- How do wineries leverage their data to make better wine pricing and sales decisions?
- What can data tell us about preparing for the upcoming holiday wine sales?
These were two of the questions addressed at this week’s Wine Industry Sales Symposium. The free half-day virtual online event was facilitated by George Christie from the Wine Industry Network and supported by various sponsors.
Two of the four sessions focused on the use of data to make DTC (Direct-to-Consumer) wine sales decisions. Here are two takeaways from the initial data session “Using Data Analytics to Optimize DTC Pricing and Inventory Depletion” sponsored by Mather Economics and NielsenIQ.
1. Use Your Own Winery Data for Pricing
Wineries often make pricing decisions based on neighbors’ products but Bob Terzotis from Mather Economics says wineries actually have their own data for determining pricing strategies. Historical transaction data comes from the POS (Point-of-Sale) platform, depletion data and information on wine club members are some of the data points used for pricing. Mather Economics includes macroeconomic indicators in their predictive analytics models. Since not everyone has consultant resources, Bob has seen wineries use Excel for analysis.
2. Use Price Elasticity Models for Pricing
Price elasticity is an economic measure of the change in the quantity purchased of a product in relation to its price change. The formula for price elasticity of demand divides the percentage change in quantity demanded or purchased by the percentage change in price. If price elasticity is greater than 1, the good is elastic and means the price change did affect the supply or demand. If price elasticity is less than 1, it means the change in price did not impact the supply or demand. Mather Economic looks at the price elasticity of each SKU (stock keeping unit) to determine sensitive to price changes. The ability to remove emotions in pricing decisions was an important takeaway in this session.
The other data focused session “Maximizing Holidays Sales; The Data Tells Us When, and How” was sponsored by Alvara and Wine Direct. Here are two takeaways from that session.
3. Consumers Are Shopping Earlier for the Holidays
Kari Scott from WineDirect shared that the Global Consumer Behavior Report (2022) indicates consumers are shopping earlier due to supply chain and other concerns, as much as six months ahead of the season. The 2021 DTC Impact Report provides evidence that the peak holiday season now begins in September instead of October. Cathy Huyge from Enolytics shared some additional demographic trends and expected channel shifts during the holiday sales season. Much of this information is based on the robust dataset behind the 2021 DTC Impact Report supported by WineDirect and Enolytics.
4. Segment Your Customers to Maximize Sales
Alex Jones from Gary Farrell Winery provided insider tips on maximizing DTC holidays sales using data. This included defining Key Performance Indicators (KPIs) and segmenting your audience. That means dividing your customers into groups such as by channel or demographics to analyze their buying behaviors. The data suggests five ways to segment your customers for special holiday promotions. The five groups to target are the gifters (different delivery from billing address), previous holiday buyers, last-minute buyers, customers-at-risk and club members.
The Wine Industry Sales Symposium hosted two additional informative sessions, The Evolution of the New Luxury Consumer and The Roadmap for Tapping into the Corporate Sales Opportunity.
