Marques Warren describes himself as a merchant of old. “A merchant would travel the world to identify goods that could be brought back to their home market and sold to local customers,” he says. “That’s what we seek to do.”
Warren, a 2019 Market Watch Leader, owns Downtown Spirits LLC with his father Ardie. The wine and spirits retail entity consists of two stores and one e-commerce site: Downtown Spirits, Esquin Wine & Spirits, and Madwine.com. Currently, the operation is 51% owned by Ardie and 49% owned by Marques, but Marques says a transfer of Ardie’s ownership stake to him is underway and expected to be completed later this year. The two also own Cherry Hill Wine, a purveyor of fine wines and spirits to Seattle’s top restaurants and retailers, including those operated by Downtown Spirits LLC.
“To compete we have to source our own unique products and really stand behind them as a team. From our sales associates to our drivers to our managers, everyone needs to know what these products are,” Warren says. “That’s what differentiates us from a standard retailer or a big box retailer. We take to heart what it means to be a merchant and we want to live up to that definition.”
The Downtown Spirits organization leverages its exclusive items, offering discounts and membership programs that focus on churning sales. That strategy is coupled with more traditional marketing approaches such as in-store events, online marketing, and email communications. Because of his unique approach, Warren receives the Market Watch Leaders 2024 Best Marketing Award.
Course Change
When Warren was named a Market Watch Leader in 2019, he had big plans. His 11,000-square-foot downtown Seattle store was ready for renovation, with plans for an expanded in-store beer and wine bar and upgraded kitchen to complement the store’s retail offerings. Before work began in earnest, the Covid-19 pandemic hit. “Obviously everything was put on hold,” Warren recalls. “I was really glad I didn’t put hundreds of thousands of dollars into building out an on-premise component of the store, only to have on-premise businesses shut down through government regulation.”
A short time later, Warren was hit with another blow to his business. Despite multiple promises that the building would never be sold, he found out in November 2021 that the building housing Downtown Spirits was being sold. Warren admits he had thoughts of throwing in the towel on the beverage alcohol retail business. After all, he owns other businesses—such as airport retail stores—that could benefit from his attention.
But through his airport retail business and with help from airport retail partner Hudson, Warren had seen the power of Amazon’s Just Walk Out technology for retail. He contacted Amazon, and the two ultimately agreed on a licensing agreement for the Just Walk Out technology, and Warren got to work in a new location adjacent to the Amazon corporate campus.
As the new store was being developed, time had run out on Warren’s original store lease. Eager to fill the gap, Warren purchased Esquin Wine & Spirits, the state’s oldest independent wine merchant, in January 2023. Merchandise was transferred and licenses processed, and the store opened under new ownership on April 1, 2023. A short while later, Downtown Spirits reopened in its new location, becoming what Warren believes is the world’s first cashier check-out free wine and spirits store using Just Walk Out technology.
“It’s been a wild ride since 2019,” Warren says. “It’s been exhausting, but I think our business is stronger coming out of it. It is challenging to run a multi store business—even with just two shops it’s a different business venture than running a single store. And the two stores are very different.”
In addition to his Downtown Spirits LLC ventures, Warren’s business portfolio includes Warren’s News & Gifts, which operates retail stores at Seattle-Tacoma International Airport in partnership with Dufry AG’s Hudson. Warren says the partnership is expanding further with a new duty free contract awarded earlier this year by a Hudson and Warren joint venture. The project will operate a new duty free store slated to open in 2027.
Warren says his firm will act as the wine and spirits partner, coordinating with vendors and the Port of Seattle to ensure regulatory requirements are met. They will also oversee tastings, pop-ups, and other beverage alcohol brand experiences within the larger duty free store. “There will be a learning curve but I think it’ll pay off for us massively,” he says.
“It’s the same relationships, the same groups that we’re working with on the street side,” Warren adds, noting that the duty free store will provide a prime marketing opportunity as the Esquin and Downtown Spirits branding will be incorporated into the pop-up events.
The Esquin Approach
Together, Warren’s two retail beverage alcohol businesses embrace both tradition and innovation. Esquin inhabits the former. As a destination store with deep roots in the Seattle community, Warren embraced the culture created by former owner Chuck LeFevre. It wasn’t a distress sale—LeFevre simply wanted to retire, and Warren was eager to take the reins.
“It was a really great business so we spent the first few months just learning, and we didn’t want to tinker with anything,” Warren says of the store located in Seattle’s SoDo (South of the Dome) neighborhood, about three miles from Downtown Spirits. “We just wanted to learn the business that they were running so well, and to eventually take some of our best practices and implement them at that store. Then, of course, we took some of their best practices and implemented them in the broader business.”
The SoDo neighborhood is more industrial than residential, but decades of offering quality selection and service have made it a destination store. “It’s known throughout the state for its wine assortment and customers drive or travel dozens or hundreds of miles to shop with us when they’re in Seattle,” Warren says.
Twice-weekly tasting events also bring Seattle residents and visitors to the store, which Warren says thrives in the traditional retail format. The store spans about 15,000 square feet, a figure that includes about 4,000 square feet devoted to Esquin Wine Storage, a separate business of which Warren is the controlling owner. Wine is the key focus at Esquin, accounting for about 60% of beverage alcohol sales. Spirits account for about 30%, and beer makes up the remaining 10% of sales.
Warren says he’s seen a small shift towards more spirits in recent years, but he wants the focus to remain on wine. “Most of the items that Cherry Hill Wine sources and sells are wine products and in Washington, for me, wine is a far more profitable product to sell,” he explains. “Our marketing strategy is to sell more of our wine at both our stores. I understand and am well aware of the national trends, but that’s why the Esquin acquisition was a strategic move. “We wanted our business to sell more wine and Esquin has such a dedicated customer base that we can tap into.”
Innovation At Downtown Spirits
Warren would like to see a shift toward more wine at Downtown Spirits as well, but the store sales are currently about 60% spirits, 30% wine and 10% beer. The store, at just over 4,000 square feet, has a markedly different approach.
Downtown Spirits relies on Amazon’s Just Walk Out technology. Customers scan their credit card when entering, with staff on hand to ensure each customer is of legal drinking age. The technology then takes over, sensing when an item is removed from the shelf and employing multiple cameras to ensure the item is captured appropriately. After entering and verification, “customers put their products directly into their bag and then just walk out the store,” Warren explains. “We have to do a little bit of hand holding with customers sometimes—they can’t believe it and they’ll stop back at the greeter station on their way out.” Reassured, customers leave the store and within a minute or two have a receipt for each item purchased and the final purchase total on their phone.”
The technology allows Downtown Spirits to eliminate cashier positions, but Warren says the technology allows for labor redeployment rather than reduction. “We reposition them to the sales floor so that they can actually offer assistance to customers,” he says. “We work hard to provide educational opportunities to our staff members.” All staff has the opportunity to complete the Wine & Spirit Education Trust (WSET) Levels 1 and 2 certifications, and Downtown Spirits (encompassing Esquin as well) will fly staff to the location necessary to sit for the exams.
“Even if someone’s only with us for a short period of time, I want them to leave knowing a bit more about wine, spirits, and beer,” Warren says, noting that as they grow professionally, those staff members are increasingly on the sales floor “so they can be more hands-on with customers.” Warren adds that staff is expected to “push products that we are sourcing ourselves, which is part of our marketing focus.”
Marketing Strategies
Both stores and the e-commerce site “carry all of the staple items you would expect from a packaged wine and spirits shop,” Warren says, but wines distributed by Cherry Hill gain the limelight. “We work with great wineries across the country—California, Oregon, and Washington are really, really strong for us,” Warren says. “Also, [we have] some great importers, along with other direct items that we source through the Wine and Spirits Guild of America. Our goal within the next year to a year and a half would be to have [those wines] account for a least a quarter of our sales. Right now, it’s about 15% of our sales.” He notes that Cherry Hill also sells product to Seattle-area restaurants, grocers, and other off-premise accounts.
Downtown Spirits, including Esquin and Madwine.com, offers membership programs that help drive sales of those Cherry Hill-distributed brands. A monthly CO-OP membership ($12) includes a 15% discount on CO-OP items, and 5% off all other items. It also includes unlimited free delivery and other perks. A Spree membership, at $3 a month) offers the product discounts alone.
“The membership programs drive customer loyalty in addition to driving customers to purchase those items that we strategically want them to buy,” Warren says. Within the stores, differently colored shelf labels differentiate CO-OP items from others. In the Downtown Spirits store, electronic shelf labels allow staff to update pricing or offer a sale price instantaneously. “At the push of a button, you can push out pricing to thousands of items,” Warren says. “It’s updated within a minute and then at the end of the sale it automatically reverts back to the regular pricing.” The technology feeds into Warren’s overall aspiration to be a digitally focused company. The online business currently accounts for about 12% of sales after peaking during the pandemic. “But our online presence is really one of our best resources to draw customers into the stores,” Warren says.
“We’ve prioritized driving customers to our branded City Hive sites in order to ensure continued delivery to these customers that have grown to rely on us,” he adds. “Our delivery business encompasses a bit more. It’s not just those digitally sourced transactions, but we’ve identified a customer segment in corporate customers that has been a real driver of our business. These customers are provided White Glove service from our corporate accounts team, and those customers expect an exacting service level that we’re really well-tooled to provide.” Digital focus notwithstanding, Warren acknowledges that many customers also desire the human touch. In-store experiences are crucial to building customer loyalty. Esquin takes the lead with tasting events every Thursday and Saturday. At Downtown Spirits, momentum on in-store events is ramping up as workers continue to return to offices.
Warren is all-in on Amazon technology and is considering implementing the tech giant’s latest offering: a system that can track items as they are placed into or removed from a cart. A screen keeps track of each purchase for the customer. “If we acquire new stores [or possibly for Esquin as well], it looks to be a great tool,” he says. On acquisitions, Warren is “continuing to look at store locations from Bellevue to Snohomish County in the north end of the greater Seattle area.”
Warren is also considering an additional perk for his members—adding unlimited free shipping in addition to unlimited free delivery. Finally, Warren is investing in the industry that has given so much to him. At press time he was awaiting final IRS approval for a non-profit called Warren’s Wine Foundation, which will focus on providing educational opportunities, through WSET programs, to people from non-traditional wine drinking communities.
Noting the numerous career opportunities for individuals with wine education, Warren says he wants to provide exposure to those who might not have it on their radar. He notes specifically that many within the Black community are eager for wine knowledge and the food and beverage industry is eager for knowledgeable workers, saying “I think our foundation, once it’s up and running, will help to bridge that gap.”