There has been much conversation over the last couple of years related to a consumer phenomenon known as â€œtrading up.â€
Trading up is simply the practice of consumer buying where you selectively â€œtrade-upâ€ to purchase better products and trade down to pay for other purchases.
The best example of this in application is the person that drives a BMW to shop at Wal-Mart (and if youâ€™ve been to the new Wal-Mart on 29 in American Canyon, you know what I mean). A premium vehicle is important (trading-up), while, perhaps, buying household cleaning products at the lowest possible price provider is â€œtrading down.â€
The notion behind this is that as consumers, we selectively isolate luxury items for ourselves, even if our income isnâ€™t always in the affluent category.
Wine is very much a part of this â€œnew luxuryâ€ consumer buying activity and you need look no further then the fact that Costco, the largest retailer of wine in the country, is also a retail discounter whose business model is predicated on premium luxury coupled with discounted staples. Think of a $35 bottle of wine and jumbo packs of canned green beans.
Tina Caputo has a nice summary article on this cultural aspect in a recent Wines & Vines article here. Highlighting a panel discussion called â€œTrading Up: The Sustainability of Luxury Brandsâ€ presented at the Wine Industry Financial Symposium on September 17th, Caputo notes one of the tenets of luxury wine marketing: authenticity.
This excerpt from the article explains:
Rather than choosing products for status reasons, â€œnew luxury consumersâ€ focus on pampering themselves with high-end experiences. â€œThere has to be an intangible element of your brandâ€ to connect with this consumer, Bryant said. It must make an emotional connection to the consumer, and have rational support to back it up.
This category of consumers doesnâ€™t shop according to price, and is more likely to spread the world about a brand or experience via the Internetâ€“a characteristic that makes them particularly influential. Consumers in the â€œnew luxuryâ€ category are also enthusiastic wine drinkersâ€“a recent survey showed that 24% of participants consumed 4-9 glasses within the previous week.
â€œNew luxury consumers do a lot of homework before buying,â€ Bryant said. Therefore, your website should enhance the image of your wine.
For obvious reasons, your web site is important as the door to your brand, but a couple of other insights into branding might be valuable as well.
An incredibly insightful book called Brand Hijack offers the following 6 tenets for a â€œshareable brand,â€ one that fits into a â€œnew luxuryâ€ model and one that incents people to make an emotional connection with your wine brand:
1) It appears to be evolving
2) It appears to be honest
3) It appears to be innovative and creative
4) It appears to have a strong moral character
5) It appears to have a strong proactive orientation
6) It appears to be altruistic in nature
I would add a 7th tenet, as well:
7) It appears to be socially and environmentally responsible.
A good example of this in action is the wine brand Cameron Hughes, sold not so coincidentally at Costco.
1) Cameron Hughes Wine number their wine in lotsâ€”each lot grows numerically, so that I can easily follow that I last bought â€œLot 18, and â€œmy gosh they are up to Lot 37 already.â€ The brand definitely evolves.
2) Cameron Hughes Wine is completely transparent about his negociant business model. The brand is definitely honest.
3) Cameron Hughes Wine has built their business off an entirely new business model, starting with a single customer. The brand is definitely innovative and creative.
4) Cameron Hughes Wine doesnâ€™t bottle just anything they run across, they are building a reputation for quality at price point and their repeat customers are bearing out a strong moral character.
5) Cameron Hughes Wine is championing direct sales, good old fashioned hucksterism at Costcoâ€™s, aggressive sampling in the online wine community and aggressive PR. They definitely have a proactive orientation.
6) Cameron Hughes Wineâ€™ position to market is consumer advocacyâ€”helping a customer get a quality, trusted bargain on wine. I would say this is definitely altruistic in nature
7) Cameron Hughes Wine now has an â€œEvergreenâ€ line of wine that has lead them into carbon offsets. They are the first American wine negociant company to be 100 percent carbon neutral. They definitely are socially and environmentally responsible.
So, there you have it. â€œNew luxuryâ€ marketing, â€œshareable brandingâ€ and an example of it in action â€¦ itâ€™s a lot to chew on right at harvest, but the Inertia challenge to you is to use the time you have to brainstorm how you can make your brand a â€œnew luxuryâ€ item while incorporating seven simple steps to a shareable brand. Weâ€™ll be happy to help you implement your ideas, or brainstorm other ideas, after harvest!
By Jeff Lefevere.