I Had Dinner With A Professor Of Innovation; literally.

What kind of innovation is everyone talking about?

Years ago,I remember being invited to dinner at the home of a professor at The University of Southern California. His subject of teaching was "Innovation".

I wasn’t sure how an entire semester at the USC business school could be dedicated to the subject of innovation; It just seemed odd that you could dedicate that many hours of lecture to the subject and what could that possibly entail. So I went home and looked up the definition of “innovation” and found consensus on? “... the process of bringing about new ideas, methods, products, services, or solutions that have a significant positive impact and value. “? I guess this a reiteration of the 'ol "need is the mother of invention"? Professor Gerard Tellis tells it as it is on this YouTube video: Innovation

So what is the "need"" of the wine trade? What does innovation look like? Are we solving a need or creating one??

Recently at a Roederer lunch, I had the pleasure of sitting next to a couple who has a very successful wine shop in the LA area; doing all the right things to market their store (let's leave it at that, I will be approaching the "right things" in a different post). But of course, they were singing the blues on sales and the effort and expense it is taking to facilitate those sales (expenses higher, profit lower). They wanted to vent.

My initial comment was that they are not alone and to not feel like they are creating these problems on their own or feel like they missed something and now are battling to get it back. Their comments and concerns are entirely too common. Do I tell them, don't worry innovation is on the way?? If told that, they would have responded? "Can I touch innovation? Can I put it in the cash register till?"? These people are in the trenches, innovation means nothing to them.

It can be explained that innovation in our trade takes on a few fronts. I wrote about "experiential innovation" at Chateau Haut Bailly; this was innovation for the winery both in tourism and manufacturing. On a? podcast with Dallas Cowboy Cheerleader Eva Horton, proprietor of Flat Creek Winery, she explains how she is creating a destination (experiential innovation)? that includes (2) restaurants, a tasting room and a Frisbee golf course… innovation?

Returning to? the example above with my lunch partners, here innovation could help on three fronts; experiential innovation to entertain customers who are in store, digital innovation to drive customers to the store, and marketing innovation to make the general public aware of the website. Where does a deeply embedded wine retailer/internet marketer start with innovation? What does that really mean to them???

The prospect of "innovation" (change) is a scary proposition; it costs money and has no guarantee of success. How many times can you create something new to find out it isn't producing an ROI of any substance and move on to the next attempt? You can't just say we need to be "innovative" and walk away from the podium.?

Most consulting conversations I have with potential prospects about where to take their next level of marketing in wine starts with? "there is no magic wand, each of the disciplines that need to change have their own headwinds and effort."”

Going back to the definition of "innovation:"? Innovation is to advance, and as defined, produce “positive impact or value.” But wine is in a very unique position as a consumer good. When you go to buy a household product like a corkscrew; upon close inspection, you can determine if the corkscrew is of good value; if its construction is sturdy and its material is of quality. If you move the foil cutter or lever into position, you can feel if the manufacturing is precise. If the manufacturing is precise, you can determine the product is of high value. If the product seems low in price and the tactile of the corkscrew is commensurate with the price, then you can assume it is of low quality. If the price is high and you determine that the tactile is of low quality, you can determine the corkscrew of low value,? but if the tactile experience is high and the price low, you would consider it good value. This does not align itself in the wine trade. In fact, I think this is where "innovation" and the wine trade collide.?

How can the consumer make that value analysis with wine? I am not talking about the educated buyer who can at least look at the brand, the vintage, the grape and the appellation and make an educated guess,? I am speaking of the consumer that heads to the supermarket and is confused about what to buy. No product in the world is more difficult to ascertain its quality without experiencing the product than wine. And even if one did experience the product, the regular consumer knows not of its value against other versions of said bottle. Does "innovation "kick in here? Is there a new augmented reality label (been there, done that) on the shelf? Is there a new fangled packaging idea that has probably been tried before (some of this stuff ain't new) and failed to "lure" a purchase? And isn't that the problem, that we are looking to lure the consumer to purchase and hope the quality/price (value) is there that they might buy again? Is that what innovation brings to the table?

Or is it marketing innovation, which basically would create new marketing ideas to try to, again, lure the consumer to purchase? I think we have seen enough of innovation in the low end merchandising side of wine. The proliferation of brands made from 20,000 liter bladders shipped into America at 50 cents a liter and then bottled in to 100 brands has run its course. The consumer isn't 'buying" this innovation any more. With my own experience, this innovation which was aimed at providing a less expensive alternative to store wines peaked when I opened a bottle of Saturday Night Live Beaujolais, undrinkable.?

So at the 40,000 ft label view, I think innovation must be at the winery level. Where winemakers and proprietors are advancing their quality (value) and innovating through manufacturing and visitation. Loyalty is virtually gone in the wine trade, only the most storied brands have collectors and wine aficionado chasing their inventory. For the rest of us, building the quality of the brand and telling the story maybe the innovation that was lost and needs to come back.

Chateau Haut-Bailly 美国南加州大学