Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
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proceed. "It's now not a ques- tion of 'if we're going to check IDs,'" he said, "that's lifted a level of liability off my shoulders. (He can override this feature if an obviously older customer objects.) Though he hasn't set up his customer-loyalty program up yet, Maple pointed out that, if a customer is already swiping their driver's license, a retailer can use that to track customers' purchase histories – "We pretty much know what every customer has bought," said Maple — and have the customer-rewards system work automatically, without clerk or customer having to remember to swipe a separate shopper's card. The Washington Retail Experiment brand-new liquor retailers have had to set up their businesses in the same market, one with its own specialized reporting requirements. "I wish that an economist had thought to do a study," said Rick Crudo, a computer consultant based in Seattle, WA, "because what we had here was hundreds of new retailers open- ing similar stores, all aiming to open on the same day. There would have been a lot of data there as to which business decisions work well and which don't." What Crudo is talking about is the privatization of liquor retailing in the state of Washington. Before June 1st, 2012, Washington was a control state, meaning the state was involved in the wholesaling and retailing of liquor within its borders. Before June, liquor was sold only by 167 state-owned stores and 163 "contract stores," businesses, usually in sparsely populated areas, that contracted to act as agents of the state. Those con- tract agencies were given the option to buy the busi- ness and the 167 state-owned stores were auctioned off to private buyers as well. (Retailers with stores 10,000 square feet in size or more can also now sell liquor.) "So, you had 167 people who had bought the license for a state store at auction," said Crudo. "They could take over the lease of the store's current location, renegotiate or move. They could open their stores on June 1st." R When it came to a POS system, these new retail- ers, including the contract agents who had previously ecently, a large group of used a state-run system to record sales, needed a system that could handle new and confusing reporting required by the state as well as a tax and fee struc- ture that included paying the state 17% of their sales, a retail sales tax of 20.5% and an additional tax of $3.77 per liter. Crudo shakes his head at some of the newly minted retailers, some of whom had had no prior retail experi- ence. "When they would call me, they'd ask only, 'How much will it cost?' and 'Can you have it up and running by June 1?'" One retailer who knew better was Kyle Contreras, who bought his liquor agency business from the state. As a former liquor agent, Contreras knew about the state's new reporting require- ments were likely to be complex. He had his accountant look for a new POS system for him. "She knew exactly what she needed for taxes and reporting," he said. She recommended Innovative Computer Solutions (ICS) (see guide), a company that specializes in systems for beverage alcohol retailers. He also started the switch to his new computer sys- tem early. Even before the June 1st opening day, he had the ICS system running side-by-side with the state sys- tem for the last two weeks of May to test the new system and work out any problems. Things are working well at Contreras's store, now called Yelm Liquor & Beverage, and he is excited about the future of his computer system. "We have been working with ICS and have been learning a lot," he said. "I think this is the best system on the market for liquor stores. There are features I haven't even gotten to yet." Rick Crudo, meanwhile, worked with a number of the new retailers, in conjunction with RITE. "Microsoft RMS is a good platform tool and Rick Feuling, [founder of RITE] is a computer expert whose family is in the liquor-store business," he said. Crudo once wrote a "white paper" about the three generations of POS-system ownership, about what retailers learn through experience when it comes to this investment. "Retailers need to listen to more than what the price of the system is," he said. "They need to look at each line item when it comes to buying a system and ask themselves, 'What's the investment, here? What's the reward? And is it worth it?'" s 36 • Beverage Dynamics • www.beveragedynamics.com • September/October 2012