How To Pivot A Customer-Facing Hospitality Business Into The Gifting Market

The hospitality sector has been devastated by the pandemic, with lengthy lockdowns interspersed with brief spells of limited trading opportunities due to shifting Covid-19 regulations. As the crucial festive season approaches, entrepreneurs who managed to pivot their businesses into the gifting market stand to reap the rewards, however, it’s a move that’s not without its challenges.

Louis Caputo and Robert Buzzelli opened 23rd and Vine, a boutique wine shop and bar in Pittsburgh, Pennsylvania, in October 2019. They carry a list of over 50 wines sourced from small wineries in California, Italy, and Portugal.

When the pandemic hit, they were quick to pivot and launched a fully online wine delivery and curbside pick-up program with gift bundles and offers, including seasonal gift bundles for the Fourth of July and Halloween, holiday bundles, and a gift bundle containing local grocery items. They manage inventory from their warehouse a short distance away and handle the packaging of gift bundles in the shop.

Caputo says: “Our primary challenges included pricing the bundles to be competitive, yet accessible for our market, making sure we appeal to both wine ‘snobs’ and those new to wine, and having the infrastructure, supplies, and people to be able to offer the variety of packages we offer and get them out for same-day delivery.”

In the run-up to one of the busiest times of the year for gifting, they can deliver locally anywhere in the greater Pittsburgh area and are also in the process of setting up for nationwide shipping in early 2021.

Buzzelli says: “Our dining area has been at 50% capacity for the past six months, most recently down to 25%, so we depend heavily on our wine delivery and gifting, and being creative with seasonal specials and offers. According to PA state COVID-19 guidelines, we have to sell food with alcohol in-store, so that’s another reason this is so big for us.”

Gift sales have been consistent and are nearly 300% up on this time last year. “We will continue to promote our gift baskets indefinitely,” adds Caputo. “We don’t expect things to go back to ‘normal’ any time soon in Pennsylvania, and the convenience of the delivery and gift model has resonated with our community.”

In the U.K., Husband and wife Sam and Jo Fitch, founders of The Buffalo Bar, a mobile liquid events catering service, were expecting 2020 to be their best year yet. Lockdown changed everything, with 25 events canceled overnight and no prospect of new work. Their response was to create Drinks By Post and start delivering gift boxes of their authentic cocktail kits online.

The first challenge was the packaging; the ‘make at home’ cocktail kits contain up to 16 different ingredients in individual glass bottles. With sustainability and the environment of huge importance to them, they never considered using plastic bottles or bubble wrap.

“That would have been an easier and cheaper solution, but it went against everything we stand for,” says Sam Fitch. “The bottles are packed in shredded paper inside a cardboard box. They look great, and we know they’ll arrive at their destination in perfect condition. The cost is higher than using disposable solutions, but filling the world with single-use plastics just to shave a few pennies off the bottom line wouldn’t sit right with us.”

Because they were mailing alcoholic beverages to customers they also had to navigate the licensing regulations, which Fitch describes as one of the hardest parts of establishing the new business. The application process for a premises license involved liaising with the local council, the licensing department, the planning department, environmental health, and the police.

He says: “This was at the start of the first lockdown, when everyone was working from home but hadn’t quite got to grips with it. Luckily we already had a good understanding of the licensing regulations, and me being a personal license holder already made the process smoother.”

Finding the right delivery partner was another challenge. Initially, they chose a company based on price and convenience, which proved to be a false economy when any savings made on shipping went towards sending out more boxes to replace those that had been damaged or had disappeared. They have since switched delivery firms, and pay a higher price per box.

“Our choice of delivery partner reflects on us as a business, as they are often the only point of contact we have with our customers,” says Fitch. “If they receive poor service from the courier, they won’t become return customers and we will lose out, all for the sake of saving a few pence on the parcel price.”

The couple plan to make Drinks By Post a permanent additional revenue stream when their core business gets back on track next year.

Event production company Qube Events typically organizes events for groups of over 300 people, ranging from luxury high-end weddings to gala dinners, and charity and corporate events. In March this work came to a halt.

Anticipating the impact on their crucial Q4 profitability, a few months ago, CEO Debbie Marks explored opportunities in the gifting market. Earlier this month she launched Qube Luxe, and its ‘Magical Christmas in a Box’, a limited edition Christmas tablescape box for designing stylish Christmas tables at home. The company produced 100 of these boxes in the hopes that sales will help cover their overheads for the next couple of months.

She says: “Supplying boxes of luxury decor that include glass charger plates and fragile decorative items meant getting the packaging right while reflecting a luxury brand. We invested in gorgeous white boxes with gold foil print on the lids and inside the packaging to give the product a luxury feel to it.”

They also chose a premium courier service over a regular mail service to control the delivery and care of the gift boxes as much as possible. Now, what started as a knee jerk reaction is set to move into a brand extension.

Marks says: “We’d never considered gifting before the pandemic, yet on reflection, events and gifting tie in very nicely with each other, so we are planning to expand, with our next box, a baby shower celebration box, launching next year. We are also seeking investment so that we can expand faster and buy better; next year we will be able to bring our costs down and make our products more affordable.”