Accountability, service, integrity, and performance excellence. These are the values that the Virginia Alcoholic Beverage Control Authority (Virginia ABC) strives to uphold in everything that it does. The agency has 4,947 employees spread across its 399 retail stores, distribution center, enforcement team, and headquarters, and has consistently demonstrated its commitment to innovation and continuous improvement. It comes as no surprise that, for the third time in less than a decade, Virginia ABC is the winner of our Overall Best Practices Award for 2023.
Optimizing Warehouse Operations
In April 2021, Virginia ABC began a multi-phase process of transitioning to a new state-of-the art distribution center, which is approximately 37% larger than the agency’s previous warehouse and is expandable to 399,000 square feet.
“The move to the new distribution center was a monumental endeavor and was central to so many of the things we were looking to do to improve efficiencies, incorporate more sophisticated technology, and achieve a higher ROI,” said Tim Hugo, Chairman of the Virginia ABC Board.
The move was further complicated by challenges posed by the ongoing COVID-19 pandemic, including supply chain issues, employee turnover, and IT system integration issues. All these factors resulted in a difficult 2021 holiday season for the agency.
“COVID impacted everything, including our holiday success during our first year in the new building,” said Tyler Moore, Senior Distribution Center Manager. “We knew we needed to focus on how to better prepare ourselves for the upcoming year, still dealing with the effects of the pandemic but maximizing the new technology and operational processes afforded to us by the new facility.”
The following spring, a working group of employees from many different areas of the agency was formed and tasked with building innovative and effective solutions that would better prepare Virginia ABC and its customers for a successful 2022 OND (October, November, December). Team W.O.W. (Warehouse Optimization Workgroup) partnered with change management and retail leaders across Virginia ABC to identify ways of enhancing operations and logistics; people, performance, and culture; safety and enforcement; and communications and training.
In just a few months, Team W.O.W. produced 54 separate deliverables while also enhancing team morale. (Distribution center employees came up with their own team slogan, “Sleighin’ It,” and the authority’s communications staff created a holiday sleigh logo that was proudly displayed on t-shirts and hats and widely adopted internally.)
Ultimately, Team W.O.W. is credited with implementing a number of new processes and best practices that enhanced warehouse safety: Virginia ABC set a record of 146 continuous days without a reportable distribution-related injury. The work of the team also improved employee engagement by creating additional training opportunities, operational structure, and role clarification.
As a result, the agency experienced a 32% decrease in part-time employee turnover and a 5% decrease in full-time turnover in 2022 compared to 2021. Additionally, 2022 OND recorded a jump from 30,623 shipped cases per day to 37,346 over the previous year, and an average of 118 cases packed per hour as opposed to 70 cases per hour the year before.
“I’ve worked in the retail industry for more than 30 years, and seeing the many accomplishments of this team is by far the highlight of my career,” said Jennifer Burke, Director of Retail Operations. “So many people contributed to this process, and we were working across teams. We had people from the retail side come in to work alongside people in distribution to collaborate and come up with solutions to different problems. Their work had an incredible impact across so many aspects of our organization.”
Although Team W.O.W.’s work ended at the end of 2022, the processes it implemented remain in place and have created a massive operational and cultural shift within the agency.
“Everything this team accomplished now serves as the building block of how we continue to operate every day,” Moore said. “It was so instrumental having representatives from so many different parts of the agency involved, from finance to human resources to enforcement to distribution and more. We now have processes and accountabilities that directly benefited from the viewpoints of many different stakeholders.”
Developing a Comprehensive Online Licensing System
To enhance customer service and convenience, Virginia ABC launched a new online licensing system in 2022 to replace six antiquated systems. Previously, people could only apply for banquet licenses online. With the new system, Virginia ABC Licensing (VAL), licensees can apply for, renew, modify, and surrender any license online. Additionally, VAL processes all fees and fines online, eliminating the need for people to drive to an ABC regional office to complete financial transactions. VAL also incorporates hearings and appeals processes into the online system.
Banquet licenses were the first to be processed using VAL, and retail and industry licenses became available several months later. By the end of the fiscal year, VAL was used by 71% of individuals requesting a banquet license. It currently has a 26% average adoption rate for retail and industry licenses, although that number continues to grow.
The implementation process encountered multiple challenges, including disruption during the pandemic, complex data migration, and the state’s general assembly mandating new requirements to licensing systems when VAL was halfway through development. But the agency persevered, obtaining buy-in from a variety of key stakeholders to help move the process forward.
“We met with a lot of associations and trade groups to raise awareness, created tutorials, and traveled around the state to offer beta testing, information sessions, and trainings,” said Frank Monahan, Business Sponsor of VAL. “We also had some things come up post-launch that needed refining, but we worked hard to address them.”
Customer response to VAL has been overwhelmingly positive and the adoption rate continues to rise each month. Monahan expects to see tremendous growth over the next year.
Implementing a Dedicated Call Center
After moving into its new distribution center, Virginia ABC recognized the need for a dedicated call center. Until 2022, a call center didn’t exist— people simply called the agency with questions and staff routed the call as best they could without a system for managing the process. An average of 700 calls were received each month, and only about 40% of them were answered— much of the time, customers had to leave a message or simply hung up.
Optimizing this process was a priority for the agency, which wanted a new system in place prior to the launch of VAL. Virginia ABC began connecting with external vendors in early 2022 to identify a partner. Once a vendor was chosen, a prototype model was created within a few weeks, and the call center officially launched in April 2022.
The new system gives callers a choice to select from different topics and offers a callback option among other features. Now Virginia ABC answers an average of 97% of incoming calls. Call volume has also increased dramatically as people realize that customer service has improved; the team now answers an average of 100 calls per business day and estimates it will field 33,000 calls this year.
“The call center has been extremely beneficial for driving efficiencies and making the customer experience as seamless as possible,” said Joe Sattelmaier, Customer and End User Support Manager. “We are now equipped to manage an uptick in calls and have been able to do so using our existing staff, even though we currently spend about 165 hours on the customer support phone calls per month serving customers.”
Along with improving efficiencies, the call center also features data tracking and metrics that were not previously available. It tracks every call that comes in, highlights trends that illustrate peak call days and times, and generates daily reports that are shared with team members to keep them engaged.
Enhancing Training Opportunities
Committed to offering informative and convenient training programs, Virginia ABC developed a new program for licensees and delivery drivers in 2022. On July 1 of that year, Virginia state law changed to require successful completion of a training program for delivery drivers to qualify to deliver alcohol. Developed internally by the agency’s education and prevention team, the Responsible Alcohol Delivery Driver (RADD) training launched in June 2022, giving people an opportunity to become compliant in advance of the new law taking effect.
The free online course takes about 45 minutes to complete and is designed to educate licensees and alcoholic beverage delivery drivers on delivery best practices, along with preparing drivers for situations they may encounter while making a delivery.
Additionally, the training encourages licensees and drivers to remain up to date on current state beverage delivery laws and regulations. The course offers a pre-test option to give people a sense of how the program is structured before they begin the actual training. Individuals can also download resources and request that a printed tip sheet be mailed to them so that they have a convenient point of reference to refer to while in their car.
“RADD educates delivery drivers by giving them the tools they need to be compliant with the Code of Virginia,” said Kristina Yager, Licensee Education and Prevention Coordinator. “They’re happy to take the training because it keeps them in the know and helps them do their job safely and within the confines of the law,”
To date, more than 15,589 people have completed RADD training, which has a requirement of 80% correct to pass but averages 91%. Per an evaluation survey that trainees complete after taking RADD, 89% of them agree that the material is relevant to their job duties, 87% of them gained new knowledge from the course, and 87% feel more confident in their ability to make responsible alcohol deliveries. The training is required annually, and Virginia ABC recently updated it to include state code changes to driver laws that took effect in 2023.
Creating a More Equitable Product Allocation Process
In an effort to address retail inequities when distributing highly sought-after products that the agency receives in very limited quantities, Virginia ABC launched a new “drop system” in April 2022.
As part of the process, stores still receive limited-availability products as part of their regular shipments, but they are not permitted to “drop” them (sell or disclose the availability of these products to customers) until receiving notification from agency headquarters.
Drop store locations and times are randomized, and once a drop occurs, store employees receive a five-minute heads-up via two internal systems notifying them that the products are now available for sale. Shortly after that, Virginia ABC announces the drops across its Facebook and Instagram social media accounts and via its Spirited Virginia e-newsletter. Products are then made available to customers on a first-come, first-serve basis, with a limit of one product per person.
Although the new drop system has some critics, Virginia ABC says it has been successful at achieving a more equitable distribution process.
“We had issues around the demand for rare bourbons, and we have addressed them a result of this new drop process,” said Pat Kane, Communications Specialist. “Bourbon hunters had figured out our trucking delivery system and had an unfair advantage. Now everyone gets the same info at once via our digital channels and has an opportunity to purchase these products. It eliminates people lining up outside hours before the store opens.”
The drop system has contributed to exceptional growth across the agency’s social media channels and email newsletter. Instagram grew 1,300% from 1,495 followers in March 2022 to 21,462 in February 2023; Facebook grew 88% from 24,568 followers to 46,167; and the newsletter grew 49% from 112,615 to 167,366 subscribers. Seventy drop events were held during that time. Signage promoting the agency’s social channels is featured on displays in stores.
“Our platforms have soared in followers since last year,” said Abby Pendleton, Consumer and Digital Marketing Strategist. “We continue to see an average of 200 to 250 new followers each week. We weren’t doing paid content last year, but we’ve started doing that now to amplify opportunities to connect with this growing and engaged audience.”
Drops are also occasionally used to boost traffic in stores when business is slow.
“If we see that sales happen to be down during a particular week, we do a drop,” Burke said. “It’s a great way to generate excitement with customers and get them into our stores. Quite often people come in for the limited-availability products but end up buying additional items as well, and our store employees can suggest comparable items if a certain product is sold out.”
Constantly looking for ways to improve, Virginia ABC is currently working on text message notifications for product drops, which will launch in the near future.
Virginia ABC shows no signs of slowing down. It continues to build upon the work of each of these initiatives and many others. Future plans include examining the evolution of e-commerce, specifically in the context of retail and enforcement. Above all, the agency will seek additional ways of providing better service.
“At Virginia ABC, we are all public servants that have a role in the alcohol space, but in the end, we work for the commonwealth,” said Travis Hill, CEO. “Our entire team has just been incredible from the standpoint of working collaboratively and with so much dedication. We also have had a lot of fun in the process. That speaks to our culture and our values, and I am really proud of everything we have accomplished to date.”
Almost certainly, more innovations and achievements are soon to come.
Melissa Sherwin is a freelance writer and marketing communications strategist from Chicago, IL. Her work has appeared in Chicago’s Daily Herald newspaper, Time Out Chicago, Suburban Life newspapers, and various magazines. She is also the author of several children’s books. Follow her @MelissaNSherwin.