62 MARKET WATCH | MARKETWATCHMAG.COM | JUNE 2019
PH
OTOBY(TK)^ TKExpansion Ahead
In addition to competition from much larger players, Seat-
tle’s tight labor market challenges retailers like Downtown
Spirits. “Bringing in people with a knowledge of the prod-
ucts is always challenging,” Warren says. The legalization
of recreational marijuana in Washington, however, has been
a non-issue for stores like his. “Marijuana was legalizedaround the same time that liquor was privatized,” he
explains, and beverage alcohol sales in the state have grown
since then.
Despite the market’s challenges, Warren sees plenty of
opportunity ahead to build the Downtown Spirits brand.
“We’re constantly working to improve every facet of the
business—from product selection to the flow and design of
the store to how we host events,” he says. At press time,
Downtown Spirits’ beer and wine bar was being relocated to
the front of the store to “create a dynamic events space” that
caters to Amazon teams. Warren foresees growing Down-
town Spirits into a multi-unit concept, with locations else-
where downtown or in nearby neighborhoods, but for now
he’s focused on the existing store. “As our immediate
surroundings continue to develop, we want to make sure that
our store stands out,” he says. mwDelivering Value
“Online sales have become an important and fast-growing part
of our business,” Warren says, noting that they account for about
one-quarter of Downtown Spirits’ total sales. In addition to
shipping wine to states where it’s permitted to do so, the store
offers local delivery to homes and businesses. Key corporate
clients include Boeing and Amazon. In such a competitive
market as Seattle, “the way
we’ve been able to differentiate
ourselves is through delivery,”
Warren explains.
Downtown Spirits teamed up
with Drizly in 2014, and has
become the on-demand provid-
er’s largest retail partner in the
Seattle market, according to
Warren. Drizly orders average
$90-$95, and the store fills
50-100 orders a day. In Down-
town Spirits’ early days, when
the local neighborhood was not
as inhabited as it is today, the
Drizly partnership helped “to
build brand awareness and cash
flow,” Warren says. He credits
Drizly with helping the store
reach the healthy sales volume
it has now.
Downtown Spirits has often
hosted complimentary in-store
spirits, wine, and beer tastings,
but Warren says the company
is moving toward more paid
events because of the experi-
ence customers receive. The
annual “Champagne Show-
case” that the store has hosted
for the last four years has been
well-received by customers,
allowing them to sample more
than 60 sparkling wines. Such events are typically priced at
under $20 a ticket.
Advertising and marketing support includes a mix of tradi-
tional tactics—such as billboards and print—and social media.
“We’ve engaged in a robust social media strategy,” Warren
notes, explaining that Downtown Spirits has a dedicated
employee who creates content for platforms such as Facebook,
Twitter, and Instagram. Similarly, the retailer is putting a
higher focus on email blasts to drive website traffic and
generate online sales. Warren notes that the store has some
5,000 email addresses in its database.
Downtown Spirits and its parent company focus their commu-
nity support on two local organizations: Youth Care, which works
to end youth homelessness, and the Carolyn Downs Family Medi-
cal Center—named for Warren’s great-aunt—which provides
healthcare to underserved members of the community.
Downtown Spirits added a 10-tap growler bar (pictured) to the store in 2013, offering both 32- and
64-ounce sizes generally priced between $10-$18. Senior purchasing manager Terrence Tompkins says
the bar has been a great margin builder, especially because some of the best beer is only available on draft.