Over the last few years, supermarkets have registered an increase in the quantity and quality of wines on sale.
Even discount stores (such as Lidl in Germany, to give an example) have created sections dedicated to medium-to-high quality wines, with a catchy design for added value and a selection recommended by world renowned sommeliers.
The reason is simple: in large scale distribution, margins are reduced to a minimum, so retailers are always on the lookout for product groups which can offer higher margins, both in absolute and percentage terms.
The wine sector fits the bill, but it must be said that even this industry is not the fertile ground it once was.
Just take a look at the numbers of the main wine importers (updated in 2013):
Germany: 1,528.91 million Euros in turnover on still and bottled wines which equates to 579.5 million litres.
That means 2.64 Euros per litre!
The situation is slightly better in the UK and US where the average price per litre is respectively 2.95 GBP and 5.71 USD.
Considering these are the average values of all still wines – including those sold in wine shops and in the HORECA sector – it is clear that attempting to increase turnover and profit margins in the large scale distribution sector is not an easy feat.
How can an appealing and dynamic presentation improve the profitability of the wine section at the supermarket?
Firstly, it is important to understand the behaviour of the average wine purchaser at the supermarket.
A recent study showed that women are responsible for the purchase of wine for daily consumption, while men tend to buy bottles for “special occasions”.
Impulse purchasing could already receive a significant boost by adopting a dynamic kind of communication that adapts to the different times of the day and days of the week: on Monday mornings, you are more likely to sell table wine to a housewife or pensioner; at weekends and before a holiday, purchasers are more likely to drink a more expensive wine, better suited to the dinner party, birthday or family celebration taking place.
Messages can also be personalised by matching weather data (including the weather forecast) with the type of wine being advertised: on a warm summer’s day, a fresh Chardonnay is definitely more appealing than an Amarone della Valpolicella.
But the advantages of displaying dynamic Digital Signage solutions at sales points don’t end here: while promotions via traditional means (cardboard displays and information brochures) are, by nature, fixed and unchangeable solutions for the entire duration of the promotional campaign (which can entail significant expenses both in terms of material and logistics), a campaign managed on-line in a centralised way can adapt to all kinds of circumstances: if a product is out of stock, you can suggest another; if there are special events (like bank holidays or sports events), you can organise specific campaigns which target the imagination and captivate the attention of the audience.
A recent example: any marketing agency could have created entertaining campaigns connected to the World Cup, organising promotions linked to the match of the day!
The opportunities are endless and the only limit is one’s imagination!
But let’s leave aside the many obvious advantages of an interactive and dynamic promotion solution for just one second.
Let’s focus solely on the typical behaviour of a purchaser at any given supermarket.
A famous study conducted by Professors Lyengar and Pepper known as the “jam dilemma“, has produced some extremely interesting considerations for large scale distribution operators.
Different display units were created for jams: one shelf had 6 different options; the other had 24.
The first shelf was checked out by 40% of the customers; the second by 60%.
The first thing that was noted was that the display with four times as many jams resulted in a 50% increase in appeal.
But the real surprise came when analysing the sales data: in the first case (the shelf with six options), 30% of the clients purchased jam; in the second case, purchasing crashed to 3%!
If we compare this data to a typical wine display at the supermarket, we realise that the potential client is completely overwhelmed by the thousands of bottles on offer.
If we take away the sommeliers and real wine connoisseurs who generally purchase at wine shops anyway, it is logical to assume that the average consumer makes a choice based on the following criteria: type of wine (e.g. red or white), price range, label.
Of course, expert advice or a credible recommendation can also influence the purchase of one type of wine rather than another (as often happens in wineshops).
In the example in the video, we have produced a realistic situation of a consumer checking a wine label against a consumer checking Digital Signage.
All things being equal, which presentation inspires you more?