Viewpoint
Merchandising Made Simple
Consumers find wine at their local retail shops by varietal, flavor intensity, price, country of origin and food pairing. Some retailers group wine in an indiscernible way that leaves consumers muttering, "I have no clue how to find anything here."
Yet there is a merchandising technique that is never used--grouping a winery and all of its varieties together. Think about it. Your end consumer shops, scans the shelves and sees wine from an individual winery in seven different spots, but never together, as he or she might at a winery tasting room.
Consider recent research conducted by Liz Thach from California's Sonoma State University, in which she studied U.S. wine-purchasing habits. Survey participants said that of 13 reasons for picking a wine, the No. 2 reason was a recommendation. Of the worst-ranked reasons for selecting a wine, No. 12 was the display; No. 10 was shelf information.
Clearly, there is room for progress in the way that wine retailers merchandise, moving their capabilities from mercurial "recommendations" to something over which they can exercise direct control. The winery-oriented merchandising that I recommend trying is not about cases on end caps at the supermarket. It is about a store that, as a matter of practice, merchandises wine varietals from a single winery together, leveraging the winery marketing to influence consumer purchasing.
The goal would be to capitalize on the brand equity that the winery has built, its desire to expand awareness, and its desire to present itself in the same way it does at the winery tasting room. The store merchandising, overall, would have to be much more progressive--more like a lifestyle boutique crossed with Starbucks. If Starbucks is our daily gathering place, and wine country is our vacation destination, then wine retail should desire to be our daily wine way station.
Likewise, it seems that as the ability for a consumer to identify with a winery via merchandising sharply increases, it would lower the necessity for the recommendation engine, particularly in a sea of choice.
The future of direct-to-trade sales from winery to retailer, eliminating the distributor, gives power to the winery to assist in merchandising, using resources that were previously applied to distributor incentive.
Small retailers will migrate from viewing inventory as an asset and focus on merchandising and inventory turns that are consumer-directed and not discount- or margin-driven.
As the U.S. becomes a more sophisticated wine-consuming nation, consumers will grow more comfortable selecting wines, relying less on third-party recommendations and more on brand affinity--existing or new.
A shift in current practice has to occur, however.
Retailers must purchase based on a winery varietal grouping--not by palate or profit.
Retailers must not purchase based on current inventory of a varietal by price-point. ("Oh, I already have three Pinots at $14.99.")
The retailer must commit to merchandising more like a boutique and less like antiseptic retail.
Even if retailers are not progressive, research is expanding. According to the article "Researchers Consider Factors of Wine Selection" (winesandvines.com), research is being conducted at St. Catharine's, Ontario-based Brock University, where a new Consumer Perception and Cognition Laboratory was created to uncover what motivates consumers to purchase certain wines.
"Purchasing wine is often an overwhelming experience for people," says lab research coordinator Erika Neudorf. "If it is understood how consumers buy wine, then it is easier to create a marketing mix to successfully reach a target market."
Not all retailers, however, are convinced that change is necessary.
Mark Finch of Grapevine Cottage in Zionsville, Ind., notes, "From a retail perspective, (grouping wines by winery) would be a merchandising nightmare for a high-volume store. It would mean constantly rearranging as wines sold out or were released, and make it more difficult to maintain collections of varietals across all price-points. In addition, it is sometimes the case that a winery only produces one or two desirable wines, while their others are simply not (a fit)."
Despite retailer opinion, progress is not made within the confines of "business as usual." Let's hope that the increase in wine consumption leads to innovation in retail, for the benefit of everybody in the wine supply chain--especially consumers who might soon remark, "Ah, what a pleasant place to find a special wine."
Jeff Lefevere blogs at goodgrape.com, where he observes life at the crossroads of pop culture and the wine business. A two-time finalist in the American Wine Blog Awards, Jeff resides in Indianapolis, where he works in Internet marketing. Pragmatically idealistic, Jeff and his wife balance their Napa Cab taste with their Trader Joe's budget.
Yet there is a merchandising technique that is never used--grouping a winery and all of its varieties together. Think about it. Your end consumer shops, scans the shelves and sees wine from an individual winery in seven different spots, but never together, as he or she might at a winery tasting room.
Consider recent research conducted by Liz Thach from California's Sonoma State University, in which she studied U.S. wine-purchasing habits. Survey participants said that of 13 reasons for picking a wine, the No. 2 reason was a recommendation. Of the worst-ranked reasons for selecting a wine, No. 12 was the display; No. 10 was shelf information.
Clearly, there is room for progress in the way that wine retailers merchandise, moving their capabilities from mercurial "recommendations" to something over which they can exercise direct control. The winery-oriented merchandising that I recommend trying is not about cases on end caps at the supermarket. It is about a store that, as a matter of practice, merchandises wine varietals from a single winery together, leveraging the winery marketing to influence consumer purchasing.
The goal would be to capitalize on the brand equity that the winery has built, its desire to expand awareness, and its desire to present itself in the same way it does at the winery tasting room. The store merchandising, overall, would have to be much more progressive--more like a lifestyle boutique crossed with Starbucks. If Starbucks is our daily gathering place, and wine country is our vacation destination, then wine retail should desire to be our daily wine way station.
Likewise, it seems that as the ability for a consumer to identify with a winery via merchandising sharply increases, it would lower the necessity for the recommendation engine, particularly in a sea of choice.
The future of direct-to-trade sales from winery to retailer, eliminating the distributor, gives power to the winery to assist in merchandising, using resources that were previously applied to distributor incentive.
Small retailers will migrate from viewing inventory as an asset and focus on merchandising and inventory turns that are consumer-directed and not discount- or margin-driven.
As the U.S. becomes a more sophisticated wine-consuming nation, consumers will grow more comfortable selecting wines, relying less on third-party recommendations and more on brand affinity--existing or new.
A shift in current practice has to occur, however.
Retailers must purchase based on a winery varietal grouping--not by palate or profit.
Retailers must not purchase based on current inventory of a varietal by price-point. ("Oh, I already have three Pinots at $14.99.")
The retailer must commit to merchandising more like a boutique and less like antiseptic retail.
Even if retailers are not progressive, research is expanding. According to the article "Researchers Consider Factors of Wine Selection" (winesandvines.com), research is being conducted at St. Catharine's, Ontario-based Brock University, where a new Consumer Perception and Cognition Laboratory was created to uncover what motivates consumers to purchase certain wines.
"Purchasing wine is often an overwhelming experience for people," says lab research coordinator Erika Neudorf. "If it is understood how consumers buy wine, then it is easier to create a marketing mix to successfully reach a target market."
Not all retailers, however, are convinced that change is necessary.
Mark Finch of Grapevine Cottage in Zionsville, Ind., notes, "From a retail perspective, (grouping wines by winery) would be a merchandising nightmare for a high-volume store. It would mean constantly rearranging as wines sold out or were released, and make it more difficult to maintain collections of varietals across all price-points. In addition, it is sometimes the case that a winery only produces one or two desirable wines, while their others are simply not (a fit)."
Despite retailer opinion, progress is not made within the confines of "business as usual." Let's hope that the increase in wine consumption leads to innovation in retail, for the benefit of everybody in the wine supply chain--especially consumers who might soon remark, "Ah, what a pleasant place to find a special wine."
Jeff Lefevere blogs at goodgrape.com, where he observes life at the crossroads of pop culture and the wine business. A two-time finalist in the American Wine Blog Awards, Jeff resides in Indianapolis, where he works in Internet marketing. Pragmatically idealistic, Jeff and his wife balance their Napa Cab taste with their Trader Joe's budget.
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