Note: Part 1 explained just how competitive the US wine industry is and the reasons behind choosing online wine sales by Millennials as the research focus for this study in the Millennials, Mindsets & Money initiative that Howard Moskowitz and I lead.
If you would like a copy of the full report as an e-book please email me: steve at sdrconsultlingllc.com. The report is complimentary.
This post summarizes the five most important research findings from our study. But first, some words about our research aims.
The 3 Aims of Our Research
Moskowitz and I set out to discover 3 things that will help wineries create productive marketing strategies that increase their online wine sales. We used our research methods of Mind Genomics and Cognitive Economics and, in a first, combined them with the emotional research technique called MindSight developed by applied neuroscientist Dr. David Forbes. (Discussion of these is beyond the scope of this post, but will be detailed in the e-book we’re preparing on this study).
Identify and define mindsets people hold towards buying wine online from wineries. Mindsets are collections of ideas people have towards some “thing,” such as coffee, season tickets for sports teams, or hotel check-in. Ideas within mindsets can raise their interest in that thing, lower their interest in it, or have little impact. Mindsets are unique segments.
Specify the marketing messages that most strongly interest a person in buying wine online from a winery. People respond to marketing messages differently. One person can be turned on by an idea or message, another appalled by the same idea or message. We studied 36 messages about online wine buying from wineries to find those with the most “pulling power.”. Those messages included the stories that wineries tell about themselves and their business practices; the online and mobile wine-buying experience; buzz, reviews, ratings; shipping, rewards, discounts, and the motivations for buying wine online from a winery.
Identify the emotional satisfactions online wine buyers seek from a purchase. All product buying involves an emotional component, which is often subconscious.
Achieving these goals enabled us to uncover the “why” underlying online wine buying, not simply the “what” that so many studies report.
The Five Key Findings
1. Millennials are interested in buying wine directly from wineries.
About 50% of Millennials in our study would make a purchase within the next six months. There was no difference in intent between Younger Millennials (21-26) and Older Millennials (27-34)
2. There is no single type of Millennial online wine buyer. Millennials fall into one of three unique mindset segments towards buying wine online from a winery.
I’ll briefly describe each segment and recommend a messaging strategy based on the marketing messages that substantially raise interest in buying wine online.
Segment 1: Discerning, Buys into the Winery and Wine (15% of Millennials)
People in this segment are interested in buying high quality wine from a winery with a great story.
Messaging Strategy: Appeal to their interest in distinctive, artisanal, handcrafted wines. Lower their purchase risk by giving them confidence in the wine they are buying—provide detailed descriptions and tasting notes, and highlight those bottles that earned high community ratings. It’s not the wine alone. Wineries should emphasize their compelling back stories and show how they conduct operations with uncompromising integrity. Downplay rewards and discounts as these do not drive Segment 1 people’s interest in buying wine online.
This group will pay the most for a bottle.
Segment 2: Quality Wine at a Great Price (20% of Millennials in sample)
This group is most interested in a fantastic deal, even a steal, on a great wine.
Messaging Strategy: In contrast to Segment 1, tout discounted or free shipping, quantity discount availability, and specials and promotions. Like Segment 1 they want quality wine from right-minded wineries. But these are table stakes for them. For Segment 2, the deal matters most.
This group will pay less than Segment 1 for a bottle.
Segment 3: On the Cusp (65% of Millennials in sample)
This, the largest group, is uncertain about buying wine online from a winery.
Messaging Strategy: None of the ideas crossed our threshold for high “pulling power.” Several ideas bubbled below the threshold that may be worthwhile to employ as background assurances. These concerned pricing, reducing purchase risk, and enjoying their wine with friends and family.
This group will pay the least for a bottle.
3. Each segment reflects a different potential for sales.
Marketing effectively to each segment means that wineries should have a way of identifying visitors and assigning them to a segment, target them, and then tailor visitors’ onsite experience with the marketing messages that work best for their segment. We developed an app that assigns people to a segment—it takes under a minute, so that wineries can know which visitors belong to each segment nearly instantaneously. The app can be incorporated into a web or mobile page, email form, etc. so that it is easily and seamlessly accessible to visitors. You can try the app out here.
Segment 1 and Segment 2 represent near-term opportunity—they account for 35% of Millennials, and should be the most productive for wineries selling wine online. Segment 3, although larger, appears to offer less potential today and would most likely be considered a secondary target for most wineries selling online.
Wineries marketing online to Millennials should create unique strategies for each mindset segment that are developed in line with their winery’s business goals, business model, values, practices, offerings, services, and experiences.
4. Millennials seek specific emotional satisfactions from online wine buying. These are the same no matter which mindset segment a Millennial belongs to.
For many people online wine buying is an emotionally risky business. That risk can be a turnoff if not addressed, leading to abandoned shopping carts and lost sales. Combined with the mindset messaging strategies wineries create, including ways to satisfy the emotions that come into play can help visitors overcome resistance to buying and feel great about their purchases.
In all mindset segments, online wine buyers do not want to feel insecure—they want to feel that they are buying the right wine and have a sense of accomplishment about it. They do not want to feel disempowered—they want to feel that that they are getting what they want. Nor do they want to feel disengaged – they want to look forward to drinking what they’re buying and to feel that they will enjoy it with others.
5. Millennials are not unique. The mindset segments apply to all generations.
We also studied Boomers and Xers in equal numbers to Millennials so that we could compare and contrast them with Millennials. The older generations fell into the mindset segments in nearly the same percentages as Millennials. Emotional satisfactions showed the same patterns. In addition we didn’t see any meaningful demographic or attitudinal differences that explained the mindsets. It’s the ideas that define the mindsets.
The upshot is that marketing strategies based on the segments and emotions can be consistent across generations so that wineries can create a “total market” strategy if they desire. Doing so has advantages for brand growth. However specifics like imagery, sounds and language should be tailored to each generation to ensure that the messages are seen as relevant.
In talking with various wineries about our results, I learned that numbers of wineries have some of the ideas about segments and use some of the marketing messages. Our findings provide a framework that sharpens and organizes a winery’s understanding of their customers’ thoughts and emotions so that they are better able to offer a compelling site and buying experience for each visitor. And it’s not ivory tower. Wineries selling wine online can act on our findings and recommendations right now. Those that do should also think about how to express the messages and emotional assurances in images and sounds to engage more of the senses.