When purchasing wine at retail it is frequently organized by varetial, flavor intensity, price, country of origin, and by food pairing. Wine is even grouped in an indiscernible way by consumers as in, “I have no clue how to find anything in this store.” However, there is one simple no-brainer way that is infrequently, if ever, used in wine retail merchandising.
What is this genius merchandising technique so mystifyingly simple that it has eluded the grasp of wine retailers for decades?
Duh. Wine is never grouped by winery.
This simple fact confounds me. You can go into a store, scan the shelves, and see wine from an individual winery in seven different spots, but never together.
Consider:
• Research indicates that 97% + of people purchase wine at retail without any preconceived notion of what kind of wine they are going to buy.
• Wineries around the world try to build brands so they can be memorable to a wine consumer to spur affinity and a repeat purchase.
Yet, I have never been in a single wine retail store in the country that features and highlights the winery. Yes, the actual winery with all of the winery’s wines in one spot, telling the story of the winery that the winery has so painstakingly tried to craft.
Now, I’m not talking about a grouping of Yellowtail on end-cap, I’m talking about a wine retail shop that consistently and as a matter of business practice merchandises wine varietals from a winery leveraging the winery marketing as a merchandising mechanism for retail purchase decision. You would think that featuring a picture of the winery next to a grouping of the winery’s wines is a no-brainer. Not so.
Talk about a disconnect in the wine industry value-chain.
Yet, a quick scan of my Indiana Beverage Journal, the wholesale blue book of wines in distribution in the state tells me that, yes, most wineries, carried by single distributors, do in fact have multiple wine SKU’s in the state.
A few years back I wrote a business plan for a wine retail concept that played off two fundamental concepts – make wine retail like a winery tasting room. Sample the wine (I was planning to use an Enomatic) and group wines together by winery. There would be fewer overall SKU’s in the store, but the store, overall, would be merchandised in a much chic’er way—like a combination of a Starbucks and an Anthropologie store.
It would be like bringing the winery tasting room experience to retail.
The net result in my mind was to leverage the equity that the winery had built up, use their desire to build their brand at retail and present the winery in the same way that they try to present themselves at their winery. In doing so, an average store might only feature 60 - 80 wineries at a given time with 4-10 wine varietals per winery.
In doing so, the ability to taste through a winery offering on a rotating basis, the ability for a consumer to identify with a winery via merchandising all sharply increase. In my mind, they sharply increase for the better and build repeat business and loyalty.
This technique is a paradigm shift on a couple of levels:
• The retailer has to make purchase decisions based on a winery varietal grouping and not by an individual palate/buyer
• The retail has to make a purchase decision not based on current inventory of a varietal by price point. “Oh, I already have three Sauvignon Blanc’s at $14.99
• The retailer has to be committed to merchandising their store more like a boutique and less like antiseptic retail
A couple of thoughts on the future of wine purchasing at retail:
• The future expansion of Direct-to-Trade sales from winery to retailer, eliminating the distributor, gives a great deal of power to the winery to provide merchandising materials while using resources that were previously used to incent the distributor
• Small retailers need to get out of looking at inventory as an asset and focus on merchandising and inventory turns that are consumer-directed and not discount price or margin driven.
Let it be noted that I don’t have a single shred of evidence that tells me my instincts are correct, yet if I didn’t have the vagaries of a family, I would trademark the heck out of elements of my merchandising plan, and sink my 401(K) into this idea, that’s how cocksure confident I am in the notion.
I read the June Wines & Vines, a wine industry trade magazine that highlighted a new consumer lab at Brock University in Ontario, Canada, the article notes:
“Purchasing wine is often an overwhelming experience for people,” says laboratory research coordinator Erika Neudorf, a graduate of the Masters of Wine Business program at the University of Adelaide, Australia. “If it is understood how consumers buy wine, then it is easier to create a marketing mix to successfully reach a target market.”
Neudorf says the laboratory at Brock is the first in North America to exclusively study the relationship between consumer approval and wine origins and flavors.
For example, Lesschaeve, who specializes in biological sciences, studies how sensory properties in wine influence consumer preference. To conduct more accurate research, the new lab allows her to recreate the type of situations in which consumers would typically buy wine.
“The lab’s design is similar to a movie set,” Lesschaeve says, “in which the environment of a wine boutique, restaurant or tasting bar can be simulated.”
Here’s hoping that they investigate the simplest merchandising technique in the world—selling wine grouped together from the winery.
What are your thoughts on wine retail? Where are the deficiencies so consumers can make a purchase decision?