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Diageo's Greg Klingaman on using physical stores as experiential marketing vehicles

Johnnie Walker’s new flagship store on Calle de Serrano in Madrid may be a first for the brand – but it is not the first foray into experiential retail for parent group Diageo, says its global head of retail and strategic partnerships Greg Klingaman.

He points to a Diageo initiative that could arguably be credited with kickstarting the modern obsession with experiential retail when it opened in 2000. The Guinness Storehouse in Dublin, designed by Imagination, takes visitors on a tour of the famous Guinness Brewery before they arrive in a bar and shop. It has been the most popular fee-paying attraction in Ireland for years.

“I think that is experiential retail at its best. You’ve got a great tour, a great tasting experience, and then you’re in a retail space… and then in Scotland we have 12 distilleries which are open to the public, and you have retail shops there as well,” says Klingaman. “We have learned some things about what consumers want to see and do and feel in those kind of spaces.”

Greg Klingaman - Diageo global head of retail and strategic partnerships - at the Johnnie Walker flagship store in Madrid
Greg Klingaman - Diageo global head of retail and strategic partnerships - at the Johnnie Walker flagship store in Madrid

That knowledge raises the bar for the kind of experiential store that Diageo could create for Johnnie Walker – though Klingaman is quick to admit that ‘experiential’ is fast becoming an overused term: “Everybody is talking about everything as being experiential… if it’s more than bottles and bags. If we just set up a liquor store, and said we had the best assortment of Johnnie Walker anywhere in the world, it still wouldn’t be experiential. I think it’s a matter of people being able to interact with things, have it be participatory. That’s the word that makes it experiential: you participate.”

But why the move from distillery stores to a high profile flagship? “The strategy behind it is around using physical spaces as experiential marketing vehicles,” says Klingaman. A brand like Johnnie Walker – along with the other Scotch whisky brands that come under the Diageo umbrella – has a wealth of stories to tell and recommendations to share.

These include new ways to serve whisky, a strategy that has seen younger consumers adopt it as a mixer and cocktail ingredient, by moving away from the slightly stuffy, old-fashioned image of the spirit as a drink that was subject to rules about how it could be enjoyed. The flagship store presents a number of ‘serves’ and has merchandising fixtures that allow you to pick up all of the ingredients for a cocktail party at home.

It also runs whisky tasting sessions, cocktail-making lessons, and lets visitors pair whiskies with a curated range of fine chocolates. It is possible to personalise bottles as engraved gifts, or pick up unique products such as disposable ‘pocket whisky’ hip flasks. And of course it will cater for private and corporate parties and events.

Klingaman’s prior experience in fashion – he joined Diageo from PVH, parent company to Calvin Klein and Tommy Hilfiger – is reflected in a commitment to bring constant change to the Johnnie Walker store. “With fashion you have seasons. Naturally, your store is changing, at least every couple of months but usually more often than that. We really wanted to take that mindset, and think about how we bring freshness and newness into the store,” he says.

A constantly changing activation space – currently dedicated to a Game of Thrones whisky – and new serves will be among the tactics used. Being in control of its own retail environment will also give Diageo the liberty to experiment, and to change quickly if something doesn’t work, says Klingaman. When initiatives do work then kit versions of fixtures and promotions will be available to third party retailers.

The challenge to keep the Madrid store fresh and interesting will be key to bringing customers back to the store, and it is a challenge that will be met by the store’s staff. From a store manager with vast category knowledge and experience as a brand ambassador for Spain, to a team comprising a variety of backgrounds, close attention has been paid to the recruitment and training of individuals who will work in the flagship store.

“Some of them have bartending experience, some of them are entrepreneurs, some of them are graduate students. They all speak Spanish, and at least good English, and also other languages,” says Klingaman. “We wanted to have a diverse staff who would feel comfortable talking about the brand in a new and different way.”

Understandably, Diageo did not rush into appointing a design agency for the project either. Klingaman describes a process that started with an eight-way competitive pitch, resulting in the appointment of UK agency Dalziel & Pow: “We needed a retail design agency, not necessarily a brand agency… we chose Dalziel & Pow because we felt like they were the right balance of creative and execution, like they would design something we could actually build, to the budget and to the brief. They were style and substance… we’re now keeping them very busy at Diageo.”

The drive for in-store experiences, and the use of stores as marketing channels, raises the obvious question of how the success of stores should be measured. In more ways than one, is the answer.

“We will judge a lot of qualitative elements, in terms of how people react when they come in,” says Klingaman. “There will be that kind of emotional element that is part of the measurement.” Research before the opening, to test ideas for the store, will be followed-up after it has traded for a while. “And of course we have a lot of traditional retail KPIs that we will be looking at. We’ll want to understand what the conversion rate is, and the value of transactions and sales, and those kind of things… But I think we also look at it with a marketing lens, and understand what impact it is having on Johnnie Walker in Spain… because this store needs to stand on its own two feet.”

Klingaman is an optimist about the state of bricks and mortar retailing, and says that changes in the sector are raising standards – but that there is no space in the market for players that take their eye off the ball.

“It’s really fun to see this level of retail as it’s going through a transformation – or more of a rebirth,” he says. “We have so much choice as consumers, there are so many ways to shop and everybody is having to raise their game. And if you’re not raising your game you don’t exist anymore. And it happens fast.”

DIAGEO FACTS

Diageo is a global company with a diverse portfolio of spirits and beer brands. It produces more than 6.5bn litres of its products every year, from more than 100 manufacturing sites in 30 countries.

The company’s brands include Baileys, Tanquaray, Smirnoff and Captain Morgan.

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