When a wine shop in Hell’s Kitchen needed in vino veritas, it turned to SAP Digital Consumer Insight.
New York City has no shortage of wine shops, nor does it have a shortage of foot traffic. But the two don’t cancel each other out, although the foot traffic does present an opportunity for store owners to dig out the truth about their customers. Veritas Studio Wines, a small wine shop surrounded by eight other wine shops and tucked away on a side street in the Hell’s Kitchen neighborhood, knew it needed more consumer insight to build its own loyal customer base and thrive in a saturated marketplace.
Foot traffic would be the best bet for Veritas, so it started with guerilla marketing: flyers and posters alongside community outreach. Still, it wouldn’t be enough. Veritas is nestled between a falafel shop and a bus cleaning depot, not a hot spot for the type of sophisticated wine shoppers that the store envisioned.
Initially, when Jeremy Kaplan, Managing Partner at Veritas, heard about SAP, it sounded like more of the technology alphabet soup. But SAP Digital Consumer Insight (DCI) seemed like it could help. It measures a location’s statistics, such as foot traffic walking past the location, along with the gender, age and zip code of the traffic based on cell phone pings. It also identifies the type of phone, e.g., Apple or Android OS, or a prepaid flip phone. That data allowed Kaplan to learn about his customers and potential customers and how to better market to them. He was skeptical of what he would learn.
Putting SAP Digital Consumer Insight to work
However, SAP DCI revealed three big surprises when it came to customers.
First, customers weren’t arriving at the shop until mid-afternoon or evening. Veritas opened its doors at noon because that’s what the competition did. But that was inefficient; the data from DCI indicated that Veritas could comfortably open at 2 p.m. As a result, the opening and closing shifts could overlap by three hours instead of one, providing better service to customers. It also meant that Veritas could save $30,000 by not hiring another part-time employee to cover mid-day hours. Sales did not decrease with this move.
Second, DCI revealed where the customers live. The top three customer ZIP codes were all within Hell’s Kitchen, which meant that Veritas could focus its marketing efforts in the area, rather than try to broaden its outreach. The only exception was a swath of customers from Northern New Jersey that commute by ferry three blocks away. As the weather warms up, Veritas plans to market to the ferry commuters to encourage them to walk by the shop and pick up a bottle before dinner.
The third insight completely changed the way Veritas viewed its customers. While Hell’s Kitchen historically has been filled with multigenerational residents and blue collar workers, the customers walking past Veritas were much younger than expected. Over half of them were under 45. When an older employee moved to another position at a different company, Veritas didn’t feel the need to replace the employee with someone of the same age.
Additionally, Veritas realized it could relax its in-store marketing. “Wine is a stodgy industry – a lot of people think about wine as being snooty and something intellectually out of reach,” Kaplan noted. Veritas employees speak to customers in their language, witty and emotionally. An employee is likely to tell a younger customer that this wine “rocks,” rather than describe the delicate bouquet.
The biggest benefit has been money saved by using DCI. However, the shop is starting to see more ferry commuters in the store. As the neighborhood continues to grow and become home base for New Yorkers pushed out of Chelsea and other high-rent areas, Veritas may run DCI again to see what has changed.
“Even though I understood what SAP did, I was skeptical as to whether they could provide something for me,” Kaplan said. “I recommend it.”