those are the ultimate customers you want in your location.

This is a win-win.

An added benefit for talking about provenance? If your competition is serving cabernet sauvignon at 75 degrees or their store is blasted with hot sunshine every afternoon, you have quietly made a case for the customer to return to your location over and over again.

3. Take stemware seriously
Many of you know my feelings on using correct stemware: it’s the single easiest way to get more out of your wine enjoyment. To me, it’s essential. So essential that I’m going to start a list on this website showcasing restaurants and retailers that understand, promote, embrace, and use correct stemware for the benefit of the customer. That’s coming this spring and summer.

(I was going to start a second list of places I boycott because they serve me good wine in tumblers or other crappy vessels. But I like to work with positive energy instead of negative, so the list will only be highlights of those doing it right.)

It always comes down to this: if a plate could alter the taste of food, why would a chef choose the plate that makes their food taste worse?

Another way to look at it: take a glance at your last ten restaurant bills. What is the single most expensive line item on most of them? Not the appetizers. Not even the dry aged rib eye. The single most expensive item on most restaurant bills? The bottle of wine. So why is it served with such disregard at so many establishments?

For retailers, have Riedel not only available to purchase but also available for in-store tastings. Wine out of a plastic cup doesn’t do much for me. Save the plastic cups for cocktails and Pepsi.

4. Show me what you staff likes
This goes for retailers especially. Have a section front and center in your store where your employees can showcase their newest and favorite wines. Wine is about a human connection, and if the connection is in the form of your employee writing a paragraph about how incredible a little unknown gem from Sicily is, then guess what? It will sell more. But more importantly it’s putting a name and a face (be sure to have a photograph of the employee on the display … “Bill likes…” doesn’t do it) to the product and the process of selection.

Personal recommendations are powerful. Keep them rotating. Keep them fresh.

On the restaurant side? Here’s an idea: one day a week have the staff pick one wine to feature at half price by the glass. What does this achieve? Energy. Sales energy at the table. Flow of confidence. Identity (customers look around and see every table has wine on it). Think of it as advertising that you actually make money on, instead of cash flow that you’re losing. The benefits outweigh the costs.

5. Embrace the fact that “value” and “price” are two very separate things
In the Twin Cities we see the pricing wars develop during the spring Wine Sale season. Stores become obsessed with being ten cents cheaper than their competition on a $5 bottle of wine. Window signs and newspaper ads (for the few left that think that’s a good way to advertise) claim “Lowest prices guaranteed!”

By making the mistake of assuming “value” and “price” are intertwined they are painting themselves into a corner. God help them if wine arrives in grocery stores … they will be unable to compete. Period.

“Price” is obviously what comes after a dollar sign.

“Value” is what YOU, Mr. Retailer, bring to the exchange.

Communication, knowledge, proper stemware for tasting, staff selections, location, parking, friendliness, cleanliness, energy, excitement, availability … these are all aspects of the value equation. If you are trying to appeal to customers that will burn $2.00 of gas to save $1.50, then you’re working in the wrong direction.

For proof that value is not price driven, just look at shopping habits of the youngest wine drinking generation, the millennials, the single largest generation in terms of population and the ones that will be driving the wine bus economically in about ten years. The key differences are found at the bottom of the chart. The upcoming generation cares far more about enjoyable experiences, community citizenship, staff knowledge, variety, frequent shopping programs, and online ordering. Less important for them is value for the money (because they are seeing “value” differently).

milennials_shopping

They want knowledge of the product and variety, much more so than Gen Xers. Most importantly for retailers, they are getting their suggestions on what to buy from their friends instead of Wine Spectator or The Wine Advocate. Are you part of their social conversations? Is your store active on Facebook or Twitter?

In the restaurant world, the same matrix applies. Millennials don’t have the money of GenX but they make up for it by buying often in the mid-priced categories. They want something special that connects to them beyond just a label or price. They are seeking organic and biodynamic wines (does your wine list feature them?). They are seeking something unknown and new (do you highlight new arrivals?). They want to tell their friends about great wines they find (do you encourage wine notes on Foursquare? Do you reward those that mention you on social media?).

Returning to the Amplification Effect

Implementing any one of these ideas will make your business better. Most of these ideas fall into the ‘it just makes sense’ bucket.

But what I’m getting at here is more than just implementation of common sense. It’s momentum.

Implement the ideas, start talking them up, and you’ll see a shift happen in your employees AND customers. This shift happens in other industries and has been happening for the last five years. The wine industry, strangely, is always behind others in terms of business ideas and implementation.

So what does momentum look like? Customers that return asking for suggestions. Employees that feel more engaged. Communication that results in action. And, in the end, some magical profitability without concerning yourself with what your competition is doing. Seem unreachable? If you think you can’t do it, you’re only making your competition more powerful.

In many ways, maybe you are your own biggest competition.

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