Believe it not, customer loyalty programs are said to date back to the late 1800s, and perhaps even longer. In any case, they’re certainly not a new tool to reward customers for their purchases and dedication, though loyalty programs are now hitting their stride within the retail channel as store owners large and small strengthen their efforts to retain existing patrons and attract new ones. From Hazel’s Beverage World with a single location in Boulder, Colorado to nationally prominent Total Wine & More, liquor store operators are fine-tuning and polishing their frequent buyer programs as competition continues to ratchet up.
“It’s our most valuable asset,” says Adam Silverstein, COO at Garfield’s Beverage Warehouse, with 11 stores in greater Chicago, of the chain’s VIP Club program. “It gives our customers a sense of loyalty. It gives us the opportunity to retarget and segment.”
These loyalty programs differ by concept from other retail businesses, often dependent upon state and local laws. Many, including Garfield’s, provide members with rewards, such as rebates off future purchases. The VIP Club—which launched so many years ago that Silverstein has lost track—began as a wine-focused program. But about ten years ago it was widened to encompass spirits and beer. Under the plan, purchasers receive 1 point for every dollar spent and are awarded a $5 rebate after reaching 500 points. According to Silverstein, points can be rolled over and the rebate doesn’t have to be used within a certain timeframe. Rebate redemption varies, he notes. “Some customers like to spend their reward right away. Others like it to accrue to 20,000 points,” Silverstein says. “It becomes a badge of honor.”
Florida’s ABC Fine Wine & Spirits also offers a points-based customer rewards program across its 125 stores, although points are weighted depending upon the products purchased. ABC Access Rewards is a tier-based loyalty program in which members receive five points for every $1 spent on some items and ten points per $1 spent on the chain’s exclusive Sourced & Certified Collection of wine and spirits. Members receive a $5 reward coupon, valid for 14 days, for every 1,500 points earned. Under ABC Access, “bronze key,” or first tier, members receive $10 off every $100 wine purchase (with some exclusions) and $10 off every $100 or more beer, hard seltzer, and RTD purchase. The $10 offer on wine has been popular, according to ABC vice president and CMO Sean Kelly, while the incentive on the Sourced & Certified products has earned “more visibility and sales for the items because guests know they can earn points even faster,” he says. While ABC has boasted a loyalty program for more than 20 years, the current version launched in 2019. ABC Access Rewards has more than 1 million members.
Everyday Deals
Some loyalty programs, meanwhile, offer members reduced prices on plenty of products every day. Hazel’s Frequent Flyer program, which provides members with instant savings on thousands of products, launched in 2012 when the store first opened. “From day one, we wanted to offer customers a loyalty program whereby they could instantly get a discount without any fee to being a member, along with earning rewards,” explains Hazel’s owner Bruce Dierking. Under the Frequent Flyer plan, discounts abound, ranging from the recent $11 for a 750-ml. of Canadian Mist ($13 for non-members) to $32 for the 2021 Charles Krug Cabernet Sauvignon ($38 for non-members) to $9 for a 12-pack of 12-ounce cans of 21st Amendment lager ($17 for non-members).
The deals run for long stretches, Dierking notes. “We don’t change the features weekly like grocery stores,” he says. “We want our customers to be able to access them whenever they shop.” In addition, members receive special pricing on select products every Sunday and Monday—as part of an effort to drive traffic to the store on traditionally slow days—such as the recent $27 for Nolet’s Silver Dry gin ($50 a 750-ml. for non-members) and $6 for the 2021 Grati DOCG Chianti ($12 for non-members). Members can also earn “Frequent Flyer” miles on qualifying purchases, and after reaching 500 miles, they receive a $5 store credit. Dierking credits the program’s savings for contributing to its popularity, as more than 90% of Hazel’s transactions are with loyalty members.
The prohibition of a points-based beverage alcohol loyalty program in Tennessee prompted retailer Frugal MacDoogal to get creative. Four years ago, the Nashville store—which has a sister location in Columbia, South Carolina—launched the Frugal Rewards Club whereby customers can receive members-only pricing on a rotating set of products. Recent offers included Agave de los Andes ($49 a 750-ml. versus $58 for non-members) and Philippe Fontaine brut rosé ($40 versus $50 for non-members). “Customers have been very receptive since day one,” says director of marketing William Foushee. “They’ve come to expect that there will be good deals each month.” Indeed, since 2021, Frugal’s rewards program has attracted nearly 50,000 members at its two stores, and is growing every month, notes Foushee.
Advanced Information
With access to some limited-run whiskies reduced, spirits consumers are increasingly flocking to liquor store loyalty programs for early alerts on availability. The Rewards program at Minneapolis-based Surdyk’s, for example, generates a randomized list of members who are notified of an allocated whisk(e)y release and given the ability to purchase a bottle. “Our customers enjoy being the first to know about all limited releases and new items,” says CEO Melissa Surdyk. The program, which was tweaked earlier this year, offers members a “personal touch and connection,” she adds.
Under ABC’s tier-based Access program, members who reach “gold key” status (more than 5,000 points) are eligible to receive an invitation to shop the program’s “vault.” According to Kelly, the vault includes many allocated Bourbons, like Blantons, W.L. Weller, and Pappy Van Winkle, along with hard-to-find Tequilas, single barrels, autographed bottles, and special wine vintages.
Similarly, some liquor store customer loyalty programs give members special perks when it comes to store events. Frugal MacDoogal’s Rewards Club members have the opportunity to win private beer and spirits tastings, and to even participate in the selection of a single barrel. According to Foushee, among the barrels that Rewards Club members have joined in picking were Jack Daniel’s, George Dickel, Woodford Reserve, Four Roses, and others. Last year, the Nashville store partnered with the local Black Abbey Brewing Co., by providing empty Blanton’s and Eagle Rare barrels, in which a Belgian quad and a stout, respectively, were aged. The retailer than hosted a members-only tasting at the brewery, which, Foushee says, attracted some 100 Rewards members. “It was a great event all around and members who attended have told us how much they enjoyed it,” the retailer says.
In a unique perk, the Surdyk’s Rewards program allows members to redeem their points for reward donations to featured rotating charities, such as the recent Los Angeles Fire Department Foundation. “This has been a part of our program since 2020, and the response has been very positive,” says Surdyk. “Members enjoy supporting our community.” The retailer often matches donations to the causes, she adds, which “has led to big impacts to local food shelves, dog shelters, and even to national disaster relief.”
Among other liquor store operators, Missouri’s Brown Derby has a tier-based loyalty program that awards $10 for every 2,500 points earned, along with military benefits, and even a free dessert for members from Derby Deli on their birthday. Total Wine & More—with more than 270 stores across the country—counts about 80% of its consumers as loyalty customers, said co-founder Robert Trone at the Impact Marketing Seminar earlier this year. “We have information on who they are, what they shop for, what stores they’re shopping, and it really allows us to market to them in a different way,” he revealed.
Targeted Tactics
Indeed, just as important as reward and other perks are to loyalty members, the programs provide retailers with valuable information and insights about their customers while thanking them for their loyalty. “In today’s world, brand loyalty is out the window,” says Silverstein. “If customers aren’t going to be loyal to a brand, we’d like them to be loyal to our store.”
In exchange for the deals and experiences, “we ask customers for something in return, and that’s the right to communicate with them consistently,” Foushee says. Data gleaned from the Frugal MacDoogal Rewards Club allows the retailer to target certain offers to certain members, he continues, such as “when a new Pinot Grigio arrives or when a new local beer will be available.” Similarly, thanks to ABC Access, the Florida chain is able to optimize the types of emails sent to guests, Kelly explains. “It helps customize what they see so that we don’t waste their time.”
Liquor stores generally rely upon their team members, store signage, websites, and social media to promote their loyalty programs. Once customers are enlisted, email marketing is typically utilized to maintain contact and target messages. But text messaging may be the next tool. Both Foushee and Dierking say their stores are considering SMS messaging for loyalty members.
Garfield’s Silverstein says that whether it’s phone numbers or email addresses, one of the challenges of customer loyalty programs is “getting people to believe that you don’t sell their information.” But once that hurdle is overcome, customers are sold. “They’re excited to join,” the retailer says. “They like the ownership of the spending power they receive from the rewards.”