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April 3 2006
Is static pricing dead at wine shops in this country and arewe better off with going with the haggling that is prevalent in car buying, orbetter yet, will we see the days of a Priceline at our local vino purveyorwhereby we name the price at which we are willing to buy?
I live in the Midwest. While I am more than a bit jealous that Dr. Vino has such an abundanceof 1st class wine shops at his disposal, the reality is that I ammore often than not shopping at a couple of liquor stores with expanded winedepartments alongside trips to CostPlus World Market, Trader Joe’s, Costco andSam’s to buy my wine. That is to say, Ibuy my wine from a lot of different places—in marketing speak, I supposed I ama multi-channel customer.
I used to buy a lot of my wine from one of the less thenfive places in town that you could actually call a quality wine shop. It even has ‘Fine Wines’ in its name. I used to buy better than 75% of my winefrom this local joint—a place that exists less than a mile from my home.
I felt good about supporting a local business and I feltlike though I might not get a great bargain, I wasn’t getting fleeced.
I stopped shopping at this wine shop at the first of theyear deciding to spread my money around and as a bit of protest for somedisingenuous activity (more on that in a second).
After working late this past Friday, and really hankeringfor a quality micro-brew, I was pressed into re-visiting the formerly forsakenwine shop in the name of convenience.
Well, a trip for a six-pack of Scottish Ale really turnsinto a trip for a six-pack AND whatever might grab my fancy from the winesection.
I was in the Pinot Noir section and looking at a niceChalone Pinot Noir. $13.99—I like anice Pinot and Tom at Fermentations has me drinking more Pinot just so I cansee if they’ve cut any Syrah in there to make it more robust.
Well, when I went to check out, I must have mistakenlygrabbed the “Estate” 2004 Pinot instead of the Monterey Pinot because it rangup at $31.99. The clerk looking at mewith some level of dumbfoundedness explained that usually Estate bottlingscost, “At least $25.” Hmm. My mistake. In the approximate 40 bottles of Chalone Pinot Noir and the one pricetag of $13.99, It must somehow be my mistake. I took the Monterey instead and slunked out of there feeling like theguy that wants an Acura, but can only afford the Honda Civic.
This isn’t the first time that I’ve taken issue with thisshop, and the reason that I’ve elected to take my business elsewhere.
In November of ’05, right around Thanksgiving, I purchased aSanford Pinot Noir and a Rombauer Zinfandel. The Rombauer, I’m particularly fond of. It’s about $22 a bottle and very, very nice with a lot of complexity.
At least I thought it was $22. It was $22 when I bought it there before and it was $18 inCalifornia when I enjoyed it with friends the previous weekend, but oddly, thebottle from the unpriced and open case sitting on the floor, upon check out,came to something like $31.99. For thesame vintage I drank the week before in CA for $18 and the same vintage Ibought earlier in the year for $22.
Now, at the check out, mind you, I was a bit surprised. A $10 price discrepancy seems a bit muchwithin the same year. I bought thewine, went home and searched www.winezap.comfor it. Lo and behold, virtuallyeverywhere, this wine was selling for $18 - $22 a bottle.
I went to the web site for the wine shop and submitted aninquiry (a very polite inquiry) to the customer service section asking forclarification on the price discrepancy between my previous purchases and mycurrent purchase juxtaposed against the pricing that can be had nationally.
What I received back was a response from the owner thatlanded somewhere in between rant against distributors (complete with every winedistributor from my state copied on the email) and a preservationist tacticindicating that he would, “Never apologize for making a profit.” Dale Carnegie this was not.
This is all well and good and a blip on the radar in theways and means of consumer satisfaction, but it got me thinking that #1 mytrust has been broken and I don’t feel like I can trust this wine shop—at leastnot from a pricing perspective. Whenyou tell a consumer that you won’t apologize for making money when the consumeris taking issue with what appears to be a sharp discrepancy against pricing,you’re effectively telling this person that profits are more important thenyour business.
Does this mean that the business of wine shops aredead? No, in fact, I would argue thatwine shops are needed more now then ever. But, what may be broken, in a business in which the customer has toimplicitly trust you is the pricing model. In an era of Winesearcher.com and Winezap.com, it’s not enough to have agood selection and a good location, you have to have either A) An incrediblepoint of differentiation or B) Excellent pricing.
Sadly, I don’t think this wine shop gets it, because thereis not an incredible point of differentiation and the pricing, near as I cantell seeks to help me with my latin: Caveat Emptor. Because while thespecials are all price competitive, it is my belief that the specials are thebait and the rest of the inventory is the “switch.” Afterall, even the most strident wine consumer can’t rememberretail pricing for thousands of brands.
For a laugh out loud, fun read about dishonesty in wineretail, check out this long piece from November in the Dallas Observer.
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