Wine consumption and sales strategies

Wine consumption and sales strategies. The economic crisis of these past few years has hit hard in many wine producing areas. Being couped-up at home has meant consumption has sky-rocketed, but people  have preferred less expensive products, making their purchases on the occasion of promotional sales, and increasingly more often resorting to online speciality sites, and in particular those that cater for their individual taste and personalisation. 

Alongside price sensitivity, consumer personalisation shows greater attention for the product׳s quality characteristics, choosing wine produced using techniques that respect the environment or are expressions of the variety and value of the region they are from. These differentiated behaviours within the general picture point out a complex system in which consumers orient their choices in a non-homogeneous manner.

Wine witnesses two apparently opposing phenomena: the increase of mass-produced wine, and the specialisation towards narrow markets, characterised by excellent product quality in terms of importance of terroir, appellation, and geographical identity.

These tendencies are also reflected in the sales channels preferred by consumers. In this regard, the retail sales figures of wine in the principal consumer countries show that most purchases are made at large grocery stores and discount stores, where the prices are more competitive than in other shops.

Various studies have confronted the theme of wine attributes that influence consumer purchasing behaviour. Price constitutes a decisive choice criterion, as well as an important sign of quality. The influence of price on choice is all the more marked for consumers who have a low involvement with wine. Moreover, several authors report that this attribute can be a strong choice driver independently of the presence of other factors: given a certain situation of consumption, the consumer indeed seems to decide the price bracket for his/her choice even before purchasing.

Various reports suggest that there are other elements connected with price that influence the consumer׳s choice. We are referring, in particular, to promotional activities, which are sales strategies widely diffused especially in ecommerce. These are implemented by means of defining different systems, such as the presence of particular signs on the label, or depth of detail divulged on your site. Often the more information you offer the greater the rate of purchase. Not only does greater detail increase it’s SEO value thereby being seen by more consumers, but when found it offers an education enjoyed, but that they would otherwise deny enjoy being provided.

The purchase of wine during a promotional sale is associated with consumers who have a low involvement with wine, as price is an important purchasing incentive. Furthermore, the choice of a product on promotional sale is associated with the consumer׳s loyalty to this very product brand: the consumers most loyal to the brand tend to stock up on their favourite brand during promotional sales and wait for another promotional sale of the brand, at the same sales outlet or at another, to purchase it again.

Given the strong tie that exists between wine quality and region in the broadest sense of the term, the country of origin constitutes a very important product attribute. Numerous authors indeed point out that it is the principal driver in wine choice, and that the presence of the wine growing region on the label increases the consumer׳s trust in the overall product quality, and indeed in turn retailer.

Grape variety is also a product attribute that influences the consumer׳s decision to purchase wine. The importance this characteristic has on choice, however, differs according to the territorial context. In fact, in “New World” markets, it seems to replace the country of origin while in Europe, the weight of grape variety seems to be less than that of denomination of origin. In this regard, several authors claim that the greater the consumer’s involvement with wine, the greater the importance of denomination. Other attributes connected to the type of wine are colour and whether it is still or sparkling.

Brand reputation makes it possible to identify the product via a connection with the producer or with one׳s own consumption experiences. It is a quality indication, but by itself it may not prove to be a cue strong enough to orientate choice, as information like price or country of origin overrides it. The same can be said for brand loyalty, which though constituting a shortcut in product choice, does not prove decisive, as it has been shown that the consumer may change brand so as not to forfeit other characteristics. Moreover, the consumer’s behaviour towards a brand is strongly tied to the product׳s market share, which means he/she is oriented towards wines with higher market shares.

Generally speaking, an overall effect exerted by the various predictors on the performance of the wines sold can be outlined. In fact, the variables of price and promotion volume always have a positive influence on wine performances, accentuating the positivity of good results for firms with positive performances, and attenuating the negative results for the other firms. The discount variable instead always has a negative effect on performances. This means that high discount percentages are always associated with negative performances of wines. Better to stick to price-points (levels) and service these as different entities.