Morphing the “Wine Wall” to protect and increase margins.
The big discounters are coming, so now is the time to get started in protecting your margins for wine, spirits and craft beer.
In this example, we reference only wine, but craft spirits and craft beer follow the same model.
The Wine Wall
At the risk of stating the obvious, most retailers set up their displays based on the DNA of the wine.
Remember, the DNA of a wine is: Varietal, Retail Price Point, Wine Source (country/region, appellation)
Each DNA position on the wine wall may have one or more wines that match that DNA. Big brands have done a great job in getting people to recognize their brands and select them from the wall. But the big-brand idea is changing and in the world of specialized small brand and private labels, all of this is changing. See The Big Brand Dilemma. The big brands will become the big discounted brands and sold on-line or at large discounts. The private/protected labeled brands have the opportunity to become the big sellers with protected margins.
The concept is to morph the wine-wall from today’s dependence on big brands to a wine wall that contains private/discovery brand products that can be sold without discounting and thereby maintaining retailers’ margins.
Morphing the Wine Wall
We understand, you can’t change your entire offering overnight. That would be suicide. However, you can morph your wine wall over time and delight your customers in the process. Here’s how:
- Place Private/Discovery label product next to big brand products.
- Be certain you have a Tier3 Interactive-POS shelf talker under the bottle.
- As time goes on, sales will migrate to the private/discovery label product.
- When a big brand product starts being sold by on-line retailers, remove it from your shelf.
- Do this for all placements you wish to protect.
- Soon you’ll have a private/discovery label wine-wall that delights your customers, delivers margin to you, and insulates you from the big on-line discounters.
Here’s the process in detail:
Identify each DNA placement slot you wish to protect. For example, if you have a big-brand top seller, start there. Next to that Big-Brand-Top-Seller place a private/discovery label product of the same DNA. Include a Tier3 Interactive-POS (shelf talker).
Make sure the description and star-ratings are above 4. Be genuine about this. Taste the wine and make sure it outperforms its DNA, meaning if it’s a $12 bottle, make sure it tastes like a $17 or better bottle of wine. Remember, you’re delighting your customer and creating a valued store brand along with your celebrity expertise. Your 2 and 3 star items never make it to the shelf. Let you customers know this.
Now as customers buy your private/discovery label product, they build trust in your store and return to the store for more. They also come back and buy other products you have recommended with the Tier3 Shelf-talkers.
For each placement you wish to protect, implement this strategy. If you need to find product that outperforms its DNA, contact your wine rep and they can source products from Tier3’s group of producers.
For discovery labeled products, you can check for other retailers in the area to see if they’re selling the same label. If it’s a discovery label from Tier3, chances are you won’t find it being sold nearby. That’s because we keep track of all of the Tier3 shelf talkers in a market-place and generally spread the discovery label to retailers not located near one another.