Wine has always been a product that sells better to demographics with disposable income. This is part of the reason well-established baby boomers are still a large part of the market, and why gen Xers are still an untapped demographic, while millennials have not yet become the largest wine demographic despite being the largest buying population. (The SVB/Sovos 2019 State of the Wine Industry presents the numbers to back this up.)
But even among wines, some are seen as “luxury” brands, positioned as high-end labels and vintages meant only for the affluent. It’s clear why a winery would want products that appeal to this demographic:
- They are not turned off by price
- They are more likely to be repeat buyers
- Sales to this demographic likely will be much more “recession proof.”
If you can market and sell to a more affluent customer base through the DTC channel, even better!
Some wineries are more successful than others at marketing to the ultra-affluent. Gaining the trust (and share of wallet) of this demographic takes skill—though it is a skill set well worth developing.
Part of the challenge is that the recipe is constantly changing. Today, with the rise of eCommerce and shifts in the psychology and values of the affluent, you cannot use the same strategy that worked 10 or 20 years ago to entice buyers of luxury brands.
So how does a winery market to the affluent? More specifically, how can a winery reach them through the DTC channel to maximize profit and share of wallet?
Discovering What Motivates Luxury Purchases
What motivates a wealthier person to purchase a specific brand may well be different from what motivates the population at large. But what that is, is changing with the times, too.
The received wisdom is that expensive purchases by the wealthy were a kind of social signaling. It indicated one’s level of success in life, as well as one’s personal taste. Paying large sums for a premium luxury brand was not only about the quality and taste, but about the sense of privilege. Wine was an example of this par excellence.
All that is changing now. For one thing, scarcity is not what it used to be. Luxury goods are now available to a wider range of consumers. Developments in logistics and eCommerce have allowed affluent consumers to search far and wide for the specific things they want, and vendors can reach those far-flung audiences. When all brands are readily available with a mouse-click, people don’t perceive scarcity as a mark of quality or refinement. They simply find it a nuisance.
Social signaling now is done differently. Today, consumers in general, but especially affluent consumers, care if a brand is sustainable, for example, or if it is ethically sourced. They want to know not that other wealthy people buy and consume it, but whether there is a story behind the brand worth supporting.
Trust is changing, too. The affluent don’t necessarily look for “big name” luxury brands. They are willing to try things that are off the beaten path. To do so, they often look to trusted experts and influencers to get an idea of what is worth trying (i.e. what will yield the most worthwhile experience).
In other words, the traditional “conspicuous consumption” model is dying away and being replaced by a drive for “experience luxury,” tempered by a “socially responsible” sensibility. To market wine to more affluent consumers, wine brands have to recognize this, paying attention to the wine experience, as well as the wineries’ values, as reflected in their story.
Brand and Reputation
Naturally, brand recognition and reputation are going to drive a lot of the action when it comes to the more affluent. The first step, then, is developing a brand (or rebranding) in a way that will appeal to this demographic.
Doing so will mean revising your messaging and your visuals to speak to the motivations above. For example, does your winery use sustainable practices or ethical sourcing? Mention this fact. Do you have a story about your winery? Share it. Do you create a certain kind of experience in your tasting room? Remind them of it. Remember, there is an entire consumer experience surrounding the wine itself. Make that experience as memorable and positive as possible.
One problem wineries have to combat when it comes to brand awareness is the tendency to dilute their brand. This can happen in a number of ways:
- The price point is set much too low
- The brand is on sale too often
- Pricing gimmicks (for the product or for shipping) are used
- The brand doesn’t seem exclusive at all
- The name and label make the wine look like all other luxury brands (i.e., it doesn’t seem unique)
While all of these might seem like tactics to get a consumer to buy when he or she is on the fence, they in fact send out a signal that your brand might not be a worthwhile experience after all.
Instead, wineries should invest in upping their reputation by providing white glove service. A number of nationally recognized brands already do this; we wrote about them in our white paper “White Glove Service: Nine Case Studies That Reveal the Keys to Building True Customer-Oriented Organizations.” (This paper is free to download.)
We’ll just note here that a large part of the brand experience, especially when it comes to DTC, will be in the delivery experience itself. This is why you should pay attention to things like kitting and the “unboxing experience,” as well as the details of the final mile delivery.
And of course, your winery’s own unique story will be something new and novel as well—and it’s something that the competition can’t simply reproduce.
Getting the Influencers and Referrers Excited
Once you have a brand you feel will appeal, it’s time to get the attention of influencers (including the media), as well as referral partners. This will be as important as your DTC sales themselves, as your more affluent customers will look to well-established industry influencers for cues as to what’s worth trying in the world of wine.
Here, then, are some tips for building your network of referrers and influencers:
- Reach out to potential influencers and referrers the way you would reach out to your best customers. Commit time for reaching out to them. Send them gifts and samples (though be careful about how you send samples). Send updates. Follow-up.
- Research which journalists are writing about wine. Contact them and offer yourself as a resource. Journalists are always looking for good quotes about recent trends. Maybe you have an opinion on the popularity of cabs, or what makes for a good wine blend. Or maybe you used the latest viticulture techniques in making your most recent vintage. See who you can share this information with and get your name out there.
- Create awesome looking collateral that your referral partners can use. For example, if you are trying to get people to come to your tasting room, create some slick brochures and flyers for all the local B&Bs and tour group companies. If you want more people to follow you on social media, provide other social media influencers in the wine space with great content to share– especially if that content mentions your winery (see above).
- Have your wine professionally rated. Share the results.
- Rinse and repeat. You won’t generate buzz by doing these things one time. They need to be part of an ongoing and sustained effort. Innovation takes creativity and vision, but influence takes persistence and grace.
Going Digital (Yes, Even for Luxury Brands)
The world of luxury goods is going digital too.
Worldwide online sales of luxury goods (not including cars and travel) grew 23.3% over the course of 2017, according to a 2018 report by Internet Retailer. (Compared to a mere 5% growth the year before.) By these numbers, the online sales of luxury brands are growing nearly five times faster than total online sales, and already make up 9% of all luxury sales worldwide.
And while luxury brands have managed to create some beautiful-looking websites, they are still playing catch-up when it comes to eCommerce, user-experience, and social media engagement.
We noted a while back that this tended to be true of the wine industry in general—see our piece “To Go Direct, Go Digital.” Things are changing fast on this front, though, and the brands that figure out the digital realm first will be able to more effectively reach these affluent markets earlier.
Take social media, for example. Digimind, provider of social listening and market intelligence, found that 93% of all consumer interactions with luxury brands happened on Instagram. If you’re not leveraging this social network, you’re missing an opportunity to build your luxury brands.
Targeted advertising can also help you reach consumers who meet your criteria for income, and who already like or follow other luxury brands.
Influencers tend to have a large presence on social media as well. Use these channels to contact them and share information. Invite them to try your product, visit your tasting room, and so on. If the connection is there, don’t be shy about asking for the mention.
User experience at the point of purchase is important, too. For an eCommerce store, this means things like simple navigation across platforms, multiple payment methods, customer histories, and “one-click up-sell” capabilities. For an ongoing wine club, the user experience should be centered around consumer control—i.e., letting the consumer determine how many bottles of wine come in a shipment, the frequency of shipments, and when to receive them, on their schedule.
So, while a stylish website is not a bad thing, also look to investing in social media, as well as a website (and/or online store) that is intuitive and well designed from the perspective of the end user. (Some ideas for this here in our interview with Andrew Kamphuis of Commerce7.)
Need More Guidance?
Targeting high-end consumers is not rocket science, but it does take an appreciation for their motivations and perceptions.
And, as we’ve hinted above, much of this perception is formed outside of enjoying the wine itself. It starts with engagement online, and follows through to the final mile delivery experience itself.
If you would like more help on crafting just the right experience for your affluent consumers when it comes to packing and delivery, reach out to us here at Copper Peak. We’ll help you get started.