Fine Wine merchants in the internet age
In a world awash with technology, what’s the role of the Fine Wine merchant? After all, can’t wine lovers just do an internet search and order what they’re looking for?
No, it turns out. When ARENI and Wine Intelligence did a survey of Fine Wine lovers across four significant markets – the UK, the US, Hong Kong and China – it became clear that while Fine Wine lovers love checking out the internet, they call on their favourite Fine Wine merchant when it’s time to buy.
For a good reason.
Multiple buying sources
While Fine Wine lovers in all four countries surveyed buy their wines from a Fine Wine merchant in the first instance, the British and Americans are prepared to buy wine from ordinary liquor stores. In the case of the British, even Fine Wine buyers will pop into the supermarket for wine now and then, which may reflect the fact that British supermarket buyers are highly knowledgeable about wine and often create their own blends; there are sometimes genuine bargains to be found. Chinese and Hong Kong enthusiasts, on the other hand, prefer to buy either from dedicated wine stories or from duty free. Department stores were also a possibility, and Chinese consumers are also interested in buying directly from producers.
While Chinese consumers are famously in love with e-commerce, it’s consumers under 35 who are more likely to buy wine through apps and online auctions. Chinese consumers also use the internet to learn more about brands, producers, regions and countries.
But overall, however, the data suggests that fine merchants still play a significant role in connecting buyers and sellers, even given the rise of the internet – and that this holds true in all the markets surveyed.
There is one important caveat, however. The vast majority of Fine Wine buyers, regardless of their country of origin, rely on the Internet to discover prices and tasting notes – even the wealthiest like finding bargains. This makes price checking, tasting notes and critics’ reviews are important in all four markets.
And this can present a problem for Fine Wine merchants.
Disloyalty is common
Merchants and intermediaries should not take their customer relationships for granted. Research conducted by Harvard Business School suggests that high-end customers can be the first to disappear if a competitor offers better service. And what’s clear from the research is that Fine Wine consumers are extremely price aware – so if someone else can offer them the same wines at a better price, they may well defect.
Disloyalty is a well-known problem within luxury industries, from fashion to cars. And the advice that luxury brands give one another, is to focus on servicing customers, not just at the time of sale, but before and after.
“Excellent, personal service underpins the retail encounter, and it’s this lasting impression that forms the foundations of the customer’s relationship with the brand,” advises mycustomer.com
Fortunately, this shouldn’t be a problem for most Fine Wine merchants, because they offer something that Fine Wine customers crave – access.
Tangible relationships
Fine Wine consumers want to participate in the world of wine, by experiencing it for themselves. A significant proportion of Fine Wine lovers — 54% of UK buyers, 51% of US, 42% of Hong Kong, and 52% of Chinese — seek to visit wineries, while between 31% to 49% of overall buyers want to participate in events and festivals. This means that merchants who can offer winemaker dinners, private tastings, or even invitations to chateaux, will be able to keep their customers.
Access is everything, and that’s hard to get – even for collectors with the deepest of pockets. Well-connected merchants can, of course, source rare and allocated wines, whether they’re released En Primeur, or only available on the secondary market. They also generally have personal relationships with châteaux, which means they can organise dinners, tastings, and even winery visits. These kinds of events are simply not open to most people.
And this is exactly what wine collectors are looking for. In the USA, people under 35 expressed high expectations that their Fine Wine preferences would come with social networks, and they actively follow producers on social media. In China, consumers under 35 are more likely to join wine clubs. It seems that wineries and merchants looking to connect with Fine Wine buyers should consider how they can create meaningful real-world interactions for their customers – and make it a priority.
Conclusion
International Fine Wine consumers are a heterogenous group, who have different desires and values depending on their country of origin. What they all have in common, however, is that they take Fine Wine seriously. Almost all of the consumers surveyed expressed the belief that Fine Wine was a drink to be consumed at special occasions, or to build business relationships. It is a product that they treat with great respect, regardless of whether they want to drink it with friends, pour it for business associates, or cellar it for later.
What should wine merchants take away from this?
That their best customers are constantly on the lookout for the best prices, but that they will remain loyal if they can get access. And that, fortunately, is something that the Fine Wine trade excels at.
ARENI recently released its latest report: The Future of Fine Wine Consumers and presented some of its main findings on April 27th 2021. See the video below for a snapshot of this extensive research on today’s Fine Wine consumers and the complex forces at play that will define the buying behaviours of tomorrow.
To access the full report: Become a member today.