From Dollar Shave Club selling shaving packages to Blue Apron curating ingredients that are ready to be made into a meal upon delivery, the popularity of subscription-based box services is exploding. In fact, visits to subscription service box websites increased 3,000% from 722,000 in January 2013 to 21.4 million in January 2016. These boxes contain anything from pet toys to women’s beauty products, but one the fastest growing subscription box business models is based on possibly the oldest man-made drink: wine!
Have you ever walked into a supermarket and looked at the wine aisle? Chardonnay. Malbec. Blends. Sauvignon Blanc. Red. White. Cheap. Expensive. The variety is overwhelming and often overly complicated. This overwhelmed feeling is called the choice paradox. It’s the idea that an excess of choice, normally considered a positive thing, actually causes anxiety and decision paralysis when trying to make a purchase. The wine aisle certainly can cause anxiety for a wine neophyte, with trial and error being the only way you can find the perfect fit for your taste.
This is where solutions like wine subscriptions come in. Instead of stressing out in the supermarket, these innovative subscription services help you alleviate tension through technology and personalization.
Let’s delve into how these businesses are taking advantage of the changing times and getting you to buy more wine thanks to their innovations and marketing.
So What’s the Big Deal With Wine Subscriptions?
Subscription wine services have been around dating back to the 70’s, but only recently have they become part of the cultural zeitgeist. Changes in state wine shipping regulations in the past 25 years, along with the advent of online shopping, have created a huge opportunity for wine makers to sell their products directly to consumers via subscriptions.
The wine subscription business success is multifaceted. These clubs alleviate the burden of choice, they provide an automatic and convenient service compared to going to the store, they leverage technology in the digital age to connect with consumers like never before, and they often save you money.
Probably the main reason, however, is that subscriptions get consumers to look at existing products in an innovative way and become excited about them. There’s an element of discoverability that makes opening your monthly package of wine novel and exciting.
The economy has changed and consumer habits have, too. As is usually the case, according to most news outlets, millennials are to blame for these changes. Millennials may be killing industry after industry, but apparently they have saved all of their money for purchasing wine. In a recent study by the industry nonprofit Wine Market Council, millennials drank nearly 42% of all wine in the U.S. in 2015 (which is more than any other generation).
Millennials not only drink more wine, they purchase wine differently too. On-demand wine delivery subscription models and check-in apps have both risen from the change in this generation’s purchasing habits. In general, people now expect to get everything they want delivered to their home.
Overall, there are 4 underlying trends that are driving this change during the age of the internet:
- Consumer preference for personalized shopping experiences
- The growth of consumers’ desire to “assess rather than possess”
- The ever-increasing pace of the economy and decreasing time for shopping
- Retailers trying to differentiate by increasing customer loyalty and driving down overhead costs
In essence, these trends all point to an increase in direct relationships with the consumer in general. This also means getting more fine-tuned data with which wine subscription services can leverage to create a more intimate customer experience (as well as more wine sales).
One business that has curated an intimate customer experience is Vinome. Vinome’s draw is that the customer submits their DNA for testing and then receives a genetic profile that demonstrates what types of wine they might like. The customer can then purchase the suggested wines from Vinome’s site. Since the customer has already purchased the genetic testing, they are much more liable to succumb to the sunk-cost fallacy—they will end up purchasing the wine since they’ve already invested time in the genetic component of the business.
Winc is another example of a subscription wine service that creates an intimate customer experience by making wine more accessible. Control is the name of the game. Winc asks you an array of questions including “How do you feel about salt,” “How do you feel about citrus,” and “How adventurous do you feel?” The service then matches you with specific wines and gives you the option to select four bottles from hundreds of types of wines. Most bottles cost only $13, and the entire package is shipped monthly with an option to skip months if you are low on money and need to pay the rent instead.
These approaches are genius when it comes to creating a return customer purchasing habit. They fully immerse the consumer in an active experience, making the whole purchasing experience more personal. With extra incentives thrown in such as shipping deals and automatic wine curation based on your preferences, many of these companies entice you to continue your wine journey with them instead of your local supermarket.
Marketing to Specific Demographics
Moms and yoga. Moms and festivals. Moms and book clubs. Aside from the “mom” theme, wine is usually the common denominator that ties all of these events together. “Wine mom” culture is an emerging phenomenon that evolved from the general acceptance of wine consumption by mothers in order to deal with the stresses of parenting.
Since the 90’s, alcohol marketing has been directed towards these wine moms (and women in general) with “alcopop” drinks such as Mike’s Hard Lemonade and Smirnoff Ice. Wine brands like “Girls Night Out,” “Mommy Juice Wine,” and “Skinnygirl” are relatable for most moms. It’s no surprise, then, that the primary demographic ordering subscription wine services is female with children ages 3 to 5.
Many companies sponsor events like the “Mommy Wine Drinking Festival” in order to create communities surrounding the mom lifestyle. These types of events promote the sale of wine in general because they create a strong branding community. The moms attend events like this festival, yoga, or book clubs because they identify with other moms, share the same values, and create a community based after wine services like subscriptions or wine clubs.
These consistent brand communities are what drive many of these subscription wine services and ultimately contribute to the huge boon in subscription services across the retail industry.