Pivoting during Lockdowns w/ Lauren McPhate, Tribeca Wine Merchants

In the heart of the Covid lockdowns in May of 2020, Lauren McPhate, Director of Sales of Manhattan based fine wine retailer Tribeca Wine Merchants (“TWM”), describes how they have pivoted and continue to work towards the new normal.  From changes in consumer purchasing and wine consumption behavior to adding a website chat function and partnering with other brands to do virtual events, TWM is successfully recovering most of their business after a near 50% drop at the beginning of lockdown.  

Detailed Show Notes: 

• Lauren’s background
• Director of Sales for 4 years at Tribeca Wine Merchants
• Started wine career in Hong Kong with Ginsberg & Chan, focused on fine wine
• Hong Kong is like the “wild west” vs NYC has more regulations and restrictions
• Tribeca Wine Merchants (“TWM”) overview
• Pre-covid business
• 80% through email / private client sales
• 20% through walk-in, store traffic - mostly locals, regulars
• ~1,200 sf store
• Fine wine focus, was buying Burgundy before it was popular
• Founded right before 9/11 - was able to secure more fine wine allocations
• 7 employees, 3 main buyers, most have tasted all the wines in the store
• Covid lockdown impact (as of May 2020)
• Last 2 weeks of March - NYC was a ghost town, everyone was in shock, the store was quiet
• People left Manhattan to their other homes (e.g. - Hamptons, Catskills)
• Revenue impact
• March - business down ~50%, “emails evaporated”
• April - down, but not by as much
• May - close to normal sales, but more hustle to get the same sales, tariffs on European wines more of an issue
• Web orders up 150%, but still does not replace in-store sales
• Pricing challenges with tariffs (and in general)
• Large step-changes often alienate historic buyers (e.g. - Domaine Perrot-Minot doubled in price from 2015 to 2016 vintage, people stopped buying)
• Buyers used to seeing 5-6% annual increases for consistent Burgundy and Bordeaux buyers
• Sourcing wines
• No more in-person distributor / importer meetings during lockdown
• Those who send bottles and moved to virtual meetings / tastings have been driven more purchasing
• Being consistent in buying allocations important - e.g. - when people stopped buying Selosse in the US after 9/11, he moved the allocations to Japan
• Many importers / distributors have moved allocations to open allocations (ie - First Come, First Serve) to sell through the wines
• Consumer behavior changes
• People still buying super allocated wines, but not as much in the $100-500/bottle tier, they are buying what they are drinking
• People broadening their purchases (lower budget, pricing) - e.g. - Australia, South Africa, Argentina (e.g. - Bodega Chakra selling well)
• Not bringing wines to dinners to impress people, just drinking at home; in NYC, you don’t get invited back to dinner if you don’t bring top, classic wines
• People not posting really high wines being drunk to not be “tone deaf” to the situation in lockdown
• Finding new customers
• Historically, Wine-Searcher and events were the primary channels
• In Covid - mostly friends and referrals, people looking to support small and local businesses
• Most customers 45 or 55+, so more on Facebook than Instagram
• FB and Instagram help drive sales -> posts of specific wines often generate sales activity
• Pivots during Covid
• Added chat function to website -> increased conversion, helps people validate what they are choosing is a good wine
• Experimenting with social media advertising - using the lookalike function doubled engagement of paid advertising
• Doing virtual events via partnerships (e.g. - Petrossian Caviar and Champagne masterclass) and corporate tastings
• Leveraging Zoom chat function to create connection and interactivity during virtual events
• Segmenting customer list to do more specific offers (which is mostly manual due to limited POS functionality)
• The “new normal”
• Virtual tastings to continue on both supplier and consumer side
• Believes brick and mortar retail will still be strong as people like to talk to people and look at the bottles