1. 1 Oregons Special Orders - Web Based Opportunity or A Problem That Just Got Worse? Steve Pharo Oregon Liquor Control Commission

2. 2 How Oregon has processed special orders in the past: Customer requests a product from a liquor store. Liquor agent completes a three part Special Order request form. Two copies are mailed to the purchasing division. Product is located and ordered from the distillery Acknowledgement copy is sent back to the liquor agent which verifies that the product was ordered. The estimated arrival date is included on the acknowledgement. The special order product is received at our warehouse and is married with the liquor agents next regular order.

3. 3 Facts: In 2001, Oregon processed 2,800 orders In 2007, Oregon processed 11,000 orders There are over 1,000 different items that we have ordered and sold in our special order file Special orders are continuing to grow: 1. Accelerate due to customer traveling, 2.Additional access to information about new products; on-line, magazines, etc., 3. Continued product line differentiation, 4. The rise of micro-distilleries Special orders were continuing to consume greater and greater resources

4. 4 Annual Order Totals

5. 5 Creation of the Oregon Web Based Special Order Program In 2005 the Commission started the design work on a Web based special order program. It was designed to be a companion product housed in the agents current Web based ordering system called OLAS. OLAS (Oregon Liquor Agent Services) is a Web based service for all electronic liquor orders. The design stage involved purchasing, stores distribution, IT staff members, selected retail sales agents, and distillery representatives. We began testing the new online Web based special order system in April of 2005.

6. 6 Retail Stores Benefits All agents use web based system and do not have to keep mounds of special order request forms and paper acknowledgments. All of their own special order history and in process orders are on-line for them. Increased retail agent satisfaction because of we have a web based system that is much easier to use. Use of the Web based system has reduced the order turnaround time. Retail agents can retrieve information, order product, or inquire from any internet connected computer through a standard browser. Customer can order via the store using phone, fax or e- mail

7. 7 Commission Benefits Greater work efficiencies – We have been able to keep up with the increasing number of special orders by our customers. All special order data and complete history of inquiries, ordered items, canceled items, completed orders, uncompleted orders and more is kept in one place. Paperless information – Both the Web based order system and the use of email for communications has greatly reduced the need for paper and the use of conventional mail.

8. 8 Change in Attitude or Change in Technology If we do not believe in special orders, we resist improving technology because it could be seen as a waste of time. If adequate technology support is not available, then we do not want to take special orders because they consume so many resources

9. 9 How we saw it… In Oregon, we saw special orders as an avenue to greater customer satisfaction The effort to support the special order option required us to invest in the technology solution

10. 10 Outcomes Increases in special orders Greater customer satisfaction Less pressure for privatization Additional revenue Last 100 orders- Average bottle selling price: $48.13 * this average does not include 5 bottles which sold at $2,229 each