A few weeks ago my mom recommended that my wife and I go to a restaurant she likes. She even gave us a voucher for the restaurant that she had purchased on Dealtificate, a couponing site similar in function to Groupon and others. She’d paid 20 dollars for $40 of food.
I arrived early and was seated before my wife showed up. Because we were celebrating a small victory, I decided to order a bottle of wine and have it poured so it would be ready when Gloria came in.
You should know that I am not an oenophile. Even though my business partner has a real passion for wine, knows an awful lot about it, and maintains an enviable wine cellar, I’m pretty much a ten buck a bottle kind of guy. So I was out of my depth picking through a wine list with selections starting in the low 40-dollar range and topping out at around $200.
The waiter brought the wine, made the appropriate gestures to show me the label, and opened it with a flourish. He handed the cork to me and poured a quick splash for me to sample just in time for Gloria to walk in behind the maître d’. It was the perfect opportunity to gallantly offer her the glass of wine to taste.
Gloria liked the wine enough that I took out my iPhone to snap a picture of the label so we could buy some the next time we stocked up. Then I remembered I had downloaded the RedLaser app to my iPhone so I opened the program and used it to scan the wine bottle’s UPC code. RedLaser shows the product’s name, a picture of the product, and a list of retail outlets, online and off. It also shows the product’s price.
When I was a kid my parents were in the restaurant business and I’ve worked in a lot of restaurants as a server and bartender. I even know a little bit about restaurant management.
One of the things I remember is that the rule of thumb for most restaurants is to sell a bottle of wine for three times the average retail price. I confirmed that with a quick trip to Wine Enthusiast Magazine’s site. “Industry-wide markups average two and a half to three times wholesale cost,” says Randy Caparoso, a restaurant wine consultant at Wine List Consulting Unlimited.”
So imagine my surprise to find out that the $48 bottle of Gran Sasso Montepulciano d’Abruzzo that we were enjoying doesn’t retail for $16 but slightly more than half – only $8.99. I’m guessing that the retail store price is probably twice wholesale but even marking up the retail price means that a restaurant price of $27 would have been fair, $30 – $35 would have been extravagant and $48 was abusive.
Knowing I had been ripped off didn’t ruin our evening – the food and service were good and my wife was beautiful and wonderful to be with – but even though I liked the wine, it left a bad taste in my mouth (no pun intended) that will keep me from going back to that restaurant again.
Ironically, it was the Internet that got me there in the first place because until my mom offered us the online voucher that restaurant wasn’t even in our consideration set. And now it’s the Internet that will keep me from returning because RedLaser showed me how the restaurant was taking advantage.
The takeaway is simple: Internet technology can be a great way to build your business. Democratized information means that you no longer have to buy expensive print or radio ads to get the word out about your firm. But companies planning on taking advantage of their customers need to remember that the digital revolution cuts two ways. Now customers have just as many digital shortcuts as business people do.
The Internet giveth and the Internet taketh away.