Darwinian Retail Theory: How Wine Shops are Evolving to Survive
Posted on Mon 21st Sep 2015 at 11:52
The traditional wine shop is dying, killed off by supermarkets whose cut-price offers and ‘stack ‘em high, sell ‘em cheap’ mentality have eroded both their consumer base and to some extent individual’s thirst for exploring the world of wine.
While the off-trade route is less viable than it once was, retailers are not giving up without a fight. Many traditional wine shops are now evolving in to on/off-trade models, which allow them to spend more time with customers and increase sales by providing an innovative service. One popular method of evolution is for wine shops to become venues for consumption of wine on the premises. This allows customers to enjoy the venue as an on-trade bar, then select their favourite wines from the selection to take home. Cambridge Wine Merchants, for example, have turned three of their four venues into bars, and seen profits rise by 13% as a result.
Interestingly, their co-founder Brett Turner told Harper’s magazine that ‘what people want to drink by the glass is very different to what they buy by the bottle’. This suggests that those moving to this model may need a period of experimentation before they hit upon the perfect wine menu. One thing that may help is an Enomatic wine machine, which allows venues to preserve wine in open bottles for several weeks, which circumvents the problem of supply being greater than demand on any particular evening. Although these machines cost a five figure sum, the enthusiasm from customers suggests it could well be worth the investment. Evolution is, of course, not easy. There is a huge cost implication in switching from retail to on-trade business, not least in finding the right staff to serve customers. The Oxford Wine Company, for example, hired an ex-Manoir aux Quat Saisons sommelier to provide advice to drinkers in their new cafes. There are also legal implications, such as licensing, to be considered, as well as finer details such as how to convert your existing premises.
Yet if Darwin proved anything it’s that evolution is essential for survival and, as more and more traditional wine shops take the plunge into mixed-use retail, it may be high time to consider joining them.