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Don’t forget the Tried and True

Posted by Sheri Hebbeln on August 4th, 2009

These are my principles.  If you don’t like them, I have others.   Groucho Marx

As we’re all very much aware, shifting market trends have made it a tough time for wine sales.  Eric Asimov summed it up in a recent article for the New York Times when he stated “Cash may be trickling, but anxiety is gushing forth.”  And while uncertain economic times may make it tempting to pull back on marketing spend or concentrate resources on the latest and greatest trend, it’s worth remembering that huge benefits can often be gained by focusing on the basics.   The essence of marketing is to understand the needs of your customers and develop a plan for meeting those needs.  With that in mind, I believe that all marketing efforts should fall into one of four buckets:  1) Building Equity, 2) Generating Demand, 3) Garnering Loyalty, or 4) Enhancing Channel Sales and Profitability.  By compartmentalizing in this way, all promotional tactics are focused on specific goals and objectives, allowing you to more easily measure results and plan for the future.

Build Equity:  Put simply the focus here is on acquiring new customers.    This includes all efforts to gently guide potential customers through the relationship cycle: from awareness, to contemplation, to preference for your wines (and your brand) and finally to loyalty and word of mouth.  Several tactics fit into this bucket, including but not limited to the following:

  • Focus on direct marketing and list building strategies.  Maintain and stick with a promotional calendar.
  • Reach out to both traditional media and the wine blogging community.
  • Social Networking is a great way to attract new customers of every age (most notably younger generations), to add a human touch, and to build good will.  Whether developing a Facebook page, joining the conversation in Twitter or utilizing YouTube, you will need a strategy for both participating in and monitoring conversations. 
  • If you’re feeling adventuresome, consider developing an online video.  Video can be used for many purposes:  winemaker interviews, culinary productions, or telling your story in general.  It can add a whole new dimension to your marketing effort.
  • Build traffic to your website using SEM and SEO.  SEM is an often overlooked method of paid advertising which if approached correctly can be very powerful both in building brands and in generating demand.  Use it to build awareness for your winery, as well as for short term promotional efforts.  Focus on niche keywords, your winemaker, your winery and other terms which are important to your brand.

Generate Demand:    This involves the use of promotional methods to generate sales and increase the average spend per customer.

  • Focus on the tasting room:  invite people to events, sponsor other local events and work with neighboring wineries if feasible.  Capture information that will allow you to approach these visitors in the future:  incentivize them to sign up for your newsletter or mailing list, and always encourage wine club participation.
  • Recognize that tourists are looking closer to home and reach out to locals.  For California wineries, this might mean anyone within a three hour radius.
  • Build upon your eCommerce strategy.  Remember the adage that “Content is King” and revisit your web site.  Make sure that content is up to date and product images and descriptions are clean and well thought out.  Also be sure that your site is frequently updated, with news, events and other happenings.  Don’t allow it to get stale or give the appearance of nothing more than an online “brochure”.
  • Consider different techniques for increasing average order value:  offer product bundles, case discounts, or shipping incentives on volume orders.

Engender Loyalty:  The use of creative methods to increase the lifetime value of customers and club members

  • Attack email campaigns and club promotion strategies with renewed vigor (use geographic and other forms of segmentation to ensure promotions are focused).
  • Examine ways in which you can add value to club memberships.  Acknowledge milestones such as birthdays, anniversaries, club longevity.  Offer “members only” events, tours, and tastings.  Include re-order materials with your club shipments.
  • Focus on current club members and solicit updated credit card information when necessary.
  • Revisit your customer service policies and customer relationship management strategy and ensure club members are treated accordingly.  In turn, this will allow you to rely on your customers to help with marketing - happy customers and the word of mouth they generate can be very positive.  And remember that social media is not just about acquiring new customers; it is also a great tool for generating customer satisfaction and loyalty.
  • Be sure to utilize relevant metrics so that you always understand the value of your customers.

Enhance Channel Profitability:  The pursuit of new growth opportunities and customer acquisition strategies via expansion into new and profitable sales channels

Direct to Consumer Opportunities:  As new marketplace opportunities become available, the landscape for direct to consumer sales will begin to change dramatically.  Participation in these marketplaces, whether Inertia’s new direct to consumer marketplace “CollectiveVine.com”, or via a Marketing Agent provides many benefits, namely:  1.) A captive audience and the ability to introduce your wines to an expanded customer base.   2.)  New opportunities for market research and testing without the traditional costs associated with them.  3.) Costs for participation are significantly lower than through traditional channels, resulting in better margins.  4.)  Customer acquisition: participation in winery direct programs means that customers are delivered to you for future marketing opportunities.  5.)  An opportunity to build brand equity:  today’s wine buyers are savvier and are accustomed to searching out preferred brands.  Online marketplaces provide an excellent opportunity for building awareness.
 
Direct to Trade Opportunities:  Wine REvolution, our direct to trade marketplace provides an opportunity to reach restaurant and retail buyers directly via an ecommerce platform, providing several benefits:  1) Access to new markets and trade accounts, 2) Control over your brand and 3) Increased profitability.  Make the most of your participation and aid trade partners by providing complete product data.  In short, make it easy for partners to sell your product.

Finally, as you reach out to new customers via channels which have not been available in the past, I think it’s important to remember that you are building a brand. With that in mind it is essential that you maintain a consistent customer experience across all sales outlets:  from sales collateral, product descriptions, prices, and the content and images provided to online marketplaces all the way through to the customer service experience.  Customers should know and respect your brand regardless of the touch point.

Sheri Hebbeln,

Posted in General, E-commerce, Direct-To-Trade, Email Marketing, Customer Relationship Management (CRM), Demand Generation

Wine Technology - The Bridge that will be Built

Posted by Pascal Davis on July 28th, 2009

Bridge 

2 weeks ago I attended my third WITS (Wine Industry Technology Symposium). Though I have yet to earn my badge of ‘seasoned industry veteran’, I feel able to reflect on the impressive in-roads technology has made in the wine industry. Only now am I able to catch a glimpse of the huge transformative effect information technology can have on the industry.

On display at WITS was a lot of cool technology, all with great potential. Yet there was little evidence of truly transformative technology – the kind that radically changes an industry and captures the attention of non-wine folk.

It’s no secret that the wine industry lags far behind others when it comes to living the great economic revolutions information technology is capable of unleashing. IT has completely changed the game in so many other industries, yet for most wine industry vets, that change still remains elusive.

“Technology does not drive change — it enables change”

New technology has already greatly changed the way wine brands are marketed and the traditional function of wine marketing has been revolutionized. For brand building and consumer engagement as key functions of the wine industry, technology has indeed enabled change.

When it comes to the sales function, new technology has revolutionized the way direct sales are conducted. Yet it is worth noting that while the direct sales channel and online sales have risen greatly in the past few years, it still remains a marginal portion of all the wine that is sold in the US. Whereas new technology has already altered the wine marketing function, it has yet to enable dramatic change for the wine sales function.

Contrary to what I once believed, “direct” is no clear salvation, or at least not in the next decade. It will be a long while before the US wine market will ever resemble a free market – there is no realistic mid-term alternative to the 3-tier system, not with what’s currently preoccupying state legislatures…

The “Wine 2.0” movement and the emerging ecosphere of wine marketing agents still face an uphill battle to change the way the industry operates outside of the direct channel. Even as direct sales grow with the astute combination of cool technology and clever marketing, this trend does not yet really change ‘business as usual’ for most of the industry.

Large retailers and large distributors are themselves working through intense and expensive technology projects to create even more efficiencies for the “traditional” system. Believe it or not, the established wine world is not immune to new technology; it’s just not sexy new technology like facebook (think dour SAP). So the big boys integrate large solutions to sell more and better, while the “new tech” folks upstream battle it out on the web to find a way to convert buzz into sales.

If a bridge is built to seamlessly integrate all these new tools into the 3-tier system, only then can the visions of so many wine tech entrepreneurs really take flight. The brave new world of wine technology will come about when the new world of wine tech meets the old 3-tier world.

To paraphrase the great W&S article summarizing WITS (zoom in on the ‘Tech and the three tiers paragraph), I want you to imagine a world where any small winery can participate in the 3-tier EDI (Electronic Data Interchange: the process of connecting trading partners on the same systems so they can communicate seamlessly).

  • I want you to imagine a world where it will actually make economic sense for the regional wine buyer of a large retailer or restaurant chain to actually pay attention to wine social networks and blogs to increase sales.
  • I want you to imagine a world where wholesalers of all stripes will feel comfortable in sourcing new brands whilst following the hum of online demand and user-generated content.
  • I want you to imagine a world where it will make economic sense for large distributors to care about suppliers with no deep pocket and for them to find profit in catering to niche markets. 
  • I want you to imagine a world where wine suppliers of all sizes can build elements of control over the whole wine supply chain.
  • I want you to imagine a world were a Kafkaesque regulatory maze and a severely oligopolous distribution system will not severely hinder entry to market for new suppliers.
  • I want you to imagine a world where the long tail can actually work in wine.

Why has this bridge not been built yet? For those familiar with our industry, just ponder this concept and how it relates to 3-tier: path dependence. The barriers guarding the wine market are so complex that until those barriers are tackled effectively, all other efforts will be hobbled in their potential.

On a strictly operational level, this bridge will require a strong foundation of streamlined compliance tools and clearing models, optimized logistics and standardized dynamic product data systems. On these pillars a road will be built: it will be the multitude of plug-ins and APIs that will allow supply from any tier to connect to demand from any tier. The smooth asphalt will be an array of online tools to facilitate wine marketplaces. On that bridge you will see pedestrians, cars, semi-trailers and trains alike, easily go from one side to the other… you get the analogy: selling wine today is like trying to get around the Bay Area with no bridges.

Only once this bridge is (or bridges are) built, will the wine industry live to the full potential that is on display at WITS. The pillars supporting this bridge are still discreet, but the technology, the knowledge, the plans and the vision are in place. It’s just a matter of time.

Pascal Davis, Director, Trade Operations

Posted in General, E-commerce, Wine Industry Trends, Compliance, Direct-To-Trade, Demand Generation

Exploring New DTT Markets

Posted by Rachel Fox Reed on June 1st, 2009

Recently the Inertia Direct-to-Trade team hosted two events in Lake Tahoe and Sacramento to showcase just a handful of our clients who are selling direct. Wineries attended the events to pour select wines for restaurant and wine shop owners. The wineries were encouraged to promote their own brand in these select markets while also gaining a list of trade contacts to encourage future sales.

The Tahoe portion of the event was hosted at  Sunnyside Steakhouse, a popular destination for both locals and tourists to the area. On this gorgeous Tahoe spring day, the venue provided tasters not only some fabulous wines but also a spectacular view of the lake. The second half of the trip was spent in Sacramento where Inertia hosted another wine tasting at the Citizen Hotel, a newly renovated building located downtown.

Our featured portfolio varied, providing a range of selection for potential buyers who came from all around the Tahoe and the greater Sacramento area to taste the wines. Wineries that were featured came from Napa, Sonoma, the Central Coast, Willamette… all the way to Walla Walla. All of these wines have not readily available in these markets in the past, and these two events provided an entry to the market for some great boutique brands who are selling through our Direct-to-Trade program.

Inertia hopes to host more events that enable wineries to directly connect with trade accounts to our Direct to Trade wineries. We expect to see many of the wines featured at the tastings throughout establishments in the Tahoe and Sacramento area this upcoming summer.

For more on this, please check out a great review and synopsis of some of the featured wines by journalist Barbara Keck. Featured in the Tahoe Weekly, you can also read her blog post entitled “Where to Wine in Lake Tahoe” here.

Rachel Fox Reed, Channel Development Manager

Posted in Direct-To-Trade

Some people just GET IT… Period.

Posted by Corey Abrams on April 17th, 2009

I’m spending some time in Florida, introducing Direct-to-Trade and some incredible wines to select accounts in Naples, Tampa and Orlando. I feel like I’m coming to a knife fight with a Bazooka! I’m taking the state by storm, armed with some incredible juice with incredible pedigrees; Lamborn Family vineyards, Jones Family Vineyards, Three Sticks and Olson Ogden just to name a few. In this rough economic climate, the smart people are looking for ways to survive, differentiation is one way, and Direct-to-Trade is the way to accomplish it.

This evening I walked into Absinthe Restaurant, a beautiful restaurant on the north side of Naples. It has an incredibly clean look without being sterile. The colors were soft, yet contrasting, white and a green you’d find after peeling a cucumber. I sat down at the bar and introduced myself to Armand, the owner/manager/bartender/husband/father which explains why he was attempting to wipe the exhaustion out of his eyes. We chatted for a quick minute as I explained the program and he responded with “Makes sense, let’s taste some wine.”

After tasting through the line up, he was blown away by the 2006 Three Sticks Chardonnay, and the 2006 Olson Ogden Pinot (which will soon be available exclusively in Naples at Absinthe, hence the differentiation) but now to the good part, I wanted to stay for a bite to eat. I asked him to pick two dishes, which is kind of a status quo for me, as I figure who better to ask than the people that eat the food on a regular basis, right?!

The first dish he brought was a julienned salad of apples and machengo cheese with copious amounts of fresh crab and a few caramelized onions… WOW!
Round two; two lamb sliders (which were more along the lines of mini burgers than sliders) with goat cheese and thinly sliced rounds of egg plant with a bit of arugula … Speechless. I live in the Napa Valley so I’m pretty spoiled when it comes to food, and I have never had a burger, lamb or otherwise, that has come anywhere near perfection as this one did, Thomas Keller take note (and I know I’ll be hearing from Thomas as he follows my blogs religiously). BRAVO my friend. Look, if you go to Absinthe, order the Lamb Sliders and don’t like them, send me an e-mail along with an explanation and I’ll refund your money.

Moral to the story? Armand gets it. In this economic climate you have to set yourself apart from your competition; whether it be through the food you serve, the wine you have on your list, or the service you provide, you need to do it and do it right. Armand has the food, he has the service, and now, thanks to Direct-To-Trade, he has the wine, Armand GETS IT….Period.

Corey Abrams, Manager, Trade Sales

Posted in General, Direct-To-Trade

It’s A Tough Market Out There

Posted by mitch.schwartz on April 14th, 2009

As part of the Inertia Direct-to-Trade (DTT) initiative, I’ve recently spent time on the street in various markets calling on restaurants and retailers, introducing our DTT program and, ultimately, selling wine.  As you all know, it’s a difficult market right now.

To give some perspective to my comments, I’ve been selling wine for 31 years, starting with carrying a bag for a Gallo wholesaler.  I’ve called on thousands of accounts, selling wines of all prices, and this is hands down the toughest market I’ve seen.  Okay, so you already know this.  The question is, what to do about it.

First thing to keep in mind is that consumers are still buying, drinking, and enjoying wine.  There was a study done in 1981, the last of the Carter years, that said that consumption of alcohol beverages will only decline when unemployment exceeds 11%.  Last I saw current unemployment is around 8.5%, so we are good there.

However, while volume of consumption doesn’t decline, price point does.  The consumer is buying less expensive wines today than they were a year ago.  No great revelation.  But again, what can you do to keep your wine moving?

If you have distributors, I’m sure they are telling you that the market is awful.  My suggestion is don’t take their word for it; they are selling wine.  In many cases, they are decreasing their inventory, so while they are selling wine, they’re just not buying as much.  Your job is to make sure they sell your brand, not just the other brands in their portfolio.  How? Be aggressive. Make market visits.  In tough times, it’s all about getting distributor share of mind.

Next, I would consider adding markets you’re not already in.  Is there a market or state that you have no representation in, but would like to?  Maybe the Inertia Direct-to-Trade program could help.  In the same vein, make an effort to sell to trade accounts in your area. Right now the trade is in control.  Give them attention, feed their egos.  They still need wine to sell.

The other avenue to consider is your Direct-to-Consumer business.  Inertia will be holding a Workshop for our clients on May 14th, specifically focused on how to grow your Direct-to-Consumer business in these tough times.  If you are an Inertia client, look for announcements on the dashboard of your RTE.

Lastly, this is a time to be patient.  However, being patient doesn’t mean accepting current results without trying to counteract the trends.  And, it does mean not damaging your brand by selling wine at prices so low, you’ll never recover from.  At all costs, you must protect your brand equity.

My guess is that we are in an inventory correction right now, and by holiday 2009, we will start seeing a return to recent form.  At least I hope so.
Good selling.

mitch.schwartz,

Posted in General, E-commerce, Wine Industry Trends, Direct-To-Trade, Demand Generation

Launching the Enhanced DTT Wine Distribution Platform

Posted by Andrea Johnston on April 2nd, 2009

Many years of planning and one year in the making, WineREvolution.com has officially gone live! While still in its Beta form, WineREvolution.com provides one of the industry’s only ecommerce wine distribution channels, allowing wine suppliers access to wine buyers in up to 12 states, or over 50% of the American wine marketplace. With the site, wine retailers and restaurateurs have access to a selection of boutique, artisan and limited-production wines not widely available through traditional distribution channels. Currently over 60 brands, and 300 SKUs are featured.

WineREvolution.com is one product within Inertia’s Direct-to-Trade program, and aims to provide a complementary channel through which suppliers can market their products directly to the trade. For trade buyers, the opportunity is to gain access to wines not currently in their market, and assist in differentiating their wine selections. For suppliers, finding access to new and desired markets is one of the greatest challenges – our program helps overcome those barriers. For both buyers and sellers, our program provides the ability to build desired direct relationships.

This is a big day for Inertia and, we believe, an exciting day for the wine industry at large. Thanks to everyone who made the launch of this exciting product possible: friends, wineries, sommeliers, our loyal trade buyers, and, of course, the entire Inertia team.

Stay tuned for more great things: enhanced functionality, more states available, and many, many more amazing products in the portfolio!

Andrea Johnston, VP Business Development

Posted in General, Direct-To-Trade

Direct-to-Trade: Direct Distribution and Virtual 3-Tier

Posted by Matthew Mann on March 27th, 2009

Direct-to-Trade (DTT) is Inertia’s ground-breaking technological solution that allows trade buyers in key states to purchase wine online from participating wineries’ DTT-enabled websites…connecting buyer and seller in a manner never previously possible.  Boutique wineries producing high quality wine are able to reach restaurants and retailers in markets that were otherwise unavailable to them due to an inability to obtain representation in the traditional 3-tier system. 

In most of our active DTT states this can be accomplished through direct distribution, without any intervention by a distributor in the recipient trade buyer’s state.  In a few others, an even more sophisticated channel is employed…”virtual 3-tier”.

Direct Distribution
Just as some states allow winery direct-to-consumer shipments with direct shipper permits, a handful of states allow wineries to ship direct to trade accounts, bypassing the traditional 3-tier system of producer - distributor - retailer.  Currently there are 10 states with such laws: 

  • AZ,CT, DC, IL, OH, OR, VT, WA, WY and CA (for CA wineries).  Maryland and Massachusetts also have direct distribution but it is currently impractical for other reasons. 

 

Direct distribution is often available only to small production wineries, as many states have production capacity caps ranging from 20,000 gallons annually and up.  Even with this restriction, direct distribution is a viable alternative for wineries seeking to reach key markets in these states.

Virtual 3-Tier
In a select few states wine may still be shipped direct from a winery to a trade buyer in the state without directly touching a state distributor.  In these states, an order is placed with the winery and the transaction is processed by a wholesale distributor partner in the trade buyer’s state, with the inventory “virtually” passing through the distributor even though it physically moves directly from the winery to the trade buyer.  All invoicing and reporting documentation is the responsibility of the distributor of record in compliance with that state’s law. 

This system is possible because of the language of those state’s “at rest” provisions.  “At Rest” laws require wine to pass through the respective tiers of the 3-tier system before reaching their ultimate customer, the trade buyer.  Most state’s “at rest” provisions require a distributor to actually take physical possession of the wine for some period of time.  However, a few state’s “at rest” provisions do not have such a physical possession requirement.  In these states, such an inventory “pass through” is permissible, effectively allowing the wine to ship directly from the producer to the trade buyer while the documentation of the transaction lawfully passes from the producer to the wholesale distributor partner to the trade buyer.

Direct-to-Trade is a growing market channel.  While legal restrictions remain, Inertia is working to develop distribution channels and expand in-market outreach to build producer-trade buyer relationships while working within the legal framework of distribution laws in several additional states.  Keep your eye on our DTT blog for additional opportunities in the coming months.

Matthew Mann,

Posted in General, Direct-To-Trade

Attention Sacramento and Lake Tahoe – Inertia Beverage Group is coming to town!

Posted by tom.traverso on March 24th, 2009
capitalwines.jpg

Inertia Beverage Group is pleased to announce a special wine tasting for members of the wine trade buying community.

  • Meet representatives from the wineries
  • Taste wines previously unavailable to the Sacramento marketplace
  • Learn how to legally buy wines direct from the producers

Date: April 28
Location: Sunnyside Lodge in Tahoe City
Time: 2-6PM

Date: April 29
Location: The Citizen Hotel in Sacramento
Time: 2– 6PM

Please RSVP: Tom Traverso | 415.655.7233 | tom.traverso@inertiabev.com

tom.traverso,

Posted in Direct-To-Trade

Trade Marketing: The Message about The Message

Posted by Pascal Davis on March 24th, 2009

If you’ve not done so already, you need to watch Tina Caputo’s brilliant “Robert Parker’s Bitch”. Setting aside the controversy, one of the many great points of the documentary is that wineries should not let voices other than their own dominate the message about their wines and brand.

At about minute 8:40, Paul Wagner, one of the many very smart people interviewed in this documentary, says:
“We have a distribution system in this country that puts the winery at one end; and any message, any marketing materials that that winery creates needs to work their way through a distributor, a distributor sales person, a retailer, a retail sales person and eventually get to the consumer (…) the wineries don’t have the leverage to communicate directly through the consumer.” - Now that really struck me.

So much of my day is spent thinking about more efficient ways for wineries to directly reach demand and control their sales. Our creed at Inertia has long been to help wineries sell more and better by enabling their online direct-to-consumer channel. But no matter how great your wines are, you better make sure to write some relevant things about your wine and let the words and facts read like the voice of your best salesperson (particularly if that’s your winemaker). So to Paul Wagner’s point, the first conclusion I hear is ‘have something good to communicate’. The second conclusion is ‘think about how to get the message out; don’t rely on others to do it’.

If the message is to say your wine should be successfully summarized to a pseudo-scientific 100-point scale so as to reflect the personal tastes and palate of a minority (hum…) - then maybe you don’t care so much about doing the talking…
Now, if you don’t want to be “Parker’s bitch”, find ways to spread YOUR story. To follow Wagner’s message about the message - getting from the winery, through 3-tier, and to the consumer - you need marketing materials (I mean this as a concept, not just as paper tasting sheet or a press book).

Paul Wagner is a successful PR man (owner and president of Balzac Communications), so he knows about marketing materials. Thanks to some great technology wineries are now able to reach consumers outside the tasting room, through their website and the cool platform powering it, and syndication of their content to marketing agents.

The reality is that some 90% of all the wine sold in the US is not sold directly to consumers. It must first be sold to those (wholesalers) who can legally sell your wine to those (retailers) who will sell your wine to the end consumer. Wineries need to get in/through the 3-tier system. Then they need to get their marketing materials through that 3-tier system to adorn the shelves of fine retailers and help sommeliers support their wine lists.

The message about the message struck me because I live and breathe is Direct-To-Trade. I’m quite obsessive about transferring the lessons of direct-to-consumer sales to the byzantine halls of the 3-tier system. Inertia’s DTT technology now gives wineries direct access to the trade, bypassing or supplementing the “find a wholesaler” hurdle. There is exciting technology in Inertia’s pipeline that will also give wineries, and importers, a very efficient way to get their unadulterated message to the trade in order to sell to a wider audience of industry buyers.

So the best way to control what is said about your wine, or to better influence wine buyers, is to take control of your content first. And when it comes to online trade marketing, you need “clean” wine data, because downloading tasting sheets just doesn’t quite cut it. After all, you would not expect Wine.com to try to sell wine online by sharing .pdf files, right?.. A brave new world of online winery trade marketing awaits…

Pascal Davis, Director, Trade Operations

Posted in General, Direct-To-Trade, Demand Generation, Inertia Products and Services

Fight the economy like a Marine

Posted by tom.traverso on March 23rd, 2009

“Improvise, adapt and overcome” is an unofficial mantra the U.S. Marine Corps has maintained since their inception.  Simple yet pragmatic, the adage has many applications in today’s dubious economy including the wine industry.  Those who adjust their selling and marketing strategies best can persevere while we all navigate the waters of this recession.

So, what is a retailer or restaurant to do when faced with a consumer base that has restricted their spending habits?  Learn who the audience is and placate to them with offerings they can justify.

It is worth noting that during downward cycles of the economy, alcohol consumption increases.  Perhaps fueled by bouts of depression, fear or anxiety, people often seek an outlet.  This can be perceived as a “positive” to the wine industry in that there is a “want” and “need” for a product, unlike expendable items such as high end jewelry.  A “bunker mentality” can also develop as evidenced by past recessions.  In an effort to reduce costs, the population will remain at home forsaking pricey nights out yet, seek some solace with a bottle.  Wine is also increasingly becoming a part of the American diet.  The health benefits and food compliment it provides is a confident indicator to sellers.  Clearly, cost affects  these purchases but with some creativity one can even move their expensive inventory by suggesting some options to their customers.

For example, those in the retail sector have the opportunity to target the folks who aren’t going out.  Advertising wines at moderate price points for everyday consumption would be a natural place to begin.  Including these brands in an email campaign, floor display or with simple point-of-sale materials  conveys to the buyer that you are looking out for them.  “Recession friendly” mixed cases are another option that could help your volume and margins as  everyone is looking for a good value these days.  What about that high end inventory that isn’t moving as it used to?  Suggest the idea of bringing the restaurant experience at home.  A proper meal can still be had with initiative and a cookbook thus justifying that pricier bottle you’re trying to unload.  Regional dishes paired with a related wine may enable the customer to try something new and different.   One could go so far as to create recipes cross marketed with a certain wine on display much like culinary retail shops do with their cookware.

Those in the restaurant world have options too as people will eventually need to decamp and have some fun.  Like the movies or a sporting event, dining out is a form of escapism.  If you can cultivate that emotion along with a clever wine list, active sales can result.  Showing a well diversified by-the-glass program is a start.  Rather than relying solely on showcase wines, offering value oriented brands at lower margins can perhaps encourage repeat glasses.  Conversely, featuring some trophy brands normally reserved for the list into the b-t-g program might actually help move some inventory.  Similar to a floor display, this may signal to the buyer that you are offering them a rare opportunity to sample something great.  Another option would be to include some 375 ml’s.  Sure, they can be difficult to deal with, but might be a way to offer more variety.  Retailers have sales, why can’t restaurants?  If you have some brands that you need to move and won’t compromise your list, advertise 20% off and see what results.  Weekly specials can be rather helpful too when people are most likely not dining out.  Give them an incentive to come in on a random Monday – Thursday with a promotion of bottle discounts for a four top, or the time tested happy hour.

The more you understand your clientele, the better prepared you’ll be.  Adjustments may result in terms of your selling practices, but the personal attention you provide will surely be acknowledged.  Be creative and remember that wine is still a desired good no matter what the Dow Jones says.

tom.traverso,

Posted in Wine Industry Trends, Direct-To-Trade