Allocations Aren’t Just For Luxury Brands. Wine Retailers, What Are You Waiting For?
Increase your sales, satisfy your customers, and carve your niche as a wine retailer by making allocations part of your sales model.
High-end luxury wine brands utilize the allocation sales model almost exclusively. They segment their customer list based on a combination of parameters (total dollars spent, buying history, buying commitment, consistency, etc) and each segment receives an exclusive, targeted email offer a few times a year based on the winery’s release schedule. “Starting Thursday, we have only 200 cases available of our critically acclaimed 2018 Reserve Cabernet from the Upper Vineyard. Set your alarm and be prepared to log on before they’re long gone!”
A perception of scarcity — and exclusivity — grips the customer base. The stakes are high. And when the timer runs out, every last bottle is spoken for. Inventory moved swiftly, the resulting cash flow promising, and customers who missed out wait in anticipation for the next release.
Reserving an entire channel of limited-access wines for your highly valued customers is indeed a powerful tool for marketing, engagement, and sales. And yet, allocations like this are an underrated resource in the wine retail space. There’s a belief that allocations are only for high-end wineries, while others think launching an allocation takes too much work. But whatever is holding wine retailers back simply shouldn’t.
Don’t let luxury wine brands have all the fun. Here’s how to make allocation events benefit your wine shop.
There are numerous ways to present an allocation offering. You could offer a selected set of curated wines to an exclusive grouping of customers with previous interests based on producer, variety, or appellation.
Allocations offer a broader private sales model for your wine retail store
Adopting an allocation model allows your store to extend a high-end, exclusive experience to select customers for limited availability products. That means sought after selections don’t have to be sold to the general public, many of whom may not appreciate the rarity, uniqueness, vintage, or producer’s history. Instead, you can reserve the most coveted cases to be presented in exclusive allocation events, for which only your most loyal customers are extended an invite. These events typically only happen through your website.
But what is an allocation model exactly? It’s simply a sales method that allows you to handpick groups of customers based on their previous buying history or other such criteria you set. It is most common to place customers into different tiers by determining:
• Longevity. How long have certain customers been loyal to your retail shop? Have they been buyers for many years or did they just recently sign up?
• Recency. Have they purchased anything in the last couple of months or has it been radio silence for the last two or three years?
• Consistency. Do they purchase often or has their spending seemed sporadic?
• Total dollars spent. Are they big spenders or do they look like they’re on a budget?
• What wine they purchased. Do they equally support your entire lineup of wines offered, or only cherry-pick the gems?
What you do next is up to your creative discretion, but generally looks like this…You launch a series of emails to customers, perhaps one to first introduce this new allocation model, and that over the course of the year, your team will be highlighting particular products that will be made available on a limited basis. Additional campaigns called “Save the Date” can follow, where you announce one wine—presenting the producer, vintage, variety, vineyard, and any other mouth watering details. Once that date arrives, a final campaign is sent, inviting customers to view a private allocation cart via your website, where they’ll have exclusive access to a limited number of bottles, not visible to the general public.
You can provide customers the option to wish for more bottles, beyond their maximum allocated amount, but those quantities are not guaranteed and will only be “granted” if inventory remains at the end of the offering.
“A parcel of this release, acquired directly from the importer, is now available! We wanted to make sure our loyal buyers had access to it first before announcing it to the general public via our website. Click here to access your personal allocation.”
There are numerous ways to present an allocation offering. You could offer a selected set of curated wines to an exclusive grouping of customers with previous interests based on producer, variety, or appellation. Or you could launch a larger, common allocation, featuring a new release sent to people on your list who purchased a previous vintage of that same wine. Maybe you want to lure and convert first-time buyers by giving them a chance at purchasing some bottles along with a discount.
How allocations boost your bond with customers and elevate your marketing efforts
As a retailer, you always have special wines available from distributors or importers. Sometimes they come with limited availability. Sometimes they’re too good to just put on the shelf without creating some hype through your commerce enabled website first.
At the same time, you’re always thinking about how to engage your long email list of loyal customers. And, you have another set of customers who are always on the lookout for exciting new wines to try.
An allocation model gives your shop and your sales team occasion after occasion to target, connect with, and satisfy each subset of customers.
Consider your customers who have an emotional attachment to a certain wine brand, variety, or appellation. That’s not a rare thing; wine is an emotional product. Creating an exclusive offering for these customers, and their fellow VIPs, by giving them access to a vintage from that wine brand or appellation can only solidify their relationship with you.
Plus, if you present a campaign by stating something along the lines of, “Since you have purchased this wine in the past…” or, “For our most loyal customers…” you’re showing that customer you’re looking out for them. Who wouldn’t want a heads up when the important, rare, and unique bottles are up for sale? Giving your customers a chance to score something rare can form a trusted, valuable connection — one they’ll surely want to tell their friends about.
At the end of the day, an allocation approach enables you to target a niche group of customers who want to feel a connection to your shop. And while it does require some work to set up the allocation, identify, and target the right people, it’s a stronger sale in the end. And you don’t even have to do that part alone.
Allocations reduce limited availability issues and create more happy customers for your shop
If you have thousands of customers on your mailing list, but only a few cases of a highly sought-after vintage in stock, you’re sure to drum up interest when you send out a marketing campaign to promote it. But on the flip side, you’ll always breed resentment among the rest of the unlucky crowd who weren’t able to buy it.
And sure, maybe they’ll find and buy something else they like. But they’ll be bummed they weren’t fast enough to get a bottle or two, and in looking for it elsewhere, they may find your competition.
So, instead, imagine this: You send an exclusive offer to a very limited set of customers. Sure, some may still be disappointed if they didn’t score a bottle in time. But you’ve promoted it to fewer customers, billing it as something very exclusive. You’ve set the expectations. Even those who couldn’t buy a bottle in time still feel valued and part of an exclusive circle of customers.
With an allocation approach, you increase the chances for those lucky few VIPs to secure an order before the wine sells out. At the same time, you give those who were not able to make a purchase an incentive to act swiftly in the future on wines they covet. Your customers have better expectations — and stronger motivations for next time.
To lighten the set-up lift, having an integrated commerce system with your website can go a long way. Not only should the right system capture valuable information to tell you which customers you should target, but it should also be able to streamline your allocation event logistics. And if it doesn’t, it wasn’t designed and built for the wine industry. And if it wasn’t designed and built for the wine industry, why use it?
As you explore adding allocations to your sales model, know that there is just as much opportunity as there is complexity. But there are also people in your corner who are ready and willing to show you the ropes. All it takes is connecting.