Hello and welcome to National Pricing Purgatory.
A word to the price-sensitive retailer – the below ain’t pretty…but there is an upside, I promise. Within this oversized problem is a kernel of clarity.
Will the pricing of a wine state to state get more varied and complex before it gets better? Absolutely on all counts — and mostly because there is a large amount of confusion.
But I need to clear up a few things first.
The Pricing Email
I am getting emails about pricing in NY and also in other states (this is not new) and they are becoming more and more frequent (very new). They go a little like this:
We are very concerned about the Black Friday sale of the “insert Brand here” at this competing retailer in “insert state here.” The price they are selling is well below our price. Please let us know what you are going to do about this before we re-order.
your friendly Retailer
Most recently this email came from a prominent wine retailer on the national stage and was prompted from a forwarded email from a customer. First, let me say this: I get it. This is beyond annoying. Johnny Two-Click that works in Tech on the West Coast trolling wine-searcher for the best pricing is a tough one. He has been buying some wine from you recently and he emailed you angry and annoyed – he may have even threatened to take his biz elsewhere. I completely understand that you feel compelled to take action.
Further, I can’t think of a worse thing than skimming over the pricing in Wine-Searcher all day. That would be up there as my worst wine nightmare.
Fact: Unless a retailer is taking the full quantity of a particular wine for the whole country, there will with rare exception always be a lower price someplace nationally. And, if you add in the random little Direct To Consumer email list operations to this, the pricing situation gets even dicier.
Wine-Searcher is a wonderful tool, but imperfect to say the least.
Human error, virtual inventory* and one-day sales really put a spotlight on the issues of wine-searcher. I take wine-searcher seriously at times, but it is notoriously misleading.
The ‘click it to wine it’ game in wine is a toughie. The real price hunters don’t care about you. They could give a shit about the source or character of the retailer.
Are you offering something besides wine? Is this all just a widget? If so, prepare to race to the bottom, or constantly search for exclusives. which will also end at the worst times. And it won’t be pretty. Price always wins.
Now, there are some shady characters on ‘searcher who use it as if it were a game. They bottom out the price to get phone calls and emails. To them, I say: good luck. These wack jobs will have moments, but I would never bet on them.
That DTC Bullshizz
Is the Direct to consumer email list worth worrying about? As of today, I have never received a viable complaint about a Direct To Consumer email blast.
These lists are blasted out and often claim to have the wine at the best price in the nation, but
#1: they rarely have the wine in any quantity
#2: rarely offer consistently good service to the people buying and
#3. the source of the wine is questionable…
Further, when they are actually a viable DTC, the prices never hit Wine-Searcher.
Most recently, a very important retailer emailed me about a DTC offer and I checked into the wines they were referencing. The total inventory on this Direct to Consumer list offer was one bottle on one SKU and 3 bottles on the other. That was the actual total. I am not kidding.
Considering I was offering a quantity to the sensitive retailer of the same wine that dwarfed those numbers, I must ask: is this really worth worrying about?
The Distributor Matters
In nearly every case when I am contacted regarding a price in another state, the importer/distributor I work for doesn’t distribute the producer’s wine in that state.
Does the distributor matter? Big time. Maybe the California (for instance) distributor needs cash or is going out of business. Or maybe they just suck and sell to anyone. Is it possible they sold the product to a terrible retailer that is closing who had to close the wine out at a major discount? The bottom out of pricing may even be a local competition move.
As you can see, the possibilities are more numerous than you can imagine.
If you are a retailer having problems with a price on searcher that is consistently driving a large number of your loyal customers mad, then you may have to do the noble thing and cut the wine. Get rid of it. If it is that much of a headache, why waste the time?
“ Johnny Two-Click that works in Tech on the West Coast trolling wine-searcher for the best pricing is a tough one.
I know of a gigantic, very successful store that sells not just one but many wines 10%+ higher than everyone else on wine-searcher. You read that right…HIGHER.
We are talking one of the big players that everyone would know – AND the sales volumes of the wines in question are staggering.
How are they doing it? Customer loyalty and attention retention.
They invest big in knowing and connecting with their audience. They market clearly. They know that people like this buy wines from us. This is the opportunity. If you truly know your customers, you can keep them rolling.
I love retail. I love the pace of it, the people. A buzzy, energized retailer is in many ways the inverse of the high-charged, raucous restaurant. They are different genres and I find the dynamic of selling to both endlessly fascinating.
But I can say this with confidence: if price is what you are selling, you are building limited to zero loyalty from your customers. The customers you are chasing think of you as a commodity trader. And with where the world of business is going, they will leave you tomorrow if they find something better.