wine buyers

Why we all have to think like publishers and media players now

Speak for yourself. You might spend your life writing and pontificating, but I actually produce and sell something that people want to consume?

And you do it very well. But how do you get people to know about it and then be able to go out, find it and buy it? In this increasingly switched-on world you can't just send out a press release, or stick a new product on your website and expect people to come and find it. Just look back at all the articles and pieces of information you have read this week. How did you come across them? Chances are they were all pushed out to you in one way or another. Be it a link in a tweet, a post on Instagram, Facebook, or via an email newsletter you have signed up to. Publishers now know they can't rely on you just buying their newspaper or magazine, they have to use a whole number of ways to get their must read content in front of your eyes in some way or other.

Yes, that's all well and good, but what's that got to do with me? I just buy and sell wine.

But think about it. Your bottle of wine is exactly the same as the article, social media post or piece of information that a publisher wants to get out there. Your challenge is just the same. To get your wine under the nose of the people you think are most likely to want to buy it. Thanks to advances in smart technology there are now countless ways to do that. There is the traditional route through straightforward content or advertising in the most appropriate trade and consumer press. But the most successful businesses are the ones that are taking complete control of the messages and content they are putting out there.

Really, how?

Let's take a look at holiday company Thomas Cook. In the early 2000s it, and other traditional travel businesses, were haemorrhaging sales to new online businesses like Lastminute.com and Expedia. Consumers fell in love with the idea of searching for and booking holidays themselves. To fight back Thomas Cook has turned itself into a holiday and media business. It has used high quality content that brings to life the holidays and experiences it can offer which, through careful data analysis of its 22 million plus customer base, it can personalise and target to different people. Content that it pushes out in short films on social media, and via its own publishing platforms both in print and digital and its award-winning website, Excursionist. Content that the search and SEO driven sites of their online travel competitors are not set up or motivated to provide.

Yes, but they are selling amazing holidays. I've only got wine to offer them?

Listen to yourself. What about all those compelling stories you are always telling me you have about every wine in your range. Every wine business, be they a producer, distributor, retailer or restaurant should be using all these story-telling tricks and devices to get their personal messages out to their target customers.

OK, give me some examples.

It all comes down to how well you can use content and technology to get into the hearts, minds and wallets of your customers. Look at what specialist retailers are doing with arguably the most powerful tool they have to hand, the personalised mailer. Different chains, like Majestic, are now sending out daily targeted mailers to specific customer segments with news about, for example, different wines their buying history suggests they will be interested in. How you respond will educate them, and their systems, about the kinds of wines and offers you want to hear about. In just the same way that Deliveroo will send you promotions of types of food it knows you have ordered before.

What else are people doing?

Well, Coca-Cola is running an ingenious scheme where it is asking anyone to come up with creative ideas that “celebrate Coca-Cola” for a new advertising campaign. It has already received over 1,500 free submissions. A pretty canny way to get to see what your customer base really thinks of you. You only need to use one and the rest can help build up your online community. A simple idea that any wine business could follow.

What can wine companies be doing better?

Anyone that is trying to run any form of subscription or wine club model for a start. The ones that stand out aren't just offering a directory and website full of wines and tasting notes. That's just the foundation on top of which all your content that really matters can sit. Be it a regular punchy newsletter that showcases what you do, new voices and videos to follow on social media, an online forum for customers to join in with, Twitter chats with winemakers, or invites to special events. Different touch points that help members feel part of your club. Make sure you get the tone right. Don't talk hipster if your average customer spends most of the year on a cruise ship.

And finally?

Producing good, relevant content is hard. Look back at the content you've been producing and ask yourself if you find it interesting? After all, if you make a big thing of the fact you would drink any wine you sell, then make sure any content or information you're sending out is good enough for you to read and enjoy. Then you'll be more than halfway home. 

* This article was first published in Grapevine that I produce for the London Wine Fair. 

Why we need more than just 15 minutes of fame

That's being a bit greedy isn't it? Why would you want to be famous in the first place?

I don't mean people staring at you in the street famous. I mean working out what it is you want to be famous for in the eyes of your customers, be it the trade or your target consumer. That's a very different kind of fame and it will increasingly determine how successful you are at what you do.

Really, why?

It's a bit like taking your company's values statement that sits pride of place on the wall in reception and turning it into something that really matters. Not to you, but your customer. What is it about you that makes them want to work with you, buy your products and come back for more? It's a harder question to answer than you think, particularly in such a homogenised industry as wine, where essentially everyone is just buying and selling different variations of the same thing - 75cls of wine in a bottle.

But surely every business is different based on the people in it?

They are, but it does not mean the end product or service they are offering is anything distinctly different from a whole number of other like-minded companies. Which brings us back to working out what it is you are really famous for. You can't just say you are dedicated to finding, supplying and selling the best quality wine in the world. There are directories full of companies all claiming to do the same thing.

So what's the answer?

That's clearly going to be different for every business. Look around your competitive set and you will quickly be able to identify what they do best, or better than you. What is it about them that gives them an edge? What would they say makes you unique and different? If you can't answer that, then you've got a problem. Look around different sectors and the most successful companies are the ones that have got a clear business strategy, image and identity. Take Naked Wines. It's all about its Angels supporting winemakers around the world. The Wine Society. A not-for-profit wine club made possible by the collective support of its paid up members. 67 Pall Mall. A private club for professionals who are passionate about wine. John Lewis, a department store you can trust to never sell you a product that is cheaper elsewhere.

But surely there is not an infinite number of ways to buy and sell wine?

If you can't find one then you're in the wrong business. Particularly now that competition is fiercer than it ever has been. Smartphones have put the buying power in the hands of the consumer and your decades of good, loyal service to the wine buying public now stands for nothing if your products come up more expensive on Vivino or Wine Searcher.

So who are the winners and losers in all this?

Potentially it's particularly bad news for the big generic businesses that claim to be all things to all folk. Like our major retailers and national drinks distributors. It means they are effectively all doing the same job - supplying wine from all over the world. Where the only differences between them comes down, in the case of a retailer, to the price or the quality of their private label. Or for national distributors how easy it is to place an order, how flexible they are on delivery slots, and what sort of support, training and trips they offer. They can stand out by being the biggest, with the buying power to supply wines at a lower price. Or they can diversify and specialise in new emerging regions, but then there are independent companies who are already doing that.

So what are they doing?

It's interesting to see how Bibendum is making quality, interesting content as one of its key points of difference. Already famous for its market-leading consumer and trade insights, it is now producing a premium quality e-book, Fine Lees, with customer and producer profiles and magazine quality content. It is also producing a regular podcast, Bibendum Radio, featuring members of its own team, producers and customers to push quality information out alongside the wines.

What else is going on?

We can learn a lot from what is going on in the hospitality and travel sectors. Here businesses that are essentially service providers, be it the food, drink, hotel room or airline seat they offer, are 100% focused on making themselves into brands that are relevant to what their customers want. If you have the money why do you choose one airline over another? Or book yourself into a certain hotel chain? It's the same with restaurants, bars and pubs. Noble Rot became famous amongst its customers for its off-beat, left field magazine, before channelling the concept of the magazine into a restaurant of the same name. Martin Williams, founder of M Restaurants, is quite clear he is all about building a brand, not a chain. A brand famous for providing excellence in service and hospitality that can take those credentials and the community it has created around them into other sectors, be it travel, fashion or whatever. It's what M is famous for that counts, not how many outlets it has.

And finally?

It's why we are seeing so many specialist subscription services starting up. It's where brands are going to be famous. The space available for brands, both big and small, on supermarket shelves is decreasing by the month as they look to build customer loyalty through their own private labels. So instead brands are looking to go direct to their target customers by building up their own subscription models. Just look at the success of Harry's, the US shave club, that is now raking in sales in the UK for its through your door regular supply of razors and cream. It became so successful that Unilever bought it for $1bn. If Harry's can become famous for such an unexciting product as razors, then there has to be enormous potential still for all those businesses, and individuals, who can become genuinely, uniquely famous for the wines they make but increasingly about how they market it, sell it, deliver it and get people coming back for more.

Why consumers want more than low prices to keep them loyal

You sure? Don't believe everything your retail consultant mates tell you.

Well, clearly we all like a good deal and it's always going to be an important part of any buying decision, but if you keep going back to your customer base with just another discount, followed by another, then people will stop buying and disengage with the offers you are sending out. Take Gap. If you sign up to its customer newsletter, you will receive an email every day offering some sort of discount. Customers wait for the 40% or 50% offer to come along before ever spending anything, and even then the numbers drop away quite quickly.

But surely it all comes down to price in the end?

You would be surprised. In a retail industry dominated by the everyday low pricing strategies of the German discounters, price has become less powerful on its own as a way of keeping your customers loyal. Shoppers now expect your prices to be as low as they can. To keep them loyal you have to offer them something else. It's why the majority of retail loyalty cards are no longer just about generating points to get direct discounts. They've subtly changed in recent years to be much more about how a specific retailer can help customers in other areas of their everyday spending.

How do you mean?

Just look at the loyalty schemes you are a part of. Tesco Clubcard, for example, offers you vouchers to spend in restaurants, a trip to the cinema, family days out and other experiences to enjoy. It's not just a way to get money off your next grocery bill. Sainsbury's noticeably gave up its own loyalty programme in favour of Nectar that allows you to spend your points across a number of services or non-competing retailers.

You got any figures to back all this up?

Absolutely. Recent research by Forrester shows that 59% of people want something extra other than price discounts from a loyalty scheme. They want rewards and services not available to others. Get that offer right and 69% of loyalty members will spend more with you and recommend your products and services to their peers. But it's not just about what they get, but how they get it. Fifty six per cent of loyalty customers see good service, like a dedicated customer line, or delivery benefits, as key to that relationship.

Interesting. What else?

Arguably the most disruptive influence on how we all now subconsciously judge a retailer's loyalty offer has come with Amazon Prime. Being an Amazon Prime member does not give you any more money off its products. No, it is all about making your life easier. Ordering products with just one click. Faster, more flexible ways to pay for your goods and then how, where and when you have them delivered. The chance to watch more films, access exclusive programmes (even Jeremy Clarkson), download your favourite music and then share it with friends and family. Being an Amazon Prime member is more of a lifestyle choice than simply a glorified alternative to collecting Green Shield stamps. As those retail consultants say, the trick is to be a loyalty company, not a company with a loyalty programme.

Yes, but the wine industry relies enormously on discounting to get people to buy more wine.

It does and has got into a right pickle as a result. It has created generation after generation of wine drinkers who think price first when deciding what wine to buy. It's why there are so few brands to connect with consumers on anything but a transactional level. But it does not need to be this way. Look at how smaller wine merchants or connected restaurants are becoming so successful. They rely far less on the prices they are charging, or their money off promotions to build a consumer base, but instead get a far more meaningful connection with tastings, events, dinners or winemaker talks.

But how do we make wine promotions more meaningful?

Again it is all about knowing who you are selling your wine too and pushing the right offer to the most suitable customer. Don't just send out a mailer with the same promotions to all your registered customers. Spend the time to break down your lists and then target specific customer groups with the wines they are most likely to buy. Most of all make your offers mobile, and digitally savvy enough that they can be used on smartphones. It might sound like common sense, but too often merchants, retailers or restaurants push the same offers to all customers and wonder why they are not picked up.

So what's the answer?

Well, ideally we would not be thinking about promotions at all. But all the other steps you can take to gain the trust, build the loyalty of your customers. How can you reward them in a way that makes them feel better? It could be providing them with more information about what you sell in ways they can relate to. It might be offering them better delivery options, incentives for recommending their wines to their friends. How you are going to use their data to get them more wines they like, be it online, in-store or a combination of the two. But in the end it all comes down to balance. We all like a good offer, but now we want it to come with bells, whistles and other personal benefits.

* This article was first published as part of the Grapevine views, insights and analysis newsletter produced for the London Wine Fair.  

Why businesses need to be ready to change or risk being left behind

That sounds very philosophical. Have you been raiding the Chinese fortune crackers again?

Oh very funny. Excuse me whilst I churn out one of the most repeated business mantras of modern times and good old Jack Welch's line that if the rate of change going on outside your business is faster than the rate of change inside your business, then chances you’ll soon be going out of business. Or words to that effect. It might sound like classic US management speak, but how many businesses really are able to adapt and cope with changing times?  It is one thing saying you have a flexible business model it is another proving it. But there has arguably never been a more important time for companies to look and change what they are doing.

How do you mean? 

We are living in such disruptive times. Be it politically, economically or socially. The wine trade, for example, is still coming to terms with last summer's collapse in the pound which continues to wreak havoc across the sector, not just here in the UK but around the world. What's more we've not seen anything yet. The UK has not even triggered the infamous Article 50 and we are already seeing the impact the forthcoming Brexit is having on the economy. 

OK I’m all ears... 

What is particularly crippling for business is uncertainty and we are up to our neck in it. Talk to any UK business chief, big or small, good or bad and they all say the same thing. The current trading conditions make normal business planning impossible. Particularly for an industry that is 99% reliant on importing the goods it sells from around the world. Goods that are bought not just on how good they are but how much they cost due to the relevant strengths of the currencies where they come from. Drop the equivalent of a bomb on the value of those key currencies and you have the nightmare scenario we all find ourselves in. Yes, currencies move up and down all the time, but not to this degree and over such a length of time.

So what's all this about the need to change? 

Well, it stands for reason that if the trading conditions you are operating in have changed completely then it does not make sense to carry on doing business in the same way. It is striking how polarised the wine industry has become in the short period of time since the referendum vote. Split between those companies that have carried on as normal and those businesses that are dramatically changing the way they work. This is not just a post Brexit trend, but it has helped intensify and shine the spotlight even more on how companies are choosing to operate. 

 

In what way? 

It is all about taking more control, to coin a phrase, of your own supply chain. In particular taking steps to do all you can to manage the costs at each stage of your own trading circle and where possible put in measures that make them most efficient. That might mean going out and working with producers to make and blend your own wine. It could be bottling more wine in the UK and creating more exclusive labels. Or it might mean looking outside your current markets and opening up new areas, moving in to exports, or shipping wine direct from producers to other customers around the world. It could even mean moving exclusively out of wine and start sourcing, shipping and selling spirits, beers or soft drinks. Standing still and being tossed one way or another based on the whim of the currency markets does not seem the best place to be. 

But are you not just advocating change for change’s sake? 

Absolutely not. There is no point changing your business model if you are not sure a switch in direction is going to work. It might mean just re-evaluating what you are already doing and making sure every part of the business is operating as efficiently as possible. Tweaking 5% to 10% of what you do could have a much bigger impact on the overall business. But spreading your risk, working in different channels, selling different types of wine or alternative drink categories, gives you flexibility and protects you far more from being over reliant on one channel or a limited number of customers. It might even mean we are not all fixated by any movement in the rate of sterling, the euro or dollar. And there is more change going on there than even Jack Welch could handle. 

* This article was first published by Grapevine the fortnightly insights, news and views publication I produce for the London Wine Fair.