Under the series of gaining knowledge from different industries, this story will focus on wine retailing
I. Type of wines
- White wine: white wine is to extract the red pigments away and utilize grape juice only. Mostly, white wine will provide flavor character including bright, savory, and creamy based on the inputs.
- Red wine: Production of red wine is quite similar to making white wine but only with the addition of grape skin, grape pip and seed incorporated into the fermentation process.
- Rose wine with a pink rose color is made from red or black grape with a short fermentation time, about 12-36 hours only.
- Dessert or Sweet Wine: sometimes called pudding wines, are sweet wines typically served with dessert.
- Sparkling wine is a wine with significant levels of carbon dioxide in it, making it fizzy.
II. Customer demographic
Elder people tend to consume wines than young people, with more knowledge and experience to wine.
Men consume wine more than women, but this is shifting to gender equilibrium.
Varied from average to high-income class
_ Wine industry is a mature one, with large market size and low, stable growth.
_ Major markets include: US, France, Italy, Portugal.
IV. Wine Retailing Model
- Conventional Model
_ A winery sells its wine to a distributor, then the distributor presents their ‘book,’ or a portfolio, of wines to an in-state retailer. The retailer views options from the book and places purchases directly with the distributor. The retailer then turns around and resells the wine to consumers.
- Wine Direct Model
_ A retailer sources the types of wine that sell best to their specific customers. The retailer then places their orders directly with those wine producers. For compliance purposes, an in-state distributor takes title of the purchase order to clear the wine into the state; then the distributor transfers the wine over to the retailer.
_ Retailers can access and purchase the exact wines that fit their customers’ needs
_ Retailers are also saving a tremendous amount of money. By only using distributors for clearing and compliance, the distributor margin is slimmed significantly.
V. Consumer behaviors:
- Wine consumption is driven by the health and wellness trend
The focus on health and wellness is also influencing consumers’ choice of wine. Today’s consumers are aware of the origin and production methods of wine, thus increasingly favoring organic wines as a symbol of higher quality.
One of the fastest-growing consumer trends, is also expected to be reflected in wine production in 2019, leading to more vegan-friendly wines, with key information on the label.
- A rise in consumers’ involvement with wine.
With the growth of the economy, the number of people enjoying wine increases. The consumers, especially young people like to explore and get a consultant for wine
A Decline in recalled wine knowledge
Despite this increased involvement, we are seeing a decline in recalled wine knowledge. In a time where almost everyone owns a smartphone or has access to the internet, information is available within seconds and the need to remember details is minimal. When it comes to wine, consumers are aware of fewer wine-producing countries and regions, which is again a trend we have seen strongly amongst Millennials, especially in the US and the UK.
IV. Online Wine Retailing:
_ Knowledge: Wine is a sophisticated type of products. People buying wine online not only seeking a fast checkout, they want to understand and do comparison.
_ Quick Age Verification: Wine retailers must verify the age of consumers, and sometimes it takes time. An online wine retailer must offer a quick way to do this, typically attach the ID verification photos with camera on the accessing devices.
_ Pageload: An online wine customer will visit more pages than other type of products before making a decision. Thus, it is crucial to not keep them wait for a long time while seeking information.
_ Subscription Model: To provoke consumers, a retailer will send a box with a few bottles of wine to the consumer monthly. Each bottle will come with a guide/introduction to present the consumer
_-Loyalty: For a recurring good, membership program and loyalty points prove great efficiency in retaining customers
_ Machine Learning/ AI: One of the hottest trends, using AI and Machine Learning to analyze taste of consumers.
Omnichannel is becoming a popular trend in Wine retailing due to 2 reasons:
_ The age transition to younger people exposing with internet - People will spend more time in looking for a store/brand before making a purchase decision.
_ People would love to get consultant/expertise and recommendation from the store. A face to face experience and the ability to see/taste the product will enhance the trust of the consumers.