CUTTY SARK: DEALING WITH (VIRTUAL) REALITY AFTER A ROCKY LAUNCH, NATIONAL TOUR LOOKS FOR SMOOTHER SAILING AHEAD

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You're sailing a tall ship from the Bahamas to New York. Marauding biplanes, rough seas, sneaky stowaways-and your inexperience as a captain-threaten safe passage of your precious cargo. Just seconds into the voyage you are wrecked on the rocky coastline, your cargo lost.

Luck is with you, however. This isn't reality-it's virtual reality. But for Cutty Sark scotch, the brand behind what's been billed as the biggest virtual reality tour ever, the nautical metaphors about stormy waters and lost cargo are all too real.

Hiram Walker & Sons in May embarked on what may well be a defining voyage for Cutty Sark, a bold move to revitalize a lagging brand in a flat market. The marketer commissioned two state-of-the-art virtual reality simulators, developed a storyline based on the legend of Captain McCoy-a real ship captain who delivered Cutty Sark, the "real McCoy," during Prohibition-and built an 18-month, $10 million brand repositioning campaign around a nationwide virtual reality tour.

The first eight months of the tour have been a lot like the Virtual Voyage that Hiram Walker and agency Scaros & Casselman, Stamford, Conn., designed. While the equipment has worked nearly flawlessly, setting it up and promoting it has been more difficult than those involved had imagined. And while retailers and distributors are enthusiastic about the tour, so far it's unclear if there has been any impact on sales.

"This is something very, very new to the liquor industry," said Andy Nagelbach, group product manager at Hiram Walker. "It's been fun, it's been interesting and it's been exciting, but it hasn't always been easy."

Virtual reality has fascinated marketers for several years. Players don special headsets connected to computers that give the impression they are in a different world.

In Cutty Sark's case, the view is that of a ship's captain. Using a ship's wheel to steer, the object is to sail to safe harbor while at the same time keeping cases of Cutty Sark scotch from sliding overboard or being destroyed by stowaways or attacking airplanes.

Hiram Walker commissioned its VR machines from Horizon Entertainment, St. Louis, the same company that provided machines to Bubble Yum for a mall tour in 1993. Since May, the machines-mounted on an elaborate platform designed to look like a ship-have criss-crossed the country, visiting more than 100 bars, entertainment centers and nautical-theme shows in 21 states.

"There have definitely been some labor pains associated with it," said Paul Francis, Cutty Sark brand manager. "When we started, we were almost living hand to mouth, where we had events pop up in a week and we'd be there the next week."

As the VR tour gained more visibility, another problem cropped up: too many requests for the machines that couldn't all be accommodated, leading to complaints by some that the tour was disorganized.

"It did kind of start out slow because there was this fear of the unknown," Mr. Francis admitted. "Once it got out there and started to make its rounds, it started to have a snowball effect," with bookings piling up and little time for bar owners and retailers to plan co-promotions. At some events, hundreds of people showed up. At others, turnout was far less.

The Virtual Voyage met success when it visited Church Street Station, an Orlando entertainment complex, in November. "Sales of Cutty did go up that week," said Steve Forbrick, operations manager for Church Street Station. "Sales had been slow in the past year."

Hiram Walker also learned the VR game doesn't take very long to play. So it became important to find ways to keep customers in the bar or restaurant after they completed the experience.

"The customer was going up and trying it one time and leaving," said Dennis Keer, Pacific region business manager for Hiram Walker. "We've tried to keep customers there longer," by staging competitions and giving away prizes in states where it's legal.

Some 30,000 people have taken the Virtual Voyage so far, Hiram Walker estimates. The company has collected a nearly 20,000-name database by asking players to sign in as they wait in line. Cutty Sark intends to use the names to market branded merchandise. In addition to VR, the "Real McCoy" campaign includes print ads and outdoor boards, a sportswear collection and a cause marketing tie-in with the Tall Ships Foundation.

"We're creating what I like to think of as a relationship with the people that ride virtual reality," said Dean Scaros, president of Scaros & Casselman.

It's too soon, however, to tell whether VR will translate to actual sales for Cutty Sark. The brand was down 9% to 10% in case shipments last year, falling under 400,000 units, said Frank Walters, research director at Impact, a liquor industry newsletter.

"The brand is gaining exposure, especially among the younger consumer, which for scotch is very difficult to reach," Mr. Francis said. "But are we going to see overnight results? Probably not."

Added Mr. Nagelbach: "Has it been a success or has it been a failure? Quite frankly we'll probably know a lot more about that at the one-year point."

As the 18-month Virtual Voyage approaches the halfway mark, all sides agree that because VR is such a complex technology the key to a successful tour is to keep the rest of the elements simple.

For now, touring the country with two VR machines is as interactive as Cutty Sark wants to be. While Messrs. Nagelbach and Francis say they're looking into things like online services and CD-ROMs, they admit their hands are full for the time being.

"The wholesale networks are always saying to marketers, `Why don't you come up with something new? You give us the same old stuff to work with all the time, and how do you expect us to grow your brand?' " Mr. Nagelbach said. "We don't get those kind of comments any longer because of virtual reality.'

Ira Teinowitz contributed to this story.

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