By Barbara Barrielle
This article is part of the Bold Predictions series.
“Within five years you will see entire brands created through pre-production personalization by flavor and shopper profiling at an individual level – blends crafted ‘instantly’ through data on the consumer’s taste and purchase preferences, and genetic/behavioral/social characteristics, driven by data that may have nothing to do with wine or the production process,” says Mike Provance, PhD and CEO of 3×3.
Examples of individualization already exists in the wine business with wine-of-the-month clubs tailored to the palates of the individual consumer based on expressed desires and reviews, and devices enabling wines to be enjoyed one glass at a time. Furthermore, Provance points out that branding and packaging are already informed through shopper-driven voting, focus groups, and feedback, while wine blends go through pilot tests to refine the composition in a way that maximizes sell-through.
“These can all be thought of as post-production personalization. The grapes are harvested, and blends produced before the testing of the final product produces revisions and evolutions,” explains Provance. “But these approaches require iteration. The obvious next step is full personalization – from the grape selection up to packaging and purchase.”
Currently, packaging is where trends in personalization are happening like the options offered by Alacran Tequila with custom etching as well as packaging that interacts with the consumers like augmented reality, QR codes, and near field communication chips loaded with product information and verification of authenticity.
Provance believes that Amazon will be the company that drives personalization, and the retail giant with its massive amounts of consumer data can become a threat to small brands. Amazon looks for the competitive edge and helps everyone else sell until they figure out what works, and then they make their own products under the Amazon name. It may be ten to fifteen years out, but 3×3 plans on working with brands and retailers to have the tools to fight back.
3×3 has built the only end-to-end marketing channel using data from over 1200 different independent liquor stores. And, while gathering data has been crucial in recent years in determining consumer behavior, Provance points out that manufacturers have too much data; it has become overwhelming, so 3×3 provides a solution in analyzing data by developing marketing programs and working on measuring consumer conversion and sales.
The simple but powerful model works on six fundamental data measurements:
- Tracking brand performance in near real-time
- Basket analysis of what consumers tend to buy together
- Early trend detection
- What, when, where and how consumers are making purchases
- Evaluation of product performance in specific markets
- Separating noise and hype from reality in product development
“The power that personal data brings to the wine business—or, that matter, beer or spirits, too—is the ability to tailor the product from the outset.” says Provance. “This has reared its head previously at the do-it-yourself level with home brewing and winemaking, but in a way that referenced the early days of car-building; you can have any color as long as it’s black. These methods depended on consumers choosing from a predetermined short list of wine and beer production options.
“What is coming is the application of what industrial manufacturers in the 1980s referred to as mass customization or the ability to put data to work to deliver individually-designed products through scalable production processes. Production runs were shorter, but the results were more fine-tuned to the vagaries of customer preference.”
We see this in the wine industry now with small batch winemaking, single barrel production, and customer blending; spirits are being developed based on consumer preferences with flavors, smoke, and herbs. The alcohol industries are doing things that change the product they produce, and that is the sign of early personalization.
“Imagine shopping for a wine by sharing saliva, contributing purchase history, and sharing the sentiment of your social media threads. That’s the next generation of beer, wine, and spirits manufacturing” declares Provance.
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