Engaging The Wine Consumer Of The Future Now

Where do we go from here?

The landscape for wine sales has grown increasingly complex.?

Factors such as inflated prices during and after Covid-19; challenges for the on-trade caused by the first sustained bout of inflation in a generation, and a rise in operating costs as governments search for politically expedient sources of revenue; a hike in the cost of living that limits the amount of discretionary spend; and an anti-alcohol movement becoming increasingly vocal in the US, are influencing consumer behaviour.?

These influences speak to the same fundamental question: will the wine market ever be the same again?

“Will it ever be the same again” and “will the market recover" are two different questions.?

The answer to the second question, notwithstanding external headwinds such as neo-temperance, is that the market will recover, and wine retail will adapt, as socio-economic groups with levels of income that permit a degree of discretionary spend discover the epicurean delights and civilising, social positives of wine.?

The first question is more interesting. More likely than not, the market won’t be quite the same again, even if the French have a saying “plus ?a change, plus c’est la même chose” (The more things change, the more they stay the same). Drivers of change include higher like-for-like costs, changing buying habits and an increasingly transparent world.?

So if the wine industry is going through such change, what can wine businesses do, or utilize, to effectively address the market and prosper??

Education and Content

Educational focus enhances the buying experience and helps customers make informed choices.

The sort of content the baby boomers lapped up isn’t necessarily what’s appealing to Millennials & Gen Z. These consumers prioritise storytelling, authenticity, and social responsibility - influencing how wine is marketed and sold.?

The evolution of retail

Walk past a wine shop early in the evening during the short days of winter, shop lights blazing through plate glass, and more often than not you’ll see packed high tables with people drinking wine set next to platters of cured ham and cheese.?

The wine bars of the ‘80s and ‘90s are being replaced by a retailer format that blends casual eating and drinking with low (or no) on-premise markups, unlimited advice and the potential for the best kind of wine discovery.

Exceptional Customer Service

Customer service extends past the buying experience, to order fulfilment and other differentiators such as a no quibble returns policy.?

It’s expensive and so in real terms represents an investment in customer satisfaction and retention, yet it works for a significant proportion of an addressable market that’s after value rather than purely price-driven.?

A positive customer experience at every point of engagement with a wine business encourages repeat purchases and loyalty.

Community and Exclusivity

Create a sense of belonging and exclusivity. A community differentiates a wine business from arms-length transactional models. Transactional models end up delivering a product at the lowest marginal cost of distribution. Whilst there’s one quite compelling point of view that that is where the world is heading for a certain type of buyer, there’s another that favours engagement and knowledge transfer, makes people feel special and delivers a memorable, learning experience.

Online

Passing are the days when wine was bought by the dozen. Majestic, the warehouse format multiple that once required a minimum mixed case of 12 bottles long went to no minimum purchase. Wines that cost less than a tenner in the early 1990s can now cost upwards of ￡50. That inevitably has an effect on how even the most engaged will buy.

Millennials & Gen Z want to put wine on the table or bring it to a lunch or dinner gathering on the weekend that’s purchased on Thursday and delivered the next day.?

Bringing together accessibility, content, education and exceptional service through delivering your eCommerce, potentially fusing services adept at making recommendations based on preferences or buying behaviour powered by AI or machine learning, is one of the challenges of current times.?

Digital Marketplaces

Platforms like Vivino or Drizly - and now Wine-Searcher with their Marketplace - make the wine-buying process more accessible and informed, provide comparison shopping, reviews and appeal to the part of your addressable market who have a certain level of knowledge. Or alternatively, put simply, know what they like and are looking for that either at the best price or locally.

The challenge for many wine businesses is margin, which may or may not be worth trading for customer acquisition depending on life period value potential and who gets to own the customer. Yet where it makes commercial sense, it casts your net ever wider.

Executing in a changing world

Attempting to embrace all these changes in a non-systematic way won’t work. It’ll be hit and miss and a 1 in N failure rate gets amplified, costs everyone time and money, and drains resources.

This round of change brings more complexity than ever that needs proper management.?

Leverage technology to help you enhance your customer experience and meet their changing needs, and deliver ‘above and beyond’ personalised service and recommendations. Look for ways to offer value in terms of education, content, community and thought-leadership.

Mastering inventory and content in a single system; connecting your business to multiple customer and contact channels; managing margin precisely for each of those channels; integrating with fulfilment services that will meet expectations; ensuring that every promise of communication during an order process is delivered upon, are the building blocks of a successful transformation.

Recommendation

Finally, very relatable to my article above is the recent piece by Matthew Deller MW; it's a brilliant, clear-cut manifesto for winning over the next generation of wine drinkers and very worth a read.

https://www.dhirubhai.net/posts/matthew-deller-mw-29146b54_wineindustry-futureofwine-actionovertheory-activity-7294502511783120896-09mr?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAACt2oBAXKtvVsu0TH5Hbp9SRLBBMlA3yI

Need help in adapting?

Wine Hub is the industry platform of choice for businesses navigating the complexity of market change and opening up paths to growth, or putting in place a rock-solid customer experience.?

Let's chat. Call on +44 (0)20 7278 4377 or email [email protected]