Dec 1st 2009 Issue
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The Cost of Theater

Charles Cain - Dec 1st 2009

Loose Leaf Tea

In order to differentiate the Adagio Teas retail concept from the competition we plan to focus a great deal of attention on creating a sensory rich experience.

For the sake of argument, allow me to describe a few of the elements that I believe would create the ultimate tea buying experience:

  • Hundreds of teas accessible to the customer for viewing and smelling
  • Samples of each tea available in loose AND brewed form
  • The option of performing professional comparison cuppings of any tea in the collection
  • The ability to create custom tea blends from any tea in the collection
  • Detailed information available for each tea including year picked, country of origin, ingredients, packaged on date, best by date, brewing instructions and the story of the tea (details about the region, garden or production style)
  • Unbiased customer ratings of every tea and accessory (teapot, kettle, filter, etc.) in the collection
  • A sample of each accessory in the collection open and available for testing and brewing teas
  • Experienced, educated staff available to answer questions and guide curious customers

Am I missing anything? Is there anything else that YOU would like to see?

The key, the secret, the magic behind the curtain that will allow us to create a sensory rich environment without relegating Adagio Retail Stores to loss leaders for marketing purposes only is efficiency. Dramatic improvements in efficiency and aggressive adherence to the simplicity of the core concept will allow an Adagio Store to realize savings of time and money on the operation of the store and re-invest those savings into creating customer experiences.

Example: The recent advances in Adagio packaging will dramatically speed the checkout process. All teas will be pre-packaged in 4oz pouches and available for pick-up on the sales floor. Instead of spending time bagging teas for the customer, the staff will be able to spend that time interacting and showing the product.

Great premise, right? But this example of increased labor efficiencies requires a LOT more physical space. Ditto the idea of putting every tea on the floor for sampling, providing space and materials for custom blending or professional cuppings.

So here’s the real question. A tea retail shop can easily fit within a 1,000 square foot storefront with 700 square feet of retail space and 300 square feet of storage. Let’s say, for the sake of argument, that we’re looking at space that costs $75 per square foot triple net. An extra 500 square feet of retail space would allow for a lot of "Tea Theater", but would the extra cost ($37,500 per year or a little over $100 per day) translate to at least another $200 per day in sales? And what about the extra labor costs of staffing a blending table and/or cupping table?

Can a store that offers great "Theater", or a tea buying experience that is incredibly rich, deliver an extra $100,000 in annual sales? Or do we just encourage the same customers to spend more time making the same number of purchases?

Would love to get your thoughts. Stay tuned for more detail on which of these strategies for tea theater we pursue and how.

Adagio Teas