SuiteWorld 16 – Wingtip’s very masculine digital ambitions

SUMMARY:

Wingtip is a very different San Francisco business – a high-end retail outlet meets private members club. A long-time NetSuite customer, the firm is now looking to boost its digital offerings.

wingtip
Club style

One of the characteristics of SuiteWorld over the years has been the spotlight that falls on some of the more ‘individual’ customers out there. This year’s unexpected highlight for me was Wingtip, a company which I confess I’d never heard of before this morning, but which is now on my ‘to do’ list for the next visit to San Francisco.

Wingtip is a high-end gents retailer cum private members club. It sells high-end men’s clothing, accessories and lifestyle products, both online via its website and offline via a three-level store, which houses a custom clothing department, wine and spirits shop, fly-fishing shop, tobacconist and barbershop. Ten stories higher-up, there’s a private club for its best customers complete with a bar, cigar room, lounge, parlor rooms and a wine cave.

Around 10% of the 1200 club members are women, but Wingtip is an unashamedly male proposition. Founder and CEO Ami Arad says that’s very much on purpose, recalling that while in college he worked in a small mens clothing store, in which the owner had given over some space at the back of the shop to his wife to run a women’s section. That women’s section expanded to become half of the store and then the majority, with the men’s are now relegated to the back.

It was perhaps something of self-fulfilling prophecy, he suggests:

A lot of men stopped shopping there because they no longer felt it was their store. Men shop differently to women.

While Arad says he’s flattered that women do want to join the club, there are no concessions being made to its nature:

The club has gotten more expensive and more masculine. It didn’t used to have a golf simulator or a cigar lounge. It takes a certain type of woman to want to come in to that environment.

The company has been a NetSuite ERP customer for the past eleven years, but this year has replaced a home-grown e-commerce system with SuiteCommerce Advanced (SCA) and SuiteCommerce InStore for POS (Point of Sale). In part this is being looked to to boost online revenues, as Arad explains:

E-commerce has shrunk significantly. I’m hoping SCA will help.We’ve been on a stagnant home-grown platform, with the investment going into the bricks and mortar experience.

This is perhaps understandable as the club operation is now around half of the business and driving the offline retail operation:

Our business model is unique. Like any country club or gym, there’s a one time initiation fee to join, then you pay monthly dues. What’s unique is that half of the monthly due is converted to retail store credit. We sort of force you to become one of our best customers.

The monthly fee is based on usage levels — if you’re from out of town and only likely to use the club once or twice a year, your monthly rate is lower than if you use it once or twice a week.

But what happens is that credit rolls forward month-on-month if not spent, which in builds up a bank of ‘psychologically-spent’ money which customers are often happier to use on expensive purchases that they would balk at if they were expected to pay the whole price in one go. Each member is essentially committing to spend at least $1,200-$1,800 a year at the store or online.

Balance

But while the offline customer experience is clearly essential, there’s a balance to be struck, says Arad:

E-commerce should be low-hanging fruit for us. We’ve made the investment in inventory. In-store shipping is not that complicated. It’s a no-brainer to be online. Should it be our focus? Perhaps not. But there are still many digital enhancements to be made.

For example, Wingtip has a digital bar and food menu that members can access from phones or tablets. One of the goals now is to get this integrated with SCA. The idea is that members can order food and drinks digitally, perhaps when leaving their offices to head over to the club so that their choice is waiting for them when they arrive. They can then pay their tab digitally as well.

So Arad declares that digital is key, recalling some less-than-satisfactory experiments in the past:

When we launched online 12 years ago, we had a ‘Gifts for Her’ section. We launched that online because we couldn’t get the funding. But it was very poorly merchandised and embarrassing, so we took it down.

Interestingly, in an age when analytics is seen as critical to the pursuit of understanding customer, Wingtip isn’t making too big a deal about this. Arad alludes to Henry Ford’s apocryphal remark that if he’d listen to what his customers wanted, they’d have said faster horses, not cars.

You have to follow your instinct as to what’s going to be best for customers, he argues:

I’m in there every day so I have a decent finger on the pulse. The number one selling coffee in the US is Starbucks. That doesn’t mean I want to serve it.

That said, he does want digital innovations to help to realise the ambitions that he has for the level of customer service he can offer:

We are nowhere close to utilising technology to empower all the experiences that I want. The SCA website is a lateral step, getting onto a platform from which we can grow. There’s just a sense of relief there. My optimism is at another level about what we can do now.

He picks out the example of the club’s range of 300 whiskies and 500 wines as a case in point f the kind of services he wants to be able to offer :

I want to be able to look at a whisky list and for it to show me the ones that I’ve tried before so that I can try something new. So, let me filter out everything I’ve had before.

One objective now is to get a professional sourcing person who can optimise the use of NetSuite, he concludes:

After eleven years, I’m sure we’re under-optimising it. In my email box ever morning, 20 emails are various reports out of NetSuite, but are there cooler widgets that we can supplement these with? But then our IT department is 10 hours a week of one guy!

Image credit - Wingtip

Disclosure - At time of writing, NetSuite is a premier partner of diginomica.