Peter Talks Retail with Joshua Wesson of Best Cellars

by Peter Merholz
September 5, 2007

Joshua Wesson, CEO of innovative wine merchant Best Cellars, will be presenting at MX East, our design management conference, taking place October 21-23 in Philadelphia. In preparation, Peter Merholz chatted with him about his store, its mission, design choices, and future. Here are the highlights of our discussion.

Peter Merholz [PM]: My first question is really simple: what is the history of Best Cellars? How long has it been around and how did it get started? What made you realize the need for it?

Joshua Wesson [JW]: The first store opened in November of 1996, but it was really a two-year process to turning on the lights and opening the doors. We opened a week before Thanksgiving, which is not the best time for a retailer to open, literally into the jaws of the monster holiday.

PM: The holiday season forces you to test your ideas very much in the moment.

JW: We opened on Lexington Avenue in Manhattan — on the upper east side of Manhattan, a small footprint store like all of our stores. Like all retail environments, there is a rating of how many bodies you can stuff in there before the fire department gets upset. And for the first week that we were open, we were exceeding our fire capacity. We actually had to have a bouncer there to make certain we didn’t exceed code.

PM: Is Best Cellars something that occurred over time or did you emerge from the bathtub shouting, “Eureka!”

JW: It was a grape stand epiphany after many years of suffering under the cruel heel of Manishevitz Concord, my first wine. I worked in restaurants for a number of years as a wine steward, thinking about putting wine and food together and helping people — all sorts of people, people who had broad knowledge of wine and people who had no knowledge of wine — connect to food in delicious ways.

The idea was to take a complex subject, wine, and make it instantly accessible, because when you think about it, ordering wine in a restaurant, you may spend three or four minutes, if that, thinking about what wine you want to drink and how it may or may not connect to the food.

Prior to Best Cellars, wines in wine stores were categorized by place of origin and/or grape type and that’s a fine way of organizing wine if everybody who walks into your store knows a lot about places of origin and grape types. But if they don’t, they’re lost and have to rely on the kindness of whoever might be their guide. If they don’t have a guide, if they’re in a supermarket, a big box store, or a place where there’s nobody willing to help them, then they’re lost.

I really wanted to make the experience so intuitive and simple that the store became your wine expert and it was your best friend, your reliable insider who would give you information that would connect your palette preference to a specific bottle.

PM: What was the insight that informed that design of the store experience? You mentioned how the store experience has the wisdom built into the structure and its framework and how it presents the wine to people, but how does a store communicate?

JW: The whole experience began with the principle that wines would be categorized by the way they taste, not by where they’re from or what they’re made of. Once you make that decision to categorize, present, and merchandise wines by taste, I won’t say that the store lays itself out, but it definitely guides you to a number of different ways that you could do that.

There are all different ways that people process information and we wanted to give as many doors into our house of wine as possible. We ended up not only with categories that were word based, but we added icons that reinforced the word-based categorization and then added color to those icons. We also let you taste the stuff before you bought it.

PM: How did you develop the empathy that enabled you to understand what would delight your customers? How did you get a sense of what the store layout, visual language, or the actual language should be like? Is it all driven by gut or simply your career in restaurants, or did you do some type of testing?

JW: The team of people that created Best Cellars is my founding partner, Richard Marmet; myself; the folks at Rockwell; and the folks at Hornall Anderson Design Works. Almost all of the people except me weren’t wine experts, so I had an empathy-based focus group available for the team of people building and creating this concept. The test was really for all those people who loved wine but knew next to nothing about it. We needed to find out if these things were working for them?

It was kind of like Apollo 13, on the ground they threw all the things that they had up in the capsule on a table, and tried to figure out how they could jury rig a device that would allow the astronauts to get enough oxygen to come back to earth. We looked at all the different things that constituted a traditional wine shop experience and we basically threw away anything that was an obstacle and what was left on the table became the basis of Best Cellars. We took away the bad stuff, kept the good stuff, and added our own stuff and that’s how Best Cellars came to be.

Even though we’re in a city of amazing graphic design talents, we went across the country to Seattle because we were enamored of a relatively small design firm called Hornall Anderson Design Works. We were impressed by what they had done for Starbucks and we ended up hiring them.

PM: This was before a Starbucks was on every street corner.

JW: Yeah, in fact, they were designing the second generation of the Jamba Juice stores: making it icon-based, and color-filled; a reinvention of a juice bar into something that was much more than that.

PM: Are you looking forward to wine-flavored or wine-infused smoothies?

JW: Exactly, well, it’s coming to a theatre near you. The icons were a real struggle. There was a period when we were worried that not having that design element was going to impede the launch of the business for sure; we were months behind where we wanted to be.

PM: What made you realize the necessity of the design element? Why weren’t simply the words and quality store layout with good lighting, nice music, and friendly staff sufficient?

JW: We really believed that the way people learned and reacted to systems of classification, especially when it came to something as complex as wine, needed to have the option of going with their strongest suit.

And we were creating new categories, these taste-based categories, so it was absolutely critical that all these elements come together to present a common idea: the reinvention of the way that wine was merchandized by taste rather than by anything else.

PM: Well the visual language set you up brilliantly for online retail. If you didn’t have it, you would have needed it in order to sell these online because the web retail is primarily visual. When did the website launch? How has it done?

JW: We launched the website around 2000. I look back and it hasn’t changed much since then, it looks dated to me compared to sexy web retailers these days. If we were to start investing a lot of money in its reinvention, we would do it, I’m sure, in a significantly different way. But when we created this word-based, icon-based system of categorizing wine, it was in many ways directly analogous to the icon driven universe of a computer screen.

The site never became a significant revenue stream for us until we developed a relationship with an online grocer in New York City called Fresh Direct. We created a seamless connection between our website and theirs, so the customers ordering food and wine on Fresh Direct don’t feel like they’re leaving Fresh Direct’s website. They are electronically transported to Best Cellars when they order wine and when the order is fulfilled it comes in one box, one Fresh Direct box. The order was actually put together by a Best Cellars’ employee working in a rented space inside of Fresh Direct’s warehouse.

We’re selling millions and millions of dollars worth of wine through Fresh Direct. We’re impulse fulfilling. Within 24-hours, customers get the wines that they want and they can drink them that day or the next day or the day after. I just read a staggering statistic that 80 percent of the wine purchased in the United States in 2006 was consumed within 72 hours of purchase.

The future for us as an Internet retailer is really doing things like we’ve done with Fresh Direct, where we can fulfill very quickly and cross promote our merchandise. People want to buy wine when they buy food.

PM: We touched a bit on this but I’m thinking about it more broadly. It’s been ten or 11 years since you opened that first store on the Upper East Side. What has been the evolution of the Best Cellars store?

JW: We’ve raised the price from ten to 15 dollars for what constitutes our everyday wines. We call them “great wines for every day.” They are the drivers of the business, constituting 85 to 90 percent of our dollar volume. Those are the wines that we love the most, the wines that we drink, that I drink every day.

We have become a little bit smarter in the way that we tune the music to the time of day. We actually have day parts and evening parts and the music that we play is markedly different: mellower during the day, a little bit faster at night. We also don’t play Christmas music. We’re very proud of that. In fact, we have signs that go in our windows at Christmas usually with a picture of Bing Crosby with a circle and a slash.

PM: What’s the reason behind that?

JW: We don’t want to pander and we don’t want to be like other people; you get so inundated wherever you go, it’s relentless. You’re bathed in a Christmas holiday acoustic and we offer a respite from that.

PM: What has been your experience of music on people in your stores and how they shop?

JW: When we dial it in right, customers stick around longer. I think it’s because we’re trying to program our music to be similar to what’s on your iPod. We look at it as foreground music, not background music, and we want it to be part of that shopping experience. It’s as important as the color of the walls, the shape of the icons, and the way that our employees dress.

PM: What about future directions? How do you see Best Cellars continuing to evolve?

JW: I think our experience with Fresh Direct has taught us that there’s tremendous power in working with partners who sell food. People make wine decisions when they make food decisions. It’s true in restaurants, supermarkets, and just about anywhere wine and food are sold.

PM: Excellent. I want to thank you for your time. It was great to have this chance to talk and I’m very much looking forward to what you have to share at MX East in October.

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