Supermarkets & other retailers Flashcards
What two approaches are there to own label wines?
Either advertise that it’s own label (like Taste the Difference or Finest ranges) or try and keep it less obvious (M&S and Walmart approach)
What are the benefits of making an own label wine
Means consumers can’t do a direct price comparison. Also builds loyalty which is rare amongst supermarket shoppers
What are the requirements for being a supermarket wine supplier?
Volume. You need to have enough wine to fulfill their large requirements
Pros and cons of supplying to a supermarket
Pros
Supermarkets often employ a winemaker who can help with the overall quality of the wine, not just the supermarket SKU.
Good visibility and volume
Cons
Not much control over pricing and they will buy cheaply
Supermarkets charge fees for listings and prime shelf location
Contacts with supermarkets can be very demanding. Name some of the criteria they might stipulate.
Volume Quality Labelling Packaging Timing of delivery / availability Pricing Delivery
What are 5 tactics deep discounters use that distinguish them from regular supermarkets
- lower margins working instead on volume
- less premium area meaning lower rent
- less showy stores with products displayed on pallets
- fewer brands stocked
- rarely use big brands as they have additional costs of marketing budgets
- use end of line smaller volume products which they can buy more cheaply
- use own brand products
Are convenience stores more or less expensive than larger stores. Why.
More expensive
- premium location
- higher number of staff for the side of the shop
- because they can be
- They need to pay franchise costs to parent stores
Open for longer; often 24 h)
What kind of range of wines do convenience stores offer
- smaller range
- tend to have supermarket favourites
- 7-11 and spar tend to have own exclusive brands
What are the differences between supermarket and specialist wine retailer consumers
Supermarket consumers
- price driven
- less confident about wine
- not brand loyal
- Low involvement
Specialist
- high involvement
- don’t mind spending more on wine
- willing to be up sold
- interested in wine stories
- less big brand driven
Pros and cons of the hybrid model
Pros
- great way to lure in new customers
- showcase new wines
- shift slow moving lines
- increase margins
- open to a new audience
- captive audience willing to be sold to
Cons
- often requirement to serve food which means storage and health standard equipment
- washing and drying of glasses equipment required
- possible risk of wastage of unwanted wines
- additional staff costs as they are open longer
- specific license required to serve onsite
Which country has the greater number of online sales - China or the us?
China at 20% of sales being made online. The us has 2%
What might attract a producer to sell to a specialist retailer rather than a supermarket?
- halo effect
- lower volume requirements
- higher average price
- more control over minimum pricing and discount
What is the benefit of online retailing for specialist retailers that have a bricks and mortar presence as well? (although kind of holds true for all retailers)
- Extended audience reach
- opportunity to showcase full range
- opportunity to share news and retailer personality
What is the definition of fine wine
There isn’t one really. It tends to be wines from prestigious regions made in small quantities which can command super premium prices.
Regions include burgundy, Bordeaux, champagne, California and Australia
What is a secondary market wine
Wine that is bought with the intention of being resold
How are fine wines commonly accessed in California?
Through wine clubs, like screaming Eagle or Harlan.
What is Liv-Ex
It is ac trading platform for fine wines, bringing wines and buyers together
Name two bespoke wine investment companies
Amphora and cult wines
While London typically was the hub for wine investment, what tipped the balance in favour of Hong Kong in recent years?
The abolishment of excise duty in 2008
What are two possible draw backs of buying wine at an auction
1) The lack of knowledge about how it was stored. Although the large houses, Sotheby’s and Christie’s, boots perform detailed background checks
2) fakes- such as the Rudy Kurniawan Clos Denis scandal and the Thomas Jefferson affair
What is the principal requirement of consumers / participants for wine clubs to function
minimum volume ordering over the course of a year. Either their own choice or premixed boxes.
Pros and cons of online retailing
pros:
- no rental cost / overheads
- lower staffing costs
- opportunity to show off all the merchandise (benefit for larger retailers)
- Opportunity to present lots of information to customers
- opportunity to cross sell / suggest alternatives
Cons
- cost of website (user experience, aesthetics, security, SEO, purchasing facility)
- cost of delivery (click and collect option for places with bricks and mortar outlet)
- requirement to maintain website up to date
Why has the role of duty free shifted, and now been rebranded Global Travel Retail?
Because in free market zones, like the UK, the benefits of duty free zones - namely no duty charged - was of minimal importance. GTR now focuses on high value products that are exclusive to that sector
What are the margins like for products sold in GTR?
Surprisingly, low. Because the cost of high cost of space and the strong negotiating power, buy prices are low, too.
