There's a better way than discounting
Discounting is routinely cited as the scourge of wine retail in the UK.
Certain types are thought justified – genuine bin-ending to clear stock, or 10% off a case, for instance. But deeper discounting – generally one-third or one-half off an ostensible list price – is controversial.
The major argument in defence of slashing prices in this way is well worn: that customers like it. However, I’m not so sure if this has been proved. It’s believable that people like the feeling of getting a good deal – but where is the research showing that wine buyers really have faith in these wine aisle “bargains”? If discounting were to be embargoed, replaced instead with flat, genuine pricing, would wine sales stall?
Scottish wine trends can inform us on this matter. Since multibuy discounting was banned there in 2011, impact on wine sales has been minimal at best. Last year, an NHS survey found that wine sales in Scotland had reduced by 4% since the ban, while the academic journal Addiction published a report finding no impact on wine sales at all. Hardly seismic.
It seems unlikely that the rest of the UK will imminently follow suit, which means that discounts remain inevitable in the meantime. Several factors cause this: the buying clout of supermarkets; the need for large producers to sell excess volume; and that enduring conjecture that customers demand them.
What is so bad about deep discounting? Firstly, it distorts the true value of wine. This makes a complicated category even more confusing and even less trustworthy. It also overrides brand loyalty. That’s bad for individual producers because it gives them the incentive to prioritise price over quality.
And it’s bad for the industry as a whole, because it relies on consumer ignorance to sustain sales – where lack of understanding makes price the main buying cue.
That seems dangerously short-sighted when you consider how much the wine industry has changed in the past 50 years. However, no amount of speculation will change the present reality. So here are some more practical alternatives to discounting, where off-licences can offer more tangible value to customers.
■ Loyalty cards: Just as for cafés and hairdressers, rewarding repeat visitors is known to build relationships and encourage loyalty. Stamping a card for every bottle bought and offering, say, £5 off the 10th one echoes the principle of case discounting without necessitating bulk purchases.
■ Personalisation: Recommendations from store staff that tell engaging stories about wine will provide greater satisfaction and a more memorable experience than your customers could get from phoney discounts.
■ Trading up: Yes, the opposite of discounting. Highlighting three price levels – for example a “good, better and best” trio of Chardonnays – brilliantly illustrates comparative value, and shows how informed choices can offer genuinely savvy buys.
■ Tasting: the silver bullet of wine retail. Offering customers the chance to try wine is a huge advantage over supermarkets, because it allows customers to have that rarest of commodities when it comes to wine: certainty.