Friday, May 14, 2010

Why "Bottle Service is for Tourists"

The nightclub market is more crowded than ever now-a-days.

As with any oversaturated landscape, it gets harder and harder to make a difference in the marketplace, let alone stick around.

Like worried product managers, nightclub entrepreneurs increasingly employ their own gimmicks and tactics in the interest of fast money.

The problem, like any strategy based on shortcuts, is that they come at the expense of lasting brand equity.

One of these tactics is known as "bottle service".

Bottle service is a complete tourist move. It's the process by which anybody can call ahead to a club and reserve a "VIP table." That is, if they shell out a hefty chunk of change for an overpriced bottle of bottom shelf liquor.

The current LA rate is about $300 for a bottle which cost the venue $15 per bottle.

It's a great revenue stream for a club, especially in a time of fierce rivalries and multiple options for the consumer.

The problem with bottle service is that it's a pay-for-play tactic: Consumers can spend a lot of money, buy a couple of bottles, and get seated at a prime VIP table.

But if a consumer is not willing to buy an expensive bottle, chances are they're not going to be sitting.

In other words, if you don't pay, you're marginalized and so is a hefty chunk of the authentic scene at the club.

Now, its one thing to view Bottle Service as a positive revenue source as you create a great brand; its an entirely different matter to view this system as a revenue stream that will create the brand.

Brand value is the most important currency today.

Like when you stay in an Andre' Balazs hotel [Balazs owns such hotels as the Mercer in NYC, Chateau Marmont & the Standard in LA]. You know you can count on a certain experience.

Maintaining the integrity of your brand is the only way to transcend trend.

But here is the real key, if a club has longevity because everyone wants to go there and they are not forcing people to buy bottles, usually they will end up selling more.

Whether it's buying your way in by bribing somebody at the door or by buying lots of bottles; you cannot sustain a great venue anywhere, if people can simply buy their way in.

This is why - "Bottle Service is for Tourists"

1 comment:

  1. Read this email I just received:

    Dear Friend,

    I address you as "friend" because I share many of your views and I appreciate your candid writing. Based on what you write, I wouldn't be surprised if we have brushed shoulders in one or several of the places that you have written about. With that said, I have one thought and I'm curious to get your feedback.

    I believe that Hollywood is built one singular currency above all, that currency is not cash, it is Celebrity. Celebrity has access to most things in this city that cash cannot buy. The funny part is that it doesn't even have to be a lot of celebrity or even merited celebrity because we all know regardless of whether it is Urkle or some prior contestant on American Idol, that person and their posse are going to get access. The only places in L.A. that succeed are the places that hire Bolthouse or the Alliance (or SBE to a lesser degree) to do a night there. By good fortune or proper relationships, those two forces have the right celebrity relationships to usher in "cool." I believe that the hierarchy or flowchart goes something along the lines of:

    Promoters (Alliance or Bolthouse) bring the celebrities
    Models, wanna-be starlets and girls flock to party with celebrities
    Rich guys want to party with young girls and wanna-be starlets
    All this equals the elusive "cool" and the rest of the world is just filler or freeloaders at some table.

    Celebrities are a fickle breed, they don't stay hot for too long and they get bored easily which is why there are no enduring clubs in L.A. No one wants to be seen in the same outfit twice let alone be in the same club regularly, thus, we have the 2 year life cycle of the clubs here: Hot for a couple of months, get featured in US Weekly, all the tourists come and club owner charges them outrageous amounts so those tourists can go home and say they partied in the same place as Leo or Paris. So with all of that said, I'm wondering if when you write about a cool place, are you just telling us that it is Bolthouse or the Alliance's night at the new hotspot?

    I look forward to your new website, please let me know when you launch as I intend to keep up with your social commentary on the City of Angels. I just got back from Europe and though traveling is a passion of mine, Los Angeles will always be my home. Keep up the good work friend.