StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions
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5 StateWays ■ www.stateways.com ■ January/February 2015 By Brian D. Rosen W e retailers have worked very hard for the last four months. We've also worked very hard for the four months that preceded them. Finally, we've worked very hard for the four months that preceded the second four-month period. What all this really means is that we are always, as retailers, working hard. We just fi n- ished 2014, and now the meter is at $0 again — it all starts over for 2015. Thanksgiving, the day that has the potential to be the best wine sales day of the year, has passed. Goose Is- land Friday is over, and the whole month of December is faded like your patience by the time New Year's Eve rolls around. How can we make 2015 a better year? How can we take the entire leftover paid inventory and "turn" it and fi nally, what can we do in the fi rst quarter of 2015 so we are into our line of credit as little as possible? When I was CEO of Sam's Wines of Chicago, we dreaded the first quarter. All the bills are due, the associates want bonuses and all the customers are in hibernation. We would enter the sales floor know- ing that our inventory on January 1 far exceeded our sales for that first quarter. As retailers, and especially alcohol beverage retailers, we just had to deal with this reality. Store Reset Once the garbage is cleaned and the shelves re- stocked, a store reset might be needed. Knowing the traffi c fl ow of your consumer is key here. In my teach- ings I write about quadranting the store and using key tag items to chart customer fl ow. That is really fancy talk for noting a good-selling item, and noticing where you place it, its selling pattern and its velocity. When this is done, you can see what the best parts of the store are in non-peak times. This will help you decide where the dead space is in your store (and if it's location-related or product-related. Closeouts and Sales The natural move in the fi rst quarter is to sell off ex- cess inventory, but there is a way to sell through goods without margin degradation. There will, of course, be leftover inventory after the holidays. But there are also events to move goods that remain after the holiday season. Super Bowl, Valentine's Day, St. Pat's. Create gifting items around either bundling older SKUs or baskets. Run some sales and events. What always draws big attention is hourly markdown events. It works like this: run a promotion between 11am and 4pm. Every hour take an additional fi ve per- cent off the items on sale. What this does is two fold. First, it creates a sense of urgency for goods. Does the customer buy the good now at x-percent off, or wait an hour until it is at y-percent off? The risk is that the good will be sold. This pushes sales and also helps to move goods with excitement. The Reality Our business, for better or for worse, is really a 300- day practice session and a 65-day game. We have to maintain for most of the year and hope that the season pans out as planned. This is your business, but with a few clever and retail science driven exercises you can have a good fi rst quarter to continue to take pressure off in the coming months. Editor's Note: This column originally ran in our sister publication, Beverage Dynamics. R E T A I L S E R V I C E 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. Here We Go Again! Yet another year has come and gone.