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January 15 2011
With the rise of Groupon, an increase in wine imports into the U.S. and a preponderance of private label wine with mysterious provenance, now is a good time to unravel the backstory of a bottle of wine, Food Network “Unwrapped” style, with, perhaps, more unsavory results and even less understanding.
The Deal is On
It all started innocently enough, as most dabbling’s do: When a Groupon was announced in Indianapolis for a wine web site called Barclay’s Wine (their tagline: “In Vino Veritas”) offering a $75 Groupon credit for a $25 expenditure, well, you might as well have pulled my wallet out of my pocket for me.
Despite having never heard of Barclay’s before, I figured a bet that pays off 2:1 can’t be that bad. They have a very small selection of wine – 50-ish selections from $12.95 to $78.50, with a heavy lean towards imports. In a thought process that I presume is natural for their customers, I became particularly interested in Barclay’s offerings of more expensive wines – a chance to experiment with aged “Super Tuscan’s,” Barolo’s and Rioja’s. Library wines? From a 2:1 credit? Yes, please. It’s like gambling with house money, the smart way to go, or so I thought.
I had never heard of most of the wines on offer, which is not unusual for me with international wines, nor for legions of other wine enthusiasts. I pressed on. I purchased a 1996 Gran Vino Enologica Rioja designated as a “Gran Reserva.” Typically only designated in the best vintages, of which 1996, according to most, was a good, but not great year, Gran Reserva’s are the highest designation for Spanish wines and must be aged a minimum of two years in oak and three years in bottle. This 1996 therefore had about nine years of age from the point in time in which it was ready to release to market. Not bad for $62.50 nor the $25 it actually cost me.
Oh? That’s a surprise
Color me surprised, however, when the wine arrived on my doorstep and the bottle, faux-aged label and the wax and straw adornment were pristine – pristine to the extent that unless the wine was aged in a hermetically sealed box absent light there is no way this wine was bottled in late 1998 or early 1999, particularly so because the bottle itself was incredibly light, the kind that would be from an “Eco” series from a bottle manufacturer, a recent development to reduce bottle weight.
I opened the bottle – It had a terribly flat nose with whispers of licorice and no other discernible characteristics. The wine was oxidized, the fruit was gone, tannins were very soft, but the acid was integrated. In a word: Disjointed. And, impossible to analyze objectively. Could it be aged? Perhaps, so. Regardless, it was bad.
I looked online for this wine—a practice I’ve become accustomed to doing AFTER trying a wine (and not before) in order to maintain a sense of objectivity.
My sleuthing go-to’s of CellarTracker, Wine-searcher, and Snooth yielded very little information on the wine that wasn’t Barclay’s related. It must be a private label.
But, a private label makes very little sense for an aged Rioja, particularly one with a brand-spanking new label that denotes that my bottle is number 762 of 12,000. What Spanish winery would be sitting on 1000 cases of wine in bottle from a Gran Reserva year nearly fifteen years prior?
The Unraveling
I did a TTB COLA label search and found the label registration from 2004, registered to American Wine Distributors in San Francisco with Keron Lenz as the contact. I contacted Keron, who is, in fact, an independent wine compliance consultant and she deferred me to American Wine Distributors.
The label yielded a couple of bits of investigative information. First, the name of the importer – The Dominion Wine Group. Second, the Rioja authenticity label and, finally, the name of the Spanish winery.
In checking out the importer, their address, via Google maps appears to be a small, non-descript office in Corte Madra, CA. Dennis B. Canning, the only known contact I could find, is listed as having a relationship with American Wine Distributors, one of just a few references online for Canning whose company doesn’t have a web site.
They’re probably an import paperwork business, of which there are many in the wine business, set-up for the sole purpose of legality and making a couple of bucks a case on legal rubber-stamp based importation.
Checking out Rioja certification related to a specific wine proved more difficult, but what I did find out is that the certification labeling on the bottle does represent new Rioja art as of 2008, so this 1996 was certified by Rioja sometime in between ’08 and present.
Finally, I investigated the winery, Bodegas Rioja Santiago, who appears to be a legitimate wine company who is in the business of growing, making and aging wine. Presumably, they sell a handful of labeled wines, and sell-off the rest of their inventory.
Circling back to Barclay’s wine, more investigation yielded that not only is Barclay’s doing Groupons in Indianapolis, but also many other major markets across the country; virtually all of their wines are of the private label nature.
How it Works
Based on educated guesses – here’s how it works: Barclay’s Wine operates in the gray market of the wine world—legal, yes, but also on the fringes of what our traditional understanding of wine provenance is.
Barclay’s, an ecommerce retailer, works with American Wine Distributors (AWD) to source finished, bulk wine from around the world. In this case, AWD already had a label approved and an importer in place to have the wine custom labeled, going through the TTB with compliance as necessary. Strictly a paperwork deal with the importer, the wine comes into American Wine Distributors who distributes to a network of their distributors across the country, ready to drop-ship to consumers via retail partners like Barclay’s.
The wine, at this point is likely very margin rich, meaning that Barclay’s sets retail prices based on what they think the market will bear after paying for the wine costs downstream – purchasing the wine, labeling via AWD, importation fees to an affiliated importer and taxes.
Responsible for demand generation, Barclay’s uses a Groupon offering to generate consumer interest—giving a $75 dollar value for $25 plus shipping means there is still plenty of money to be made on downtrodden wines purchased for pennies per gallon.
Then, insert the rube who thinks he’s buying wine with nearly free money whereby a splurge on a $62.50 bottle of wine is okay when it’s “house” money coupled with the fact that he probably doesn’t have a reference point for a 1996 Rioja Gran Reserva, nor the inclination to check, and it’s game on.
Wash. Rinse. Repeat.
Sadly, however, there are more open-ended questions for me to reconcile:
* Is the supposed ’96 really a ’96?
It’s Impossible to determine without carbon testing, a matter I’m unlikely to pursue.
* How to reconcile the very light bottle?
Was it bottled by the winery and then re-bottled to reduce shipping costs, placed in a vessel that was lighter and less expensive for shipping 1,000 cases? It’s possible, but nearly impossible to find out.
* Is the wine even predominantly Tempranillo or lesser blending grapes?
Because of DO laws and no information on the label, it’s impossible to determine short of lab testing or calling in a Master Sommelier. Tempranillo is an ageable wine, yet, again, the wine wasn’t overtly oaked by presence of tannins. The notes on the site say it’s Tempranillo, but ...
Summary
Despite my sleuthing, the reality is this tale of woe happens every day in the wine world with mostly unchecked by the wine consumer. The gray market is an under-acknowledged, but omnipresent part of the wine trade very similar to the closeout marketplace that allows name brands to end up in the dollar store. Yet, the wine world has the added peculiarity that branding is even more stridently protected while anybody can register another anonymous wine label in a sea of wine labels.
The takeaway for me is that while Barclay’s uses the Latin phrase, “In Vino Veritas” (There is truth in wine) as their slogan, it could just as easily be another Latin phrase, “Caveat Emptor” (Let the buyer beware).
Ed. Note: I’ve purchased two more bottles of the Enologica (continuing a streak of personal idiocy) to ensure I didn’t have an off bottle. Regardless, I have many more questions about this luxury-priced wine than I have answers.
December 27 2010
Many would cite the 2010 Winter Olympics as this year’s greatest achievement and export from British Columbia, Canada. However, I would argue that the highlight of the year from the West Coast of the The Great White North comes from two winery ecommerce companies who are succeeding where their spiritual California forebears have stumbled.
2010 was a crossroads year for winery ecommerce. At no point in time has the need been more glaringly apparent for wineries to wrest their customer sales destiny out of the hands of others. Yet, seemingly, all of this year’s online innovation has been with intermediaries including the now ubiquitous flash sales sites.
At the same time, domestic ecommerce providers in the wine value chain have been experiencing transition, opening the door to our friends from the north who view U.S. winery ecommerce as not a challenge fraught with compliance issues that require decoding, but as an easier path to growth relative to their own byzantine legalities as well as an opportunity to lead U.S. wineries through the forest of trees.
Direct-to-Consumer Wine Ecommerce
In June of this year, the former Inertia Beverage Group (now “IBG”) announced a licensing agreement with Vin65 from Abbotsford, British Columbia (BC) to use Vin65’s ecommerce and customer management platform as IBG’s standard going forward.
“As an outsider, we can relate well to all of the other outsiders placing orders online. I’m 932 miles from Napa and all I really want is great wine without a huge hassle. A local Napa person can walk into a winery – I have to wade through the website, the checkout, the shipping, and deal with that experience,” said Andrew Kamphuis, President of Vin65, commenting to me on his company’s detached perspective.
With the IBG deal, Vin65 cemented their growing reputation amongst the wine and technologically savvy set that they were the new leader in the direct-to-consumer winery ecommerce space.
Not mentioned in that deal, however, was the impact Vin65 might have on the other direct sales portion of IBG’s customer solutions—Direct-to-Trade (DTT), a void that may soon be filled by a BC neighbor to Vin65.
Direct-to-Trade Wine Ecommerce
DTT is a program that allows wineries to legally sell to trade customers, at retail or restaurants, currently available from IBG in 13 states (with more states legally able to be accessed).
When officially announced by IBG in 2007, DTT was heralded as an industry game changer – an opportunity for small and medium size wineries (who have had near-term historical difficulty securing distribution in states) to control their sales destiny and get their wines on and off-premise in a compliant way, enabled by technology.
Simply, upon launch, wineries could legally sell their wine into a given states’ retailers and restaurants via ecommerce-enabled self-distribution, or legal routing through the three-tier system (read: paperwork). I should know: I helped put the program in place at IBG leading the Direct-to-Trade efforts under Paul Mabray’s (now founder of VinTank) leadership.
By all accounts, what the DTT system afforded in access it lacked in usage. Wineries weren’t (aren’t?) ready to command their own sales activity. Though efforts were made to bridge supply with demand via a marketplace at the still existing WineRevolution.com, those efforts were met with more sales potential then reality.
Shortly after leaving IBG, I talked to a wine industry insider with both technology and distribution experience who remarked, “Direct-to-Trade is a good idea, but they’re trying to solve the wrong problem. Wineries won’t put feet on the ground to sell and it will take 10 years for the program to get off the ground. With the venture capital money invested in IBG nobody is going to have the patience for that long of a development life.”
It was sage wisdom. Yet, one harbinger of successful development around Direct-to-Trade that did come from IBG was a press release announcing an, “Online Wine Wholesale Platform” in October of ’09.
The premise behind an Online Wine Wholesale Platform is to attack the problem of small-to-medium size wineries now being able to access a market (yet not knowing where to sell into said market) by focusing on the small-to-medium size distributor who is as equally challenged as his wine brethren in managing cash flow and inventory.
By turning the situation 180 degrees and giving a distributor a “virtual” inventory of wine to sell that can be fulfilled from the winery (or winery fulfillment operations) it seemingly solves the problem of winery sales effort while giving the distributor a bigger book of wines to sell with little risk in cash outlay.
That’s called a win-win.
Quoting from the IBG press release, “We expect this new model to bring a significant boost to wine distribution in the states where we are looking to launch it,” said former IBG CEO Ted Jansen
The press release continued, “By incorporating IBG’s producer clients into their wholesale portfolio, distributors can expand their product line for retailers and restaurants, giving those customers access to products which allow them to differentiate themselves from competitors.”
Since the time of the announcement in October of ’09, IBG has been quiet on the DTT front with a new stable of senior leadership who have, perhaps, different priorities, which may include pacifying venture capital investors.
Another Shot on Goal
However, filling this void in Direct-to-Trade progress brings us to the other shining star from British Columbia—Onlineorderdesk, who recently announced that their technology was going to be used as the online ordering system in Virginia facilitating sales between wine producers and trade retail and restaurants, very similar to the IBG program, with a keener focus on reporting and ease of use for users.
The specificity with which the Virginia program launched appears to be a beachhead for Onlineorderdesk who are poised to launch a larger scale Direct-to-Trade effort in the U.S., capitalizing where others have sputtered.
I caught up with Onlineorderdesk founder Kevin Blucke who was coy on his plans, but did note, “We don’t replace sales reps. or distributors. We work with these individuals to give them the tools they need to do their job better. We want to turn a sales rep. into a relationship builder not an order taker. They should be focused on doing their job and making more people aware of the wines they want to focus on selling – we will give them the tools they need to do their job and the confidence that we will handle the ordering process.”
Blucke’s statement to me substantiates the press release for the Virginia wine deal where he noted, “Now that we have entered the USA marketplace, we plan to aggressively pursue other jurisdictions at the state level and the wholesale distributors.”
In other words, Blucke’s plans sound very similar to the Online Wine Wholesale Platform initiated, but never fleshed out by IBG.
As 2010 draws to a close, I’m comforted that despite U.S. progress in faddish intermediary wine sales, our friends to the north have their eye on the prize and the bigger goal – affecting positive change with domestic wineries and wholesalers. If the question is: Can the Cancucks save winery ecommerce, the answer should be: Let’s hope so.
December 16 2010
Have you ever read a wine article and when you finished it you had more questions than answers provided? Of course you have; much of journalism is like this—when a piece is straight reportage and balanced, vital context is often missing. Is this important? Should I care? Why do I care? These are all questions we silently calculate when reading something that has context for us.
Information without context is, well, just words on paper or a computer screen.
That pretty much sums up the international wine scene for me.
I have a good grip on the U.S. wine scene. What I see and hear makes sense to me because I can place the news in my mental jigsaw puzzle. However, what confounds me is the fact that the international wine scene is difficult to penetrate. I don’t have the same level of dimensional understanding. Something’s been going on in the New Zealand wine business this year, not that I can figure out what. And, a lot of news has been coming from Bordeaux this year, as well. Still, it’s mostly a riddle to me.
As the potential start to a “Kitchen Cabinet” group of international wine analysts who occasionally contribute here, I start with Jeff Leve from Winecellarinsider.com who takes us behind the headlines in Bordeaux.
Jeff’s a longtime, self-taught wine enthusiast with bona fides. He’s a moderator for Robert Parker’s message board, a habitué of Bordeaux and an up and coming authority on the Bordeaux trade, their Chateaux’s and wines.
I gave Leve a news article and a question and asked him to provide some background, which he does in good spirit and good form, and usually with a complementing link to his coverage of the issue.
News example: Link to Decanter article on 2010 vintage
Good Grape: Early reports indicate the 2010 Bordeaux harvest was stellar … again. What’s your take on quality and what’s your take on an incredible run of quality in Bordeaux?
The Wine Cellar Insider: It’s too early to tell. Many producers have not finished malolactic (fermentation). Blending won’t take place until January. And I have not tasted the wines yet. So it would be precipitous to have a strong view on the vintage. However, based on what producers have said about the harvest, my guess is, 2010 will be a good vintage. The style of the wines will be different than the previous vintage, 2009. 2010 should be a more structured vintage. Acidity will be higher than in 2009 and probably than in 2005 as well. The wines will feel fresher. By fresher, I mean they will have a bigger pop in your mouth, or more lift from the acidity. The wines will probably express slightly more red fruits than they did in 2009.
2010 (may) favor the cabernet based wines from the Medoc and Pessac Leognan. The year was one of the driest vintages in decades. But the wines will not be like ‘03. 2010 was shaped by drought, not heat. 2003 was hot morning, noon and night. 2010 was dry, but the nights were cool.
Good Grape: Is there more room to the Bordeaux ceiling from a price perspective?
The Wine Cellar Insider: Sadly, probably not. American wine consumers have been fortunate. We have purchased the majority of the great wines from Bordeaux, along with the top wines from most European wine producing nations for almost 3 decades. Plus, many of those wines were bought with a strong dollar. There was no competition. Things are starting to change.
Asia and other emerging markets are only starting to compete for the top wines. It will take some time, perhaps 10-15 years, but sooner or later, and probably sooner than later, much of the wines that American’s have been able to buy will be allocated to countries that have never had the opportunity to buy the wines before. They never knew what it was like to buy wines at a cheap price. To them, the price is the price. It might seem expensive to them but it will not appear overpriced. It’s a different mind-set. They have the money and the willingness to spend it on wine.
News example: Decanter article on Asians in the auction market
Good Grape: Asia is becoming a dominant world player in Bordeaux. Both futures and the auction market. What do you think this means in the long-run? Are First Growths destined to be museum wines for rest of the world—seen, but never drunk?
The Wine Cellar Insider: I am not sure this is the case. Asia is not yet a dominant player for Bordeaux futures. In fact, very few Bordeaux wines are selling in Asia as futures. I imagine this will change. But selling futures on a wide variety of different wines to Asia will be a difficult hurdle for the Bordeaux negociants to overcome.
The First Growths are already expensive and that small, select group of wines is destined to be more expensive as time goes on. They will only be opened by people who were lucky enough to have bought them a few years ago for low prices. Or, by people with vast amounts of wealth. I can say without a doubt, many of the First Growths are being opened and consumed in China. They are not being bought for the sole purpose of investment.
News example: Decanter article on Burgundy and Bordeaux in China
Good Grape: A recent Decanter article indicated that Bordeaux and Burgundy were engaging in a competitive battle for Asian mindshare. For readers that are more New World inclined and as such don’t follow Burgundy and Bordeaux closely, what does this mean?
The Wine Cellar Insider: From my previous experience along with what I learned from two weeks in China during November, at the top end of the market, Bordeaux is the only game in town. Burgundy does not have the same level of demand.
The two regions do not really compete. They are different wines, in different styles that sell at different price points. Most consumers buy one region or the other. Although a few consumers purchase wines from both areas.
News example: Bordeaux politics in action ( link,link and link)
Good Grape: For much of the past decade it seems like the CIVB has had one plan after another to help the lower-end of Bordeaux flourish, all while there has been political turmoil amongst its members. How can readers get a sense for what the issues are? And, will there be a day when Bordeaux will be out of planning mode and growing?
The Wine Cellar Insider: The CIVB actively promotes Bordeaux and tries to help the wines at the lower end of the price point scale. There are over 10,000 different producers making Bordeaux wine. Most of the generic wines are not that good. Bordeaux has a hard time competing in the $8 and under price range. There are stronger wines in that price being produced in South America, Australia and Spain.
The smaller growers are unhappy with the results being achieved by the CIVB. In fact, within the past few days, several growers recently defected from the CIVB hoping to set up a rival alliance called the CAVB, The Bordeaux Wine Growers Action Committee. The disenchanted growers claim the CIVB has not helped promote their wines in the marketplace.
News example: Women in Bordeaux
Good Grape: Some of the male-dominated tradition in Bordeaux was hinted at in Mondovino, but we’ve recently seen some more news reports celebrating female vignerons in Bordeaux. Help readers understand some of the cultural issues that have prevented women from playing a more dominate role in Bordeaux.
The Wine Cellar Insider: Mondovino is more fiction than fact. It’s a skewed look at the wine world from one point of view. Bordeaux has had strong women at the helm for decades. A few examples from the Medoc and Pessac Leognan are:
May-Eliane de Lencquesaing at Pichon Lalande
Corinne Mentzelopoulos at Margaux
Baroness Philippine de Rothschild, at Mouton Rothschild
Veronique Sanders at Haut Bailly
In Pomerol, the most famous proprietor who helped promote the success of Pomerol as well as the most expensive Bordeaux wine was a woman. Madame Loubat is responsible for much of the success at Petrus. In St. Emilion there are numerous women that run properties:
Christine Valette at Troplong Mondot
Juliette Becot at Beau-Sejour Becot who also works with La Gomerie and Joanin Becot
Sophie Fourcade with Clos St. Martin who also manages two other St. Emilion estates, Grandes Murailles and Cote de Baleau.
Helene Garcin runs four properties. Two in Pessac Leognan and one each on Pomerol and St. Emilion.
Murielle Andraud runs Valandraud, Clos Badon and Bad Boy.
I can cite a lot more examples. This was just a short list. Bordeaux has been open to women for ages.
Ed Note Pt. I: Yup, glad I asked for context …
Good Grape: With Suckling and Parker both carrying en primeur influence, do you think James Suckling loses currency by not having the Wine Spectator masthead for 2010 barrel tasting in early 2011? Parker influence aside, does the magazine make the critic, or does the critic make the magazine?
The Wine Cellar Insider: First of all, I wish James all the best of luck in his new endeavor. It takes a lot of courage to go out on your own. He’s a nice guy and a good taster with a lot of experience. However, it remains to be seen how well James will do without The Wine Spectator. His site only went live (very recently). Time will tell.
As far as influence on Bordeaux wine prices and sales, Robert Parker has no peer. His report is the number one quoted report in the entire wine world. Bordeaux price their wines after Bob’s report comes out. While all professional critics (including James), yield some influence, Bob is at the top of the pyramid.
Most people read The Wine Spectator because it is The Wine Spectator. The Wine Spectator is a hugely successful brand. At the Spectator, individual critics are not as important as the masthead or brand. They can be changed at will and sales of the magazine are not going to go up or down. But when it comes to Bordeaux, Parker’s journal, The Wine Advocate remains the most important buying and selling source all over the world for Bordeaux consumers, merchants and the chateaux.
Good Grape: Thanks, Jeff. I appreciate the insight.
Ed Note Pt. II: Leve has a lot of content on this site covering many of the great Bordeaux Chateaux’s. Have a look around and spend some time.
December 5 2010
It is a truism that most of us in marketing spend more mental energy planning personal parking exit strategies at a concert than we do planning marketing activities for the year.
We can’t get caught in a line coming out of the coliseum, yet we sure as heck can get caught bereft of a plan that maps to moving the proverbial needle for our professional responsibilities.
Well, if the idiom is correct and the early bird does, indeed, catch the worm, then now is a good time to prepare for 2011 before the D in OND is over.
Following up on a mobile marketing post I wrote recently, here are five more digital marketing trends (two big trends and then three tactical trends) that will impact wine marketers over the course of the next year.
Big Trend #1 / Marketing Automation
I learned a long time ago not to bet against IBM. Having worked closely with them for a number of years, I know that IBM makes and moves markets.
In the late 90s they created and owned the word “ebusiness” as business internal operations integrated with the internet. Several years later they created and owned “on demand” which is still manifesting itself in the move to having computer applications in the internet “cloud.”
So, when I read that IBM has been on an acquisition streak around marketing automation, I believe it’s worthy of mention.
According to Craig Hayman, general manager of industry solutions in IBM’s software group, as quoted in B2B, a marketing trade magazine, “Customers first make purchase decisions through digital experiences, but the marketing profession is beleaguered. The lack of IT support is a key bottleneck. We said to ourselves: How can we help move marketing professionals forward to drive relevant messages across all channels, optimize and measure ROI, and steward the complete customer experience online or onsite?”
Of course, this trend won’t fully realize itself in the next year, but paying attention to the convergence of customer relationship management (CRM), social CRM, and metrics management will keep savvy wine marketers poised to strike when the time is right for their business.
Big Trend #2 / Content Marketing
If 2009 and 2010 will be remembered for online participation by wineries, 2011 will be much more reliant upon wineries leading the conversation via content marketing.
Participation is one thing, but what are wineries bringing to the party that is unique, interesting, and original?
Think about content and interaction in the same terms as an intimate dinner party. The gracious host is thoughtful about who is seated next to whom in order to facilitate shared interests, while serving delicious food, sustenance, in addition to food for thought by leading a conversation in which everyone can participate.
As quoted from eMarketer, “Content can include anything created on behalf of a brand—be it an ad, YouTube video, online game, Facebook page, Twitter promo or mobile app—that consumers genuinely want to engage with and pass along to others. This content entertains, amuses, informs, serves a function or satisfies a consumer need. It’s welcome instead of annoying or interruptive.”
Smart wineries, if they haven’t already, will begin to create unique content campaigns around various conversational points of entry.
Tactical Trend #1 / Social Curators
Have you noticed that there are hyper-users of social media that don’t have a blog and don’t theoretically create content? These people with their online omnipresence are very active with updates from their mobile phone to Twitter, Facebook and other tools and they’re actively sharing photos, linking to stories, recommending experiences and the things they buy, living their life out loud.
As digital marketing continues to grow to encompass different strata of participation classes, the class of people underneath those that create original content (so-called influencers) are the “curators,” an increasingly important class of people in online marketing. Curators are the people that actively engage and organize their life, likes and dislikes for everyone to see.
These secondary beta influencers should be a target for wineries that want to move farther afield from the current online wine scene.
How to engage these people? Well, knowing who they are via social CRM and marketing automation is a good place to start, but, more importantly, engage these folks with kindness and status markers.
Tactical Trend #2 / Random acts of Kindness
I’ve written about Trendwatching.com at least a half dozen times. I can’t underscore enough that if you’re interested in marketing and contemporary culture, this free trend-spotting resource is fantastic (newsletter sign-up here). Random acts of kindness and tactical trend #3 both come from this site and their 11 Crucial Consumer Trends for 2011.
Simply, Random acts of kindness means companies and brands genuinely reach out to consumers by sending a small gift, a token of appreciation, or an acknowledgement, for no reason other than touching somebody just because.
Think of this as inexpensive concierge marketing on a one-to-one basis. The goal is to foster positive sentiment in connecting with customers.
Panera, for example, with their loyalty reward card offers random $1 off coupons at point of purchase, a bakery item on your birthday and other niceties.
Wineries spend oodles and oodles of dollars on using PR to reach out to writers with samples and marketing folders. Is that money, time and effort better put to use going straight to consumers in a friendly way in order to have them carry a message that has been couched in hospitality? Perhaps so, especially because social curators live their active life on their digital sleeve and connecting has never been easier.
Tactical Trend #3 / Online status markers
Also from Trendwatching, online status markers are an extension of the times we live in. When viewed without cynicism, the reality is most adults under the age of 40 are reasonably narcissistic, achievement-focused and status oriented, though that status doesn’t necessarily have to be luxury-oriented.
If I provide a Facebook status that says I’m at Notre Dame Stadium, it’s a sort of status badge for me.
So, the question becomes what can a winery provide to customers and potential customers that denotes a sense of specialness, a sense of exclusiveness (that is also inclusive) while helping people bridge their offline activities with their online activities.
The answer to that question is reasonably specific to the winery, but offering a memento of status based on club membership, a visit to the winery, or frequent commenting on a winery blog all add up to providing brand specific status markers.
In sum, I’m conscious not to say that these marketing trends are must-do for wineries. It’s not a zero-sum game with winners and losers. The fact is that should a winery ignore all of these trends they have a fantastic chance of doing just fine next year, but, increasingly, wineries that take proactive and innovative measures towards their marketing efforts, while recognizing that offline and online marketing are becoming indistinguishable, are the wineries that grow mindshare and subsequently sales.
November 24 2010
I’ve been involved in technology marketing and business development for 15 years and most of that time has been with internet related businesses. In this timeframe, social media is merely the fourth or fifth internet flavor du jour. Understanding this lineage allows me to maintain perspective on practical matters related to technological change versus the hype.
However, anymore, with the convergence of the internet and mobile (a/k/a “smartphones”), it’s becoming difficult to keep up, separating reality from hyperbole, even for a person whose job it is to stay abreast of this stuff … Yet, stay abreast I must, particularly important because the prognosticators are calling for even more rapid change … with more hype …
Given that we’re in a nascent phase of mobile marketing equivalent to where social media was circa 2007, I thought I’d give a very high-level and topical look at the mobile marketing landscape, particularly relevant because wine related activity is on the cutting edge in most sectors of mobile marketing development and will certainly be the next breathless must-do for wineries.
I won’t belabor the details, and my point is to talk quickly about the recent past and present in order to get to the future, where my interest lies, while linking out to sites where more information exists.
According to Mintel, a global consumer research firm, as reported by the Center for Media Research, they suggest the near term future for mobile marketing encompasses the following:
“With smartphones becoming the dominant mobile force, Quick Response and app technology will provide portals into unique experiences and improve our quality of life. In the US, sales of smartphones grew 82% from 2008 to 2010. As consumers are empowered, 2011 will see people take a deeper interest in where they are. Geography and status can be redefined through retail, presenting brands with an opportunity for increased location based services, promotions and solution.”
In understanding this landscape, the first thing to have a clear understanding of is the near-term legacy model of mobile marketing – commonly referred to as SMS and MMS.
SMS is essentially texting. The next stage is MMS which is multimedia texting. Ever take a picture on your phone and then send it to somebody from your phone? That’s MMS. After these two building blocks, mobile starts to get wooly.
The Blackberry aside, Apple and the iPhone are duking it out for market share. The Android operating system can run on many different phone handsets from a number of manufacturers, including the Droid from Motorola. Meanwhile, Apple and the iPhone are proprietary.
Amongst the two platforms, there’s a significant amount of competitive jousting going on, and both have a preponderance of applications, including dozens of wine-related applications. Most readers are familiar with this.
Yet, there are a number of technological sub-plots to this Apple versus Android story including the use of Flash versus HTML 5 to deliver motion graphics. Android favors the former and Apple favors the latter. This story will play out over the next year or so.
The long story short, smartphone trends indicate that nearly everyone will have a smartphone in the very near future and the future of computing (and the marketer’s battle for mindshare) won’t occur with your desktop PC or in your laptop bag, it will occur in the palm of your hand with a smart phone or a wireless tablet computer, running a mobile, non-Microsoft operating system.
So, given that as context, what’s next for mobile marketing in a smartphone-enabled, tablet-computing world?
Mintel has it right when they mention “Quick Response” and “Geography.” The next two years (at least) seem to be based on these two specific mobile marketing functions:
Context Sensitive Marketing
Context Sensitive Marketing or CSM for short is a catch-all bucket for a technology capability (that is rapidly being adopted) that allows an application on your phone to read a barcode or a special graphic (Quick Response or QR for short) that is placed on products – like a wine necker, for example.
In so doing, this scan of the bar code or the special graphic will provide you, the scanner of the object, access to web-based information that is specific to that company, or product. Think of it as value-added information on a meta level.
The best analogy that I’ve read to help understand CSM comes from technology web site Mashable. Paraphrased, barcode information or a QR code in the real world is like a real world full of internet links, making our physical surroundings fully contextualized.
For example (also paraphrased from Mashable), you’ve been looking for the perfect lamp for your living room. As a part of the hotel lobby furnishings, you see THE lamp, and it has a QR code at its base. You scan the code and your mobile phone browser takes you to a web site with information on the lamp and the ability to buy it.
One such wine-related company that is specializing in this technology is CellarKey with the positioning statement of, “Bringing the experience of a winery to the palm of your hand.”
Now, to be certain, if you choose to really dive in and understand CSM, you’re going to be ahead of the curve for 2011, when this market will really heat up.
For now, the likes of Microsoft and other mobile marketing companies are still jockeying for position and we’re just now starting to see codes in mainstream advertising, including the current edition of Wine Spectator for Korbel.
Geography
The “Geography” category is really a catch-all for “geo-location” or “location-based” services. This is the next frontier beyond Twitter.
Established start-ups like FourSquare, Gowalla and SCVNGR, who is partnered with VinTank for application in the wine industry, all bring an application or service to bear, via your smartphone, which allows a user of the application to “check-in” or identify themselves at a location, a retail spot, winery, etc. and begin to accumulate rewards.
Think of this as a loyalty reward card, based on where you shop or visit, combined with an element of fun or gaming that earns you stuff.
With recent announcements that Facebook and Yelp.com are also getting into geo-location services, this market is going to get very fragmented very quickly before it reshapes itself around dominate companies (who have yet to grab dominate position).
The Final Word
Technology innovation comes fast and furious – it’s like the weather in Indiana; if you don’t like it, just wait ½ a day and it will change. So it is for the evolution beyond social media. We’re at the precipice of the next frontier, mobile, and two aspects of mobile marketing that will be the hot topic and “must-do” for wineries a short six months from now.
As for me, a person who prides himself on separating reality from hype? I’d focus on QR codes because of their ability to hit a wide, mass, consumer audience in a relatively short period of time. Geo-location services, as currently constructed, are great, but there will always be a large percentage of the audience that don’t get it and will never get it, ala Twitter.
Choose your investment wisely.
Additional Links for Review
* Layar / Augmented Reality
* Quick Response (QR) definition
* Google Goggles (nearly universal QR reader)
* StickyBits (Bar scan marketing company)
* CellarKey
* Steve Jobs hates Flash
* Microsoft mobile tag site
* Mobile Marketing QR / tag company
* SCVNGR wine-related press release
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