Lessons From the Vineyard

What the Wine Industry Understands About Connecting with Consumers

MARCH 05, 2019

In the battle to gain an edge over competitors, companies spend millions of dollars to understand consumers through focus groups, surveys, and sophisticated analytics. But too often, because most people don’t really know what they want, these methods waste time and resources. There is a better way:  educating consumers, rather than listening to them.

Consider, for example, three very different products: coffee, diamonds, and smartphones. Billions of people around the world have enjoyed coffee for over five centuries. But our understanding of the product has changed dramatically since Starbucks debuted in Seattle in 1971 and grew to a global powerhouse with more than 28,000 locations. Similarly, DeBeers took a luxury gemstone — diamonds — and created a broader market for it by associating it with romance and marriage. By 2013, diamond sales topped $70 billion, up from virtually nothing in 1932. The stones were the same, but consumers were taught that they had a new meaning — and value. Finally, in the case of smartphones, Steve Jobs famously argued against the traditional approach: “Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do…People don’t know what they want until you show it to them.”

To better understand how firms succeed by educating consumers, we studied the U.S. wine industry. Winemaking has remained largely unchanged for 7,000 years, but the United States wine industry has ballooned from just over $30 billion in 2002 to more than $60 billion today, making it the largest in the world. The number of U.S. wineries has grown by 50% to nearly 10,000 just in the past decade. Some have redefined great wine, gained the loyalty of passionate consumers, and command extraordinary prices.

How did these firms achieve the benefits often associated with disruptive innovation in an industry in which the technology has remained largely unchanged for millenniums? To explore this question, we have since 2010 immersed ourselves in the wine industry, focusing primarily on U.S. producers but also studying a few from Italy and France for whom the U.S. market is important. These ranged from small, boutique wineries to large multinational firms; some were established in the last 30 years, while others date back to the 14th century. We met with winemakers, vineyard workers, marketing executives, CEOs, critics, writers, importers, and we observed and interviewed consumers in their homes and at wine shops, multi-vendor events, bars, restaurants, and wineries. From 58 interviews, we produced more than 2,300 pages of transcripts, field notes, documents, and photos. We found that, like Starbucks, DeBeers and Apple, wine producers shape markets through vision and social influence. Here’s how they do it.

Step 1: Envision something extraordinary

Wine producers see customers as having limited expertise and demonstrating inconsistent, difficult-to-predict preferences. This is why, rather than seeking and responding to consumer input, they seek to influence tastes.

Christian Moueix, best known for producing France’s legendary Château Petrus from Pomerol, offers an example. Moueix purchased a vineyard in Napa Valley, where vintners make rich, lush, wines that are high in alcohol. Industry professionals call these wines fruit bombs, and the most popular sell for hundreds of dollars. But Moueix told us that he “hates” this style of wine, and he rejects many common California practices. Instead, he prefers an approach he developed in Bordeaux, which includes no role for consumer input. “I make what pleases me,” he explained.

We heard versions of this sentiment again and again. One American winemaker told us that consumers “don’t respect the product … don’t understand wine … don’t care.” Another executive said: “I’m not going to be asking the market what it wants because they don’t know what they want until I show them.”

Some producers even wear their lack of interest in profit as a badge . “We are not here to break even, we are here to break the rules, break records, and break through,” one California winery owner proudly proclaimed.

Instead of responding to consumers or chasing financial returns, winemakers pursue a vision, much like an artist imagines a work. Constrained only by the vineyard and history, they aim to make a personal contribution.

Step 2: Mobilize those with influence 

Even as wine producers dismiss customer input and the pursuit of profit, they value the opinions of peers and influential media and critics, including Karen MacNeil, Jancis Robinson, The Wine Spectator, Wine & Spirits, Vinuous Media, and The Wine Advocate’sRobert Parker.

Critics typically score wine on a 0-to-20 or 0-to-100 scale and provide tasting notes; an additional point from Parker generates €2.80, or $3.00, of revenue per bottle, according to one analysis, while a difference of ten points can mean millions of euros for a large-scale producer, and a perfect score of 100 can support a three- or fourfold price increase.

Some producers engineer wines to earn high scores, but those that shape markets are more subtle. They aim to build influential relationships with industry movers and shakers, rather than to please them. They educate these experts in their histories, winemakers, and visions for the future and thus gain some control over the stories that reach the public. They provide the language needed to help people “discover the soul” of their wines.

One producer we interviewed invites sommeliers, journalists, and others to experience the harvest at his vineyards in France each fall. A small group of five to six guests stay at the elegant home of the owner. Accompanied by the winemaker, the guests stroll through the vineyards, taste wines from previous vintages, and discuss their experience over dinner. The event is designed to make them feel connected to the brand and then advocate for it.

Through these kinds of experiences, a consensus emerges about which wines are excellent, and which are extraordinary, and ultimately this is what defines the winners and the losers in the industry.  Moueix’s Dominus Estate offers a case in point. When he released the first vintage of Dominus Estate in 1988, it was neither a Napa Valley fruit bomb nor a Moueix wine from Bordeaux, which prompted debate: Was it more French or more Californian? Was it really worth $40? Moueix explained his vision to critics and journalists, as a songwriter might explain the meaning of a lyric. He wanted the wine to express its terroir — the soil, the weather, the sunshine, the natural environment — of its legendary Yountville, California vineyard.  He also favored dry farming (no irrigation), thinning the crop, and harvesting grapes early. Thus, Dominus Estate became understood as a unique blend of “Napa terroir, Bordeaux spirit.” Over time, critics began describing it as a new benchmark for the region, and high scores followed. Parker awarded the 2001 vintage 98 points. Three critics awarded the 2013 vintage a rare 100 points—perfection.

Step 3: Let consumers react and share

Consumers looking to buy a bottle of wine confront thousands of choices. In fact, many of the shoppers we spoke to described the experience as stressful; they were fearful of making a poor choice and looking ignorant or of missing an opportunity to make an evening more special.  To navigate, they invariably turn to those experts that the wineries have worked so hard to influence.

Despite questions about the objectivity of wine scores, critics still drive the behavior of retail and hospitality buyers and consumers. One retailer conducted an experiment in which he stacked two California Chardonnays next to each other and posted their Wine Advocate scores and tasting notes below the bottles. The bottle with a score of 92 outsold the bottle with a score 84 ten to one. When the same wines were displayed with tasting notes only, sales were roughly even. As another example, Moueix sold every case available from the 2013 Dominus Estate vintage and bottles that remain on retail shelves bear price tags of $300 or more.

The chain reaction is clear. Vision flows from producer to critic. Retailers stock wines critics and other experts praise, and sommeliers add their newest discoveries to wine lists. Retailers and sommeliers then share their favorite wines with consumers, who share what they’ve bought and enjoyed with their friends and families. The most dedicated visit celebrated wineries, join wine clubs, learn more, and share what they have learned with others. From beginning to end, the process is an educational one.

Producers of wines deemed extraordinary define categories and set benchmarks. Consumers become fans and pay premium prices, despite the availability of literally thousands of excellent alternatives. This ensures the financial success of those firms, even as they reject consumer input and feign the pursuit of profit.

From learning to educating

As products become more complex and consumers feel more pressed for time, we believe that firms in all industries will increasingly succeed by having a unique vision, cultivating expert advocates through authentic connections, driving expert consensus, and allowing consumers to react and share.  Firms that gain advantage through simply responding to customers are vulnerable to disruption. Those that shape markets using social influence and education can endure.

Gregory Carpenter is James Farley/Booz Allen Hamilton Professor of Marketing Strategy at Northwestern University’s Kellogg School of Management. He is co-author of Resurgence: The Four Stages of Market-Focused Reinvention and co-hosts the school’s annual Marketing Leadership Summit, where thought leaders explore the future of marketing.

Ashlee Humphreys is Associate Professor of Integrated Marketing Communications at Northwestern University’s Medill School of Journalism, Media and Integrated Marketing Communications, and Associate Professor of Marketing at the Kellogg School of Management. She is author of Social Media: Enduring Principles.

from:  https://hbr.org/2019/03/what-the-u-s-wine-industry-understands-about-connecting-with-customers?ab=hero-subleft-2

No More Anonymous Browsing

5 Ways Stores Track Your Every Move


Advertisements that pop up on your computer screen are not random. Every time you go online, marketers monitor and track the websites you search, the links you click on and the things you buy. Companies then tailor content and ads specifically correlated to your expressed interests and spending habits. While online, you are being watched, whether you know it or not.

Yet there is a marketing phenomenon afoot that is even more invasive, and it’s happening generally without your knowledge. Here are five ways you’re being surveilled when you shop in the real world, often without even knowing it.

Video monitoring

Think being accosted by salespeople as you enter a store is annoying? Well, some retailers now use video cameras to track customers walking the aisles of their stores. By using video analytics, companies can determine the age and gender of each customer while monitoring exactly what each person touches, looks at and picks up as they peruse the shelves. 

RetailNext, the software that enables these tracking analytics, allows companies to pinpoint high traffic zones in their stores. Heat sensors are used to determine the most highly visited areas of each shop. This gives retailers valuable information as to where to place specific merchandise in order to maximize sales.


Yes, your phone may be “smart,” but when it comes to privacy your mobile device may not be doing you any favors. When you connect to a store’s free Wi-Fi, you are unknowingly allowing them access to track your movements as you shop. You are also giving them free rein to directly market to you.

By using GPS-type coding, companies can tell where you go and where you spend the most time in their stores. This “predictive modeling” information gives retailers important marketing information, like what merchandise you’re interested and in which department you spend the most time.

Store loyalty cards 

Signing up for a store card might sound like a good idea at the checkout counter, but you’re getting more than store discounts by doing so. Grocery store discount cards are an important marketing tool, tracking and storing your spending habits each time you shop. In fact, store cards are one of the first ways retailers began specifically tracking consumers as individuals.

When you use your loyalty card, companies record each transaction you make under your specific customer profile and use your spending trends to predict future transactions. Retailers take your spending habits and use the information for marketing campaigns. While it is nice to get coupons for items you are actually interested in buying, it comes at a cost — your anonymity.

Smart lights 

“Big Brother is watching” is taking on a whole new meaning with the advent of this new technology. Philips, the electronic company, recently released an LED lighting system that can be used in stores to track and communicate directly with your cell phone.

By connecting to your phone’s camera, these lights can tell marketers exactly where you are in a given store. There’s even an app that can be connected to this technology, allowing retailers to send real-time coupons for products located exactly where you’re standing in their shop. It may be nice to get some discounts while you’re shopping, but remember that rebates are not without cost. For one, your ability to withstand impulse buying is diminished.


When you download a store app in order to get discounts and promotions, you are also giving marketers direct access to your spending habits. Opening an app in its specific store allows the company to track your movements and send you promotions to “close the deal” on a purchase.

If you have used the app to make a shopping list, retailers can tell whether you’ve forgotten or decided not to buy a certain item on your list. The company can then send you additional promos or coupons to lure you back into buying that product.

Opt-out law

With the pervasiveness of online data collection, retail stores are given the ultimatum of either using ethically debatable tracking methods or be overrun by savvy Internet retailers. By shopping online, customers constantly give cyberspace marketers invaluable consumer information that allows them to specifically target their market audience. In order to compete with the ever-growing online market, physical stores are being forced to act like Internet sellers to keep up.

Luckily, there have been campaigns to limit consumer tracking, both on and offline. The Federal Trade Commission (FTC) is pushing for a “Do Not Track” bill to be passed by Congress. This law would make it easy for online consumers to curtail being personally monitored by cyber marketers. Likewise, the FTC is also working to make a consumer disclosure law for the use of retail video surveillance in stores. This would also enable customers to opt out of being monitored in certain situations.

Do you think it’s creepy to have your shopping tracked or monitored in stores? Or do you enjoy the benefits of receiving discounts specific to your tastes and interests? 

from:    http://www.thealternativedaily.com/stores-track-your-every-move/

Your Brain on Shopping

How Your Brain Thinks When You Shop

Chad Brooks, BusinessNewsDaily Contributor
Date: 03 July 2012
first place

CREDIT: Winning race image via Shutterstock

Marketers take note — being first has its advantages.

New research shows people’s preferences are unconsciously and immediately guided to those options presented first, especially in circumstances when decisions must be made without much deliberation.

In three experiments, when making quick choices, participants consistently preferred people and consumer goods presented first, as opposed to similar offerings in second and sequential positions.

The study’s authors say their findings have practical applications in a variety of settings, including consumer marketing.

“Our research shows that managers, for example, in management or marketing, may want to develop their business strategies knowing that first encounters are preferable to their clients or consumers, said Dana R. Carney, the study’s co-author and assistant professor of management at the University of California, Berkeley’s Haas School of Business.

As part of the research, the study’s participants were asked to evaluate three different groups, including two teams, two male sales associates and two female sales associates. After being presented with each group’s options, the study questioned the participants on their choices both by asking their preference up front and then having them complete a reaction-time task adapted from cognitive psychology in which participants’ automatic, unconscious preference for each option was assessed.

Regardless of whom people said they preferred, on the unconscious, cognitive measure of preference, participants always preferred the first team or person to whom they were introduced, according to the research.

To test the theory on consumer goods, the researchers asked more than 200 passengers at a train station to select one of two pieces of similar bubble gum within a second of seeing the choices. The study found that when thinking fast, the bubble gum presented first was the preferable choice in most cases.

The researchers believe several factors could be behind the study’s results, including that the preference for the initial choice has its origins in an evolutionary adaptation favoring firsts. The authors point to the example of how in most cases, humans tend to innately prefer the first people they meet, such as a mother and family members.

Carney said the historic concept of the established “pecking order” also supports their findings.

The study, “First is Best,” was co-authored by Mahzarin R. Banaji, professor of psychology at Harvard University and recently published in the journal PLoS ONE.

from:    http://www.livescience.com/21369-shoppers.html

Changing Views of Consumerism

Americans’ Attitude Toward Consumption May Be Shifting

BusinessNewsDaily Staff
Date: 28 February 2012 Time: 11:21 AM ET


greed, hoarding, money, generousity
CREDIT: Dreamstime

Marketers trying to keep their finger on the pulse of American consumers’ shopping preferences may want to take notice of a new survey that suggests Americans are becoming more concerned with substance than they are with appearances.

That’s the finding of a new survey from mini car makersmart USA and Harris Interactive which found that the majority of Americans surveyed preferred smarts and substance over good looks or flashy material possessions.

The survey, which was conducted online in December and included more than 2,000 American  adults, found that 88 percent – both young and old, male and female – would prefer to date a person who is intelligent and philanthropic over someone who is simply attractive.

The survey also found the following:

  • Nearly 7 out of 10 (69 percent) Americans would prefer their spouse to speak another language than have washboard abs
  • Almost 3 in 5 (59 percent) Americans would rather have their partner gain 20 I.Q. points than lose 20 pounds
  • An astonishing 95 percent of women and 80 percent of men would prefer to date someone who is smart and philanthropic like Reese Witherspoon or George Clooney than someone with a pretty/handsome face like Megan Fox or Alex Rodriguez

Survey respondents also indicated that their days of over consumption may be numbered.

  • 97 percent of Americans believe that at least some of the items in their household are junk (i.e., they could easily get rid of it)
  • Nearly one out of 10 (9 percent)  Americans believe they can part with a full half of their stuff
  • 9 percent of Americans believe that 51-100 percent of the items in their household are junk

“The fact that a majority of Americans are deeply concerned with right-sizing their lifestyles and making intelligent choices shows why smart has so much curb appeal today,” says smart USA General Manager Tracey Matura. “People are rethinking whether bigger is actually better and focusing instead on value. They’re looking at how they can cut down the clutter in their lives, whether in their choice of vehicle, home or other purchases, so they have fewer, better things rather than simply more, more, more. And smart is proof that good things do come in small packages.”