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Oct 31

Operating in the face of adversity

I thought last year was rough. Here I am about ready to start the month of November 2013, and I feel completely battered, exhausted, alone. A lot’s happened this year, much of which I’ll save for future blog topics. Those of you who are friends with me on facebook have an idea of some of the challenges. Simply stated, I’ve made a lot of mistakes due to inexperience, despair, frustration.

My dad always said that retail was a rough business. He grew up in a family that owned and operated a grocery store that experienced growth to several locations throughout his life, and closure before he reached the age of retirement. Despite this, he always had strong support from family and long-time friends. (Something I lack.)

His grandfather first opened a retail store in 1917. His father knew only this occupation, my father and his brothers later taking over the business, doing what they could to keep up with the changing formats. They operated the first grocery store in Snohomish, Washington, that brought in checkers and single lane checkout. The first shop in town to open a meat market within the store, where cutters would make the cuts and package the meat individually. They were innovators within a town that I would know as home. (I admire the innovative, entrepreneurial spirit of my great-grandfather, my grandfather, my father. I strive to be like this.)

In later years, big box chains came in, with the ability to undercut on prices. Things didn’t go as well. Despite doing all we could to compete, it wasn’t in the cards. The people chose the chains over the family business. (This is something I now fear for my own business.)

Weeks ago, my dad and I sat and visited. Looking at pictures from 1917 to the present, of the family business. Talking about the challenges of running a retail store that relies on you doing things right, but ultimately on entirely on everyone else: Without customer support, there is no business.

Today, I find myself sharing my stories with him. The struggles of running a business when there are days that it feels the universe is working against me. I keep swimming, swimming, swimming, yet it feels like the current is pushing me further out, despite my efforts. I struggle. I am tired. I am making serious mistakes. I am pissing people off. There are people saying they won’t shop with me anymore because of a contest. A contest that I wanted to win in order to get a TV appearance on Evening Magazine for my small business. They didn’t like that I followed the rules by “campaigning” for votes.

I followed the rules. I marketed, I promoted. But a convenience in-and-out beer store to compete against a sit-down beer bar, that meant pulling out every possible promotion yet to remain within the rules. Did we win? No. The beer bar took the win, got the TV spot. Did they need the promotion opportunity? No.

I accept that my marketing efforts fell short, despite giving it my all. I never expected the half dozen people giving me such verbal and written backlash about my campaign efforts, “Bribery!” “Un-American!” “No integrity!” These accusations, tearing at my soul. All I was looking for was a way to promote my business in the face of adversity. And apparently all I have done is brought greater adversity upon my small business. I am at a loss. The prize? A television spot that’s a sure-fire way to draw in new customers. The promotion? Backfire. People angered that I would reward my customers for voting. They didn’t care that CityVoter’s contests are “campaign-driven” they wanted the winning business to win solely on merit. Some spoke out so violently against my campaign. They’ll be happy: We didn’t win.

So I’m back to the drawing board on how to attract new customers to craft beer, on a meager budget. Only now I have a few more people pissed off at me. It seems that so much of what I’ve tried this year has been a physical-mental drain on myself, with little positive result. I am truly operating in the face of adversity.

Customers = Business

So I sit here, looking at articles online, perusing books at the library and in the book store, talking with others who own or who have owned small businesses. I pose the question, “How do you attract and retain customers, when corporate chains are edging in?”

In store: I assist. I do my best to look out for each and every customer who shops at my store. I put in everything I’ve got. I wear many hats: Customer Service, Office Manager, Accountant, Marketing, etc. (Anyone who’s owned a small business knows that every role falls onto your shoulders.) Despite giving it my all, the criticisms still come. I find myself in tears.

The stress of the future impending opening of a corporate chain, a multi-billion-dollar wine-liquor-beer store that’s coming to the city my small business is in.

I try to identify ways to market a small specialty beer store against $3.2 Billion mega liquor chain.

What do the people want to hear?

What do people want?

Customer Service.
Craft Beer.
Convenience.
Good Prices.

Quality.

Customer Service

My system for customer service goes like this: Treat others how you’d like to be treated. Greet each person with a hello. If they appear to need assistance, offer it. Be available, but not pushy. Treat your customers as guests.

When I’m shopping I prefer to shop on my own, with little sales interference, but to have competent sales folk accessible if I need assistance. I absolutely abhor pushy sales tactics. I don’t mind speaking up to ask a salesperson for help.

There are many people who don’t shop like me. Many want their hand held throughout the entire shopping process. There are many days that I do this. Often the person I am helping turns up their nose at everything I suggest, only to select a bottle because of its “pretty label” despite having a beer that they’ll likely drain-pour because it’s not like any flavors they’ve said they enjoy. These are times where you have to let go. Sure, it’s frustrating to walk someone around for twenty minutes to have them buy nothing you recommended for their personal preferences… but you have to let it go.

Something else I’ve learned in running a retail business is that there are a lot of people who don’t know what they like. This can be a challenge. What type of beer do you normally drink? “I don’t know.” Is it because they’re embarrassed to say, “Budweiser”? Or, do they truly have no idea of what they put into their body? I try to pull them out and engage, “What type of beverage, non-beer, do you normally drink?” If it’s coffee, soda, juice, milk, or something else, likely I can identify a beer that’ll be to their liking. Sometimes they’ll go for a little mix pack so they can try a few different styles to see what beer’s to their liking.

(I see several folks at various holidays and birthdays throughout the year, asking me to select beers for their loved ones. I love this aspect of my job. What I love even more: Seeing their loved ones return because I did a good job!)

I love working with people who seek out new flavors, new-to-them beers. I enjoy hearing their stories, upon return, as to what they liked or didn’t like. I am merely a guide, a helpful director, on their adventure into craft beer. I love this.

The adversity? I receive email about a bad customer service experience or see one posted online. Sometimes I remember the customer and am really surprised to see the poor review: Our interaction in store not out-of-the-ordinary. Oft times they were greeted, offered assistance and declined. As a result, I have learned not to trust poor online reviews.

This is where I am at a loss.

Because my business didn’t meet their expectation, it is given a bad review. Yet they do not state what their expectation was. The one that sticks out most in my mind from this year simply said, “Worst owners ever!” I had waited on the gentleman several times throughout the years and never had a clue that he was viewing me so terribly. In fact, I thought all our interactions were pleasant. Serving customers daily can be working in adverse condition. A friend recently said, “Everyone in the world should be mandated to work retail for two years of their life. It will give them insight on how to treat others, and how to be forgiving.” She has a point.

I feel broken.

The customer who is there with her friends, to whom I’m serving samples, looks at me with a slight scowl and says, “We don’t like you.” Yes, she really said that. Not once, but three times. Months later she and her friend start showing up at my weekly outlet: Zumba class. I stop attending. I am sensitive. All that cycles through my brain, “We don’t like you. We don’t like you. We don’t like you.” What have I done to this lady? I have served her samples, told her about the beers. But my personality, a bit introvert, shy, a wallflower, a bit socially awkward. I’m not jovial like the friend who used to pour for me. But times have changed and I can’t afford to hire in a jovial person to pour beer for a tasting event on which I’m barely hitting break-even.

The customer who comes in, who used to stop in every two to three weeks, yet I hadn’t seen him in nearly three months. He says, “I’ve been shopping at Total Wine & More. They do something that you should do: They group their beers by style. I only like drinking Porters, so I can go and get what I want quickly. If you reorganize your store I will shop here again.” I explain to him why we’ve chosen to organize the store by region and brewery. I point out the red dots on the price tags that will provide him with quick way to identify the porters and stouts in the shop. He doesn’t care. He wants me to rearrange my entire shop to meet his wants. He, like me, doesn’t want to talk to sales people when he’s shopping. He just wants to get in-and-out. He wants greater convenience.

I strongly feel our shop is about exploration, not as much convenience. But convenience sells, apparently. However we still have that parking issue when it comes to convenience. *sigh*

Craft Beer

That I have, and plenty of it. Last count was two weeks ago. At that time there were 1246 different beers (excluding duplicate beers in different packaging), 139 hard ciders, and 24 meads. That’s not counting the additional vintage beers that are in the cellar, it’s solely what’s currently available for customers to purchase. Today when I go to work there will be even more new beer, plus seasonals. Likely there’s closer to 1300 beers in stock at this very moment.

Convenience

What is convenient for one person, is not convenient for another. This is clear in the proposal by the customer that we should rearrange the entire store to meet his needs. What did he think about our reasoning for arranging it by region and brewery? For him, he wasn’t so interested in going outside of Porters. From my experience, people who like Porters are likely to venture into similar styles. They are more apt to do this if the beers are grouped by brewery. They say, “I really liked this porter. I see this brewery has other malt-forward styles: Scotch, Brown, Stout, Old Ale, Dubbel, Quad. I will try them as well.” It opens up a whole new world of flavor experience to the beer drinker, you get to see their eyes brighten and their excitement for craft beer grow, as they start a personal tasting adventure. It’s really exciting to see, to be a part of their journey.

If I were to reorganize my entire store to be classified by style, this would be lost.

His response? “Put up signs in the porter section to say, ‘If you like Porters, check out our Scotch, Brown, Stout, Old Ale, Dubbel, and Quad sections.’” Funny, this coming from a person who never read the signs in store that indicate all he had to do was look for the red dots on the price tags to quickly identify the Porters. Most people don’t read.

Parking in our center isn’t always ideal. We are next to three eating establishments, so lunch and dinner time means driving around a little to get a nearby parking spot. But there is nearly always parking on the side of Sportsmans, straight down the sidewalk. I always make sure the people who complain to me about the parking situation are aware of this. I worry about the inability to park in a front-row spot driving customers away.

Kegs are advance order, as are most cases. Because we have a small location — 1245-square feet that includes backstock and cellar storage, cooler, and a tiny office. That’s not a lot of room to store beer. Likely a good thing: Seldom does beer expire or “go bad” under my care. Most of our beers come in one case at a time; this is how we can have over 1200 beers in just over 1200 square feet. However, this means customers need to plan ahead if they’re getting cases and kegs for their parties from my beer store. You’d be surprised how many people throw last-minute parties… or just don’t plan ahead. Placing an order Tuesday morning for Friday evening pickup is too long of advance timeframe for many. They snip at me. I take a deep breath, I say my mantra, “Let their anger roll off me like beads of water off the back of a duck.”

“I want to drink while I shop.” This is a challenge, per se. I never intended to open a tavern. The general consumer doesn’t understand that one “bottle shop” is licensed as a “tavern” while another is licensed as a “specialty beer store.” The latter, pure retail and allows all ages to enter (they can bring their kids along when shopping at my store). The former, a bar that is also credentialed by the State Liquor Board to sell to-go. Though both are “bottle shops” they are two entirely different beasts when it comes to operational model, licensing, health board, operating margins, insurance, etc. It’s like comparing apples to oranges — both are fruits, but they taste very different. You may prefer one over the other, but that doesn’t mean the other is “bad.” Yes, I’ve had people tell me my store is “bad” because we don’t serve, because it’s not a tavern.

…I listen to my customers. Instead of just one night a week for beer tasting, we now offer tasting every day, 58 hours a week. That’s a lot of time to drink beer while they shop. (However, as a retail store I can only serve them 10 ounces maximum daily, in 2-ounce sample pours.) About 20-30 people take advantage of this each week. What surprises me most is that the people who were loudest in complaining about not being able to drink while they shop are the majority of those who don’t participate. Complaining about lack of service/product doesn’t mean they want the service/product. This is something I have a hard time grasping as a retail shopkeeper. If I ask for something, it’s because I want it. If the business changes to offer it, I’ll use the service/product. People confuse me.

Good Prices

This is an area that I do pretty good at. The prices at my beer store average nearly a dollar less on many large-format 25.4-oz bottles than other small business competitors who are 20-30 minutes away.

As for competing with the $3.2 Billion dollar chains, yes, there are things that they can under price me on. I cannot operate a small business on 10% margins. In order to operate on that, I’d need to sell three to four times the volume that I sell now in order to pay rent, excise taxes, employees, product, and other operating expenses. And that’s just to hit break-even, not profits to stick away in the bank for slow times or the unexpected (equipment failure, health issues). It’s simply not feasible.

This is where operating a small business is tough to compete with big business.

This is where you see a lot of small businesses put up the “going out of business sale” signs when the big business comes into their region. This is why I worry when the mega-liquor chain has announced that they’ll be opening twenty blocks from my store. A chain store can afford to take losses at one location, allowing other locations to sustain it, while they work on edging out any competition in their region. This is where I ask: How can I maintain my existing customers and attract new ones? Though we have some “equal playing ground” most marketing and business seems to be pointing to the advantage of the large chain.

Quality

I’d think quality would be a bigger priority of shoppers, but it isn’t. We live in a day of disposable furniture, clothes that aren’t expected to last. Despite the fact that food tastes better fresher, most eat assembled fast food (I’m included) full of chemicals that preserve. Most of us don’t shop for “quality.”

I see more grocery stores edging into craft beer. I regularly check out bottling dates, storage conditions. Most are stored under florescent lights, some are past date. I’ve seen some as old as two years. Serious. As a steward of craft beer at a specialty shop, this infuriates me. Someone is going to buy this and say, “I tried craft beer it was terrible” or “I don’t like that style” because of this bad experience with bad beer.

Monday was my first venture into one of the large chain liquor stores. I’ve been avoiding going in them since they appeared in Washington State last year, because I expected it to be a major downer. How can I as a small business compete with this? I don’t have deep marketing pockets. I can’t financially compete with 10% markups. What I saw wasn’t so scary as I’d built it up in my head, in my heart. What I saw: Late spring and early summer beers that should’ve been closed out and put on sale months ago. Prices that were, overall, competitive to mine. A cooler filled with mostly mass-produced fizzy yellow beer, with the majority of craft beer living on the ambient shelving — even those with lower alcohol volumes that should likely be in the cooler. I’m still nervous about the big chain opening nearby, but I have a better idea what to expect. They advertise at over 1200 beers, but in fact, is it over 1200 SKUs. SKUs are different packaging, not different beers — it is misleading to the consumer. But the overwhelming majority of people believe what they’re told or what they read, without fact checking.

I’m a fact checker; I’m a rule follower. I’m an odd man.

Since the privatization of liquor in Washington State, more than 50% of the small liquor shops have gone out of business. In effort to stay afloat, the majority of the remaining shops have converted into C-stores (convenience stores) by adding the following to their liquor offerings: chips, wine, craft beer, growler fills. Many don’t maintain clean draft systems. I’ve had regular customers who I’ve not seen in months return to tell me, “I’m getting growler fills at (former state liquor store) but it tastes a little funny.” Yet, due to convenience (proximity to their home or work), they continue to give money for off-bad beer. I don’t get it, but it happens.

People sacrifice quality for price and convenience.

How does one compete with that?

Customer service. Maybe. But everyone’s idea of good service, each person’s expectation of good service, is different.

I think about my dad’s business. In the end, was there anything that could have been done different to better position the store to better compete against the corporate chains? I worry for my own business. I ponder the adversity, the things we have operating against us. I think about rising operating costs and how to remain competitive despite the naysayers, the people who say “I want to put you out of business” and “I don’t like you.”

I worry about my own inexperience. My own personal shortcomings with customers, with staff, with my partner. I worry because I am feeling burned out and overly criticized.

Yet all I want to do is get people into delicious craft beer, to help them on their personal adventure. To run a viable business that’s able to support itself and its staff.

So much adversity to deal with, and all I want is to share this wonderful thing: Craft Beer.

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