With customer loyalty programs now widespread in so many areas, leading retailers say the schemes have become essential to their businesses. Customers love the perks, and the programs clearly boost retailers’ bottom lines by building faithful consumer bases. “Rewards members spend more money than non-rewards members,” says Fontella Hardman, marketing director at Florida’s Wine World chain.
Many beverage alcohol retailers have offered loyalty programs for years, but as technology and data-mining capabilities have improved, so too have loyalty plans, with some evolving into rewards programs. “Our initial Viscount Price Advantage Card (PAC) program was implemented in 2002 as a loyalty and savings program,” says Carol Torresson, an executive assistant at Viscount Wines & Liquor in Wappingers Falls, New York. Torresson was involved in the program’s launch and continues to work on its development, noting that four years after its unveiling, the PAC program evolved to include a rewards component, and today it boasts some 123,000 members.
Viscount’s free rewards program offers members one point for every $1 spent. After reaching 500 points, a member receives $10 off a future purchase, and at 3,000 points, $100 off a purchase. Torresson says the loyalty program also offers discounted prices on thousands of items, such as $2 off regularly priced Tito’s Handmade vodka ($35 a 1.75-liter). Viscount plans to add even more perks in the future, including bonus point days and times, as well as product-specific bonus points. “We’re also looking to do more product- and customer-specific communication, such as alerting a customer who has purchased certain products to either the availability or pricing of something that they might be interested in,” Torresson says.
The “Wilbur’s Card” at Wilbur’s Total Beverage in Fort Collins, Colorado was unveiled about 15 years ago, according to owner Mat Dinsmore. Today, membership stands at approximately 97,000 customers. Members of the no-cost program receive discounts on specially tagged items—such as Brugal 1888 rum, which was recently offered at $30 a 750 ml., a $10 savings—as well as accrued points on each purchase. For every $1,000 spent, members receive a $10 voucher and a 15% off coupon in the mail. “In general, we send out $10,000-$12,000 a month in $10-off coupons,” says Dinsmore, who notes that membership has significantly increased over the years.
In Chicago, Garfield’s Beverage Warehouse has offered its “VIP Club” loyalty and rewards program for about ten years, according to Scot Stadalsky, the franchise’s wine buyer. “In the beginning, customers weren’t excited to join another club,” he says. “But with all we have to offer now, getting people to sign up has been easy. Who doesn’t like to feel special and save money?” The complimentary program allows customers of the five-unit chain to earn one point for every $1 spent. After reaching 500 or more points, members receive 1% off their next purchase. The program—which has now enlisted more than 10,000 members—also offers a 10% discount on the purchase of six mix-and-match bottles of wine.
Other retailers, meanwhile, are relatively new to customer loyalty programs, and that has allowed them to capitalize on the latest advances in technology. For example, Wine World—which has five retail stores and seven on-premise venues in northwestern Florida—launched its free “Rewards Club” program just last year, and by November had already signed on some 18,000 members. “We felt it was crucial to ensure our customers would be able to accrue and spend points at both our on- and off-premise locations,” notes Katie Wise, director of retail at Wine World and the company’s Wine Bars and Craft Bars. She explains that because the on- and off-premise concepts have differing p-o-s systems, unveiling a single loyalty program was complicated.
After a year of research, Wine World located the AppCard device, which allows customers to sign up via text message or email. Most importantly, the device can be implemented in both the retail and on-premise venues. In the Rewards Club, members earn one point for every $1 spent—with double points offered on some items—and after earning 500 points they receive a $10 voucher that can be used at any of the company’s locations. “One of our goals was to make retail customers into restaurant customers, and vice versa,” says Wise, noting that if a member orders Michter’s Bourbon at the Craft Bar, for example, he or she may receive a coupon for $2 off a bottle of the same whiskey at Wine World.
In Minnesota, 11-unit retailer Haskell’s launched its “Rewards” loyalty program in 2016, and by late last year it claimed some 13,000 members. The program, which carries a $20 annual fee, awards one point for every $1 spent—along with double- and triple-point opportunities—and members receive a $20 Rewards coupon for every 500 points earned. “Getting the Rewards program up and running was a big project,” concedes Kelly Rioux, loyalty program director of Haskell’s Bacchus Wine Society. But over the course of the last three years, she says, the program has been easily enhanced, and by late 2018 the chain was targeting category specials to members who had purchased those products.
Grocery stores are proficient in customer loyalty programs. Raley’s, the Sacramento, California-based grocer with 125 stores in the Golden State and Nevada, has offered its “Something Extra” loyalty program—which now has over one million members—since 2012. While beverage alcohol purchases do not contribute to the program’s points feature, largely due to California’s liquor regulations, Raley’s can still capitalize on the purchasing data it captures with the cards. “We think of unique and innovative ways to get customers coupons,” says Curtis Mann, director of alcohol and beverage. “If we know they bought Chardonnay, we’ll issue them a coupon for Chardonnay.”
State and local regulations can indeed challenge beverage alcohol retailers’ loyalty programs, particularly for multi-state operators. Total Wine & More, which has stores in 22 states, doesn’t offer a customer loyalty program in Kentucky, Massachusetts, Tennessee, or Wisconsin. The chain’s “& More Rewards” program—its most generous—is also its most widely available, while its “Total Discovery” customer loyalty plan is offered exclusively in Delaware, New Jersey, North Carolina, Maryland, and Washington. Other challenges with loyalty programs cited by retailers include software integration and employee training. “We work to make sure that our staff is knowledgeable about the program and how it works,” says Dinsmore of Wilbur’s.
Beyond rewards incentives, membership perks under the programs can vary. The ability to track a customer’s purchasing history is handy, says Tim Consadine, general manager at Boone’s Wine & Spirits in Eagle, Colorado, which markets “The Club” loyalty card. “If a customer comes in and says, ‘I had a good wine with a blue label,’ we can look back at his buying history to track it down,” he explains.
These days, when high demand for small-volume and allocated products is omnipresent, a number of retailers provide first dibs to their loyalty members. Wine World’s Hardman points to the 2017 Orin Swift Cellars 8 Years in the Desert ($50 a 750-ml.) as an example of an allocated wine that the Florida retailer offered to its members first. At Haskell’s, meanwhile, Rioux says that because the chain’s loyalty program carries an annual fee, “we need to keep people interested and retain their membership. Rewards members are pleased to have the first chance to purchase special releases, such as single-barrel Bourbons.” At Garfield’s, access to small-production brands is an important perk for loyal customers. “Whenever we receive a new, hot, or allocated product, our VIP list gets first notice of it,” Stadalsky says. “They’re so important to us, and they should be rewarded.”
Loyalty program members can sometimes benefit from early notice of store-sponsored events and even discounted tickets. Hardman points to Wine World events like last summer’s customer-appreciation sale, at which Rewards Club members could purchase one bottle of wine and get a second for just $1. In addition, members of the rewards program are able to save $5 off a ticket to Destin Crafted, a craft beer, Bourbon, and food festival sponsored every fall by the retail chain. Members of Haskell’s Rewards program, meanwhile, can get $10 off tickets to the chain’s popular Bacchus beer and wine cruises on the St. Croix River, offered three times each summer.
Perhaps the greatest benefits of loyalty and rewards programs are the data and insights they provide, which retailers can then use to market products to members. “Customer purchase history is an important tool for us,” says Garfield’s Stadalsky. “We can target emails based on past history.” In general, the more sophisticated the loyalty program, the more robust the ensuing data. Wine World’s program allows the chain to sort email and text message blasts to members at a very specific level. According to Wise, messages can target members who have shopped in the stores in the previous two-week period, or who have spent $25 or more during a visit, among other variables. At Raley’s, “the alcohol department uses our robust data to analyze incrementality of items in our department,” says Mann. “We then make assortment decisions based on the data.”
Leading retailers say that loyalty programs will only become more important to retailers and customers alike. “Retailers will rely more and more on the programs,” Wise says. “They’re a clever way to get the data we all want. We want to know what our customers are buying.” Viscount’s Torresson adds that with competition for the beverage alcohol consumer becoming increasingly fierce, “a successful loyalty program will become the key to customer retention.”