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The wine sector today
The wine sector has not yet risen from its lowest point, and is likely to return to pre-Covid levels only in 2021.
Current data - provided by the TradeLab analysis company - predicts a closure of 2020 for wines equal to -28%. This contraction, however significant, is better than one percentage point compared to previous forecasts, but still not sufficient.
The main reasons for this collapse are due to the sharp decrease in consumption outside home, in the HO.RE.CA channel, due to the closure of the spaces and the clear decrease in foreign tourism.
Regarding exports, the first half of 2020 saw a 3.4% decrease in value: the largest percentage collapse was that of the Chinese market (-40%). While large production companies are reacting a little better, small companies, those that put quality and territoriality first, are the most in crisis.
But not everything is lost. Indeed, for many wine producers the coming months will be full of opportunities.
The substantial change in the types of consumption requires a change in the product proposals: in this context, the possibilities for the sector to return stronger than before are considerable.
In this article we will describe the growth opportunities for the wine sector in terms of product positioning, new market opportunities and experiential offerings, with an eye on both the digital world and the indispensable physical experience.
Voice of Customer: listening to improve
The first thing companies should do today to get back on their feet is “try to understand” what is happening to their customers. The months of chaos we have all experienced have undoubtedly changed our habits, thoughts, behaviours and desires.
Companies cannot ignore these changes: it is necessary to understand which direction the public is moving in. This is the right time to stop and start asking yourself questions.
The Voice of Customer can absolutely help: this is the branch for the collection of feedback and desired users (prospects, customers, employees) with the aim of providing a better user experience (UX), but also aimed at collecting information to support marketing and branding strategies.
Thanks to digital technology, market research is now much cheaper and more effective. Through major social networks, email, whatsapp, chatbots, but also Amazon Alexa, you can relate one-to-one with your users. Starting from the data collected, it is possible to discover relevant and potentially disruptive information, especially today.
It is therefore essential for the wine sector to start from listening to what the present has to say to us.
Digital Commerce: selling without the intermediary of third parties
Another factor that can no longer be postponed is the adoption of a digital sales channel. Having a Digital Commerce where you can sell your wine to the general public and professionals has become essential.
This period has allowed millions of Italians to discover the value of Digital Commerce: therefore, it is difficult to go back to pre-pandemic habits. Of course Digital Commerce does not necessarily have to be an exclusive platform for individual producers.
To improve its effectiveness, it would be better to create hubs of more players who together decide to join forces: doing so would reduce costs, increase the visibility of the platform and give more choice to consumers and merchants. An example? A platform that unites all Piedmontese producers of Barolo.
What other benefits does Digital Commerce provide? Obviously it allows wineries to expand their market, differentiate the public and eliminate the expenses of third party operators, whether they are restaurants, wine bars or large retailers.
In addition, being able to create a direct relationship with the public helps to create all those loyalty dynamics so dear to the company's income statements.
From this point of view, it is necessary to devote a specific study to what is called a subscription economy.
Product Subscriptions: Building Lasting Relationships
The subscription economy - which has been booming for some years - is an opportunity which, if well exploited, can be a major economic discriminator. What is it? It is simply the offer of a subscription to the products to the customer, in exchange for a discount. We are well aware that this mode of sale is already widespread within the wine sector. Many families, every year, call the trusted manufacturer to stock bottles.
Digital, however, makes a qualitative leap to this service. In fact, as we have already said, the greater probability to create a loyal relationship with the customer improves the probability that a subscription will take place. Obviously all this applies to both B2B and B2C audiences.
Digital Commerce and Subscription Economy go hand in hand, and in our opinion it is right to implement both once you decide to move a part of the business online.
Gamification: entertaining and engaging the public
Gamification consists of offering to the customers an experience, digital or physical, that aims to involve them through a "game”. Marketers have always known that linking product experience to fun is a winning tool to gain public trust and appreciation. Thanks to digital the possibility of engagement is considerably greater, and allows customers to be reached wherever they are.
Prize games, competitions, badges, trophies and competitions are not to be underestimated if you want to increase your customers and make them loyal to your products. Until a few years ago, only large companies were able to bear the costs for activities of this type: today this is no longer the case.
In addition, the games themselves have also changed, which over the years have become increasingly engaging: if previously we were limited to collecting stickers, today we can create interactive competitions (contests on social media, in-app games, etc.).
Ultimately, playing today has never been so beneficial for companies.
Internationalisation: taking Made in Italy all around the world
Made in Italy has a future only as long as it can attract and involve even the most distant peoples.
To make this, you need to continually renew your offer and distribution channels, to be relevant in the digital age. One of the most complex markets for Italian companies, both culturally and because it is highly digitised, is the Chinese one.
As we pointed out in the introduction to the article, the Chinese market was the one that experienced the steepest collapse due to the pandemic: -40%.
As the first country to suffer from the consumption crisis caused by lockdown, China was also the first nation to emerge from it, and to resume growing and buying as usual: at the moment, foreign alcohol purchasing rates are growing rapidly.
The Chinese market was the fastest growing market in wine consumption worldwide. Although the pleasure of wine is universal, in order to be able to communicate with the Chinese people it is necessary to have a valid cultural knowledge of the country: for this reason it is not advisable to engage in promotional and internationalization activities without relying on external consultancy companies, which are able to support and recommend the best strategies.
Value China, a subsidiary of Neosperience and composed of young Italian-Chinese, has recently implemented a digital promotion program dedicated to Italian wineries.
Winease offers Italian producers the opportunity to learn directly about Chinese consumers, to discover the most effective ways to communicate with them and to use the most suitable tools to promote their uniqueness.
Through partnership with Wechat, China's largest social media platform, Interwine, the largest and oldest professional wine fair in China, and Putaojiu.com, China's leading press release platform in the wine sector, Value China is able to support and guide Italian winegrowers in conquering the market.
Conclusions
Ultimately, the growth possibilities for the sector are considerable and necessarily pass through the implementation of strategies focused on digital channels.
Understanding the public, engaging and retaining customers, eliminating third-party brokerage, joining stronger and more structured hubs, selling online and reaching distant and untapped markets: these are the guidelines for the wine sector that guarantee immediate success against a medium-term investment.
If you have any questions, please contact us and we will be happy to answer your questions.