Algorithms: 1. Humans: 0.
So it will be in the wine aisle when the new 365 store by Whole Foods opens in two weeks. The store aims to target millennials by delivering foods in the Whole Foods ethos but with out the Whole Foods price tag (insert your own Whole Paycheck comment here). There will be fewer products in the stores and fewer employees. In an article in today’s NYT business section, the author compares the new 365 stores to Old Navy with Whole Foods being the Gap. No word on what that means for the wine section, but I’d bet on lower-priced offerings in a variety of formats.
The first 365 store will be opening in Silver Lake, ground zero for hipsters in LA (Moby has a vegetarian restaurant there). Hilariously, some Silver Lake residents had been hoping their neighborhood would be served by a “regular” Whole Foods and at some even mounted an online protest derisively calling the forthcoming 365 store “Half Foods.”
The NYT story provides more details on the store and its robots. There will be a tea-dispensing robot. But more to our purposes, the staff that linger in the wine aisle in Whole Foods that sell wine will be 86’d. In their place will be iPads.
The iPads will run an app developed specifically for 365 stores by the engineers and designers of Banquet and Delectable. Here’s how spokesperson Julia Weinberg put it in an email:
What we built for Whole Food’s new 365 stores draws upon the Banquet foundation, but is actually an independent product we are launching with them. It is an iPad-based in-store guide that is a hybrid of Banquet and Delectable. For their new 365 concept stores, Whole Foods approached us to help reinvent the way store guests experience and navigate the beer, wine and spirits section. The genesis of the project was the goal to find a better solution to the antiquated retail hang-tag model.
Since Banquet and Delectable have the ability to purchase wines from various retailers, that feature will not appear on the new 365 iPads, which will favor navigating the in-store inventory. Customers will also be able to scan any wine and info from the Delectable database will appear, including user reviews.
While the human touch is always nice for consumers, this approach actually sounds promising. I like Delectable, so the 365 team made an astute selection. The hardest thing may be actually getting the consumer to engage with the iPads instead of just judging wines by the label art, a common supermarket shopping strategy. Now all the store needs is a machine to spit out wine samples and the wine aisle will be the most happening spot in the store.
Flatiron Wines, a boutique wine shop in the shadow of the Flatiron building, will be opening a new location in San Francisco in January 2016. The shop is one of my favorite wine shops in the city. (Check out my post from when they opened in 2012.)
Jeff Patten, an owner, said that the new store will have the same focus as the Manhattan store, “just bigger.” It will have in-store tastings, sell spirits, and stock a similar range of small-production wines from the US and abroad. Patten said that it will give them the opportunity to better serve their existing California clients as well as to attract new ones.
The new store will carry the same name, Flatiron Wines and will be in the Palace hotel at 2 New Montgomery Street. Beau Rapier, a manager from Manhattan, will be moving to SF to oversee the new store.
It’s an interesting development. Mostly, when wine stores expand to other states, it is big box stores. But here’s an independent shop going bicoastal. We’ll have to keep an eye on their progress and see if any others get similar urges to look West–or California shops who might decide to look East.
Manhattan: 929 Broadway (bet 21st and 22nd), New York, NY 10010. 212-477-1315
SF: 2 New Montgomery Street, San Francisco CA 94105 (opens January 2016)
The topic of wine futures has roiling the wine world recently. Yes, the lackluster campaign for Bordeaux 2014 futures has shaken some corners. But what I’m talking about here the payment and then non-delivery of futures at Premier Cru, a retailer in Berkeley, CA. Wine discussion boards have bubbled over with frustration as consumers have paid money to secure wines–some as long ago as the 2008 vintage–and are still awaiting delivery. Futures are tricky; complaints of non-delivery of wines sank 1855.com, a French retailer, into bankruptcy.
It’s great that the NYT’s The Haggler columnist, David Segal, took up the issue in today’s paper. While he provided an overview of wine futures and the situation at Premier Cru (including a few bons mots), he didn’t reach a resolution as the column often does while advocating on the behalf of consumers. Segal promises a second part of the column to follow next week.
In anticipation of next week’s column, if you are among the aggrieved it’s a good opportunity to further articulate your problems. There isn’t a comment thread on the article but you can comment elsewhere or write firstname.lastname@example.org. Let The Haggler know your issues!
The good folks over at NPR’s Planet Money had a short piece on pricing at jewelry stores recently (Episode 572, mysteriously not on their website). Frustrated with why jewelry stores hide the price tags of items in the case, the reporter wondered whey they would do that. It turns out that then shop owners can pull out a piece that a consumer expresses interest in and then tell the backstory.
So it made my wine mind wonder…why don’t boutique wine shops do that? Read more…
Eataly Wine will close for six months and its owners, including celebrity chef Mario Batali, will also pay a $500,000 fine per an agreement with New York state authorities yesterday. No date has been set for the start of the closing. The settlement resulted from the State Liquor Authority’s enforcement of a ban on “interlocking interests.” The SLA also claimed that the shop’s owners suppressed that information.
The turn of events is somewhat puzzling. It was no secret that Joe Bastianich sold wines that he made at his winery in the north of Italy. Indeed, the shop’s web site trumpeted the fact that he “returned to his roots in northeast Italy” where he is “creating wines” in Friuli. (That wording has now been removed.)
Crain’s NY reports that the issue came up at the time of the shop’s license renewal in 2012. At first, the owners disputed the charge but later relented. The penalty also includes the removal of Lidia Bastianich from Eataly Wine’s license.
The issue is what the “three-tier system,” which prevent vertical integration in the wine and spirits industry. This means that producers must sell to licensed wholesalers who, in turn, sell to retailers. (While there may be some gray area around this, the only clearly legal bypassing of this is where a producer can sell directly to retailers in the same state.) Thomas Pinney writes in A History of Wine in America, that this system came into effect after Prohibition because of the “deep suspicion” of the liquor trade at the time; further, states were determined not to allow the producers to control retailers, as they had in the old saloon system.
While societal “suspicion” of the industry may have diminished, for better or for worse, the ban on vertical integration remains, as the penalties on Batali & Bastianich reflect (for their retail operation; it will be interesting to see if Illinois authorities take a similar view of the Eataly Chicago wine shop.). However, methinks they will not become a cause célèbre for the reform of the system. Read more…
Gmail introduced some filters last month that pre-sort your email for you: if you’re not one of the half a billion users, emails that seem like bulkmail now get automatically sorted into a “promotions” tab out of the main inbox. I personally like it as it means fewer distractions. I check in once a day for 30% off skinny jeans coupons and discounts on backpacks at REI.
But I may be an anomaly since there’s an article in today’s Times that has a lot of hand wringing from email marketers. Apparently they feel that the “promotions” tab is tantamount to Siberia. The story didn’t have any actual data about a decline in open rates but it did mention that a few companies are clamoring to get dragged out of the promotions tab and waving special discounts to consumers to do so.
The wine industry has grown increasingly fond of email marketing in recent years, perhaps too fond as some retailers pummel inboxes several times a day with flash sales, special offers, and even just regular old offers. If anything, wine emails still seem a blunt instrument, spewing forth a barrage of offers, ranging from sweet to sparkling and every hue of wine. Wine emailers could take a lesson from Gmail and pre-filter offers higher up letting consumers just get pings about regions or styles of wine they are interested in and dropping other emails. There’s so much talk of mining consumer preferences, the one-size-fits-all model for email marketing seems from a bygone era. By maybe after the Gmail filters, email marketing itself may be taking a hit.
What do you think about wine sales emails today? If you’re a consumer, do you get too many? And if you send them, how has the Gmail filtering affected your open rate or sales? Oh, and if you subscribe to this blog’s posts using Gmail, be sure to drag them into your “primary” inbox. 😉
The Senate is likely to pass a measure to have retailers collect sales tax for orders shipped out of state. The issue has been a hot-button issue since many big-box retailers perceive that online-only retailers have an unfair advantage and they have brought their largesses behind this tax equalization issue at the federal level. How would the Marketplace Fairness Act affect wine sales?
The answer is: probably not much.
Although wine e-commerce (hello, 1990s term!) has been growing, it is still hamstrung by regulations. Wineries can only ship to 36 states while retailers, who have much broader and more compelling offerings, can only legally ship to 12 states.
The other factor is shipping. If you buy a few bottles on the way home, you pay sales tax. But if you poke around online and throw some items in your virtual cart, you have to pay shipping even if you don’t have to pay sales tax currently. Let’s say the store charges $20 a case shipping, which is customary in the northeast for in-region shipments. If you’re buying $10/bottle wine, shipping is 16%, so it is almost prohibitive (unless the deal is extraordinary). If you order more than $300 worth of wine to have the shipping be less than the sales tax (assuming 7% sales tax). (Still, the online price may well be a lot cheaper than the in-store price, a phenomenon we have discussed before so it could be worth it.) If you’re ordering $300+ cases of wine, paying 7% sales tax is probably not a deal-breaker.
Such a law would therefore stand to impact wines north of $25/bottle and stores in New Jersey. Why sotres in New Jersey? Because if you do an online search for a wine, one from the Garden State usually is one of the cheapest available. Maybe there would be more shipping discounts in the wake of sales tax collection? But some of the lowest-price retailers are already extremely lean margins.
What do you think–how would the proposed sales tax bill affect your wine purchases? Or the wine industry writ large?
It’s January. There’s snow on the ground and the temperature dipped into the high teens last night. What’s a wine enthusiast to do? Why, try to freeze some wine, of course.
I wasn’t intent on making a wine Slurpee. In fact, my motivations were more in the name of science. Or pseudo-science. But what I wanted to know is whether wine would freeze if left out in a variety of circumstances that simulate delivery or shipping conditions in January for much of the country. Read more…