Many luxury spirits and beverage brands think that it’s impossible for their brand homes to deliver a great experience while also being commercially viable. But that’s just not the case.
Many of the hundreds of brands we work with at AnyRoad historically justified the cost of launching brand homes because of the valuable role they play in building brand advocacy. In fact, they often found those venues so important that it didn’t really matter that they might only break even or operate at a loss.
These days, by contrast, expectations have shifted. With brands facing increasing pressure to not only find new and better ways to engage consumers but also to improve their operating performance, business leaders want their brand homes to run as self-funding profit centers. What’s more, they expect them to serve as free marketing assets for their brand teams, while also generating enough revenue to fund any re-investments necessary to ensure long-term brand alignment and keep guests coming back. That’s particularly true for luxury spirits and beverage brands, which are in a strong position to deliver premium experiences such as guided tasting sessions, masterclasses, private events, and luxury accommodations.
During my 5+ years at Diageo, I lived this balance of creating amazing brand experiences that also “washed their own face”. Now that I’m at AnyRoad, which plays a big part in helping Diageo to understand what is working and what isn’t at its brand homes in Scotland and the US, I’m excited to share some of the things I learned along the way.
Getting It Right: Brand Home Best Practices
Although achieving the right balance with brand homes can be easier said than done, it’s certainly possible. To create great experiences while also remaining commercially viable, it’s important to:
- Invest for success. Never cut corners when it comes to materials, furnishings, design, or the experiences you’re creating. Make sure to hire the best people and to give your brand home all of the support it needs to thrive.
- Scale for who you are and where you’re going. Ensure that the scale of your brand home is in line with the scale of your brand and that you’re planning for visitor projections five years out.
- Price tickets appropriately. Determine what price the local market will bear and then charge a little bit more than that. A higher price point sets higher expectations, which in turn helps enable bigger thinking when it comes to designing your brand home.
- Reduce friction. Implement smart technology platforms and flexible, mobile-first solutions that empower both guests and staff – from online visit planning through post-visit reflection. Ensure that tickets are easy to purchase, whether advance online bookings or last-minute walk-ups. Integrate retail POS and ticketing solutions to get a unified view of consumer purchase behavior. Align traditional performance KPIs with dynamic consumer insights into one dashboard, all seen in “real” time.
- Pay back with retail. Not only is the retail shop often your guests’ first and last impression, it can also contribute as much as 75% of a brand home’s total revenue. Smart design, a shoppable and enticing assortment, and a “retail flagship” customer service mindset will drive P&L success.
- Offer exclusives. If possible, feature at least a few products that consumers can’t get anywhere else or that at least aren’t readily available. A good starting place is to merchandise your full product assortment in the brand home retail space or to include items normally only available in far away markets.
- Be thoughtful about merchandising. When creating an apparel assortment, strike the right balance between branded and brand home merchandise. And, if there’s a strong association between the brand and a particular place (such as Guinness and Dublin), be sure to reference the location of the brand and brand home in that merchandise.
- Surprise and delight guests. Encourage and empower staff to perform small, unexpected acts of generosity to guests. That might include free samples or personalization, gifting services, free shipping, product advice, or even offering recommendations about what to do in town if they’re visiting. Little extras like these invariably lead to increased social media sharing, better guest reviews, and higher spend per head overall.
- Leverage the power of choice in consumer behavior. If you’re doing a tasting, give people three or four options so that they can pick their favorite to buy. Ideally, these options should span a good, better, best pricing range, with the most expensive option reserved for the last tasting. In addition, all samples should then be thoughtfully displayed so guests can find their favorite unassisted in the retail shop.
- Measure everything. Utilize data to celebrate successes, identify trends, benchmark against industry best practices, and close gaps in performance. Capture both quantitative and qualitative guest feedback. Utilize Brand Conversion to understand changes in brand perception and optimize the impact of an experience. Greater impact leads to higher guest spend.
Taking Your Brand Home to the Bank
Many luxury spirits and beverage brands think that it’s impossible for their brand homes to deliver a great experience while also being commercially viable. But that’s not the case. To become profitable, consider the best practices outlined above. From there, it’s important to evaluate the commercial success of the brand home by tracking revenues from ticketing, retail sales, and events and understanding the lifetime value of consumers who visited the brand home.
Armed with the right practices, creating brand homes that engage consumers while also paying for themselves is entirely achievable. Learn more in The Complete Guide to Running a Successful Brand Home.
For additional thoughts or advice, feel free to reach out to us at [email protected].