Wine Industry Digital Leader Paul Mabray Pulls No Punches


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In the words of Paul Mabray, Chief Strategy Officer, VinTank, “ Winter is coming for wineries.

It’s a dire and controversial view, but what makes Mabray’s prediction worth a listen is his pedigree: after working at wineshopper.com, forerunner to wine.com, he founded the first successful e-commerce company, Inertia Beverage Group, to introduce wine producers to their consumers through innovative—and completely new—digital programs for marketing and sales, including accessible digital means for complying with government controls for Direct-to-Consumer wine commerce. 

Today, Mabray believes the wine industry is at the perfect intersection of domestic and international competition. He points to looming threats like lacks in market access, changing consumer behaviors and emerging competitors that include large major chain retailers and subscription based companies. Without a major investment in digital and cultural adaptation, Mabray sees “…a culling of wineries or, at a minimum, a continued consolidation at the producer tier.”

Broadly speaking, he says, “The majority of wine marketing in the U.S. is really ‘channel marketing,’ meaning that our marketers build marketing programs meant to support wholesalers and retailers (often referred to as push marketing). This includes promotions, in-store collateral and packaging…This is most likely a result of the three tier system and antiquated laws that retarded the use of traditional media channels.”

Don’t get him wrong, however. Mabray believes traditional marketing “…definitely has a place in the world and there are years of science, psychology, and evidence on how it works,” yet, “…it is grossly inefficient and very one dimensional.”

The greatest transformation happening in (and out) of the wine industry is digital. The ability to cost efficiently, measurably, and quickly, reach a global or highly targeted audience anytime/anywhere is unprecedented in human history. It is also changing so fast it is hard to adapt. What worked on social media a year ago has almost no relevance to today or to tomorrow.

When new channels emerge, however, like the internet or social media, laws written after Repeal of Prohibition do not apply to the new digital channels, and that has left the overall wine industry unable to focus on pull marketing directed at generating consumer demand, the kind of marketing suitable online, on social media.

Much is made regarding which consumer age group buys into which brands or fads. Mabray allows that the wine industry needs “…a continued adoption of wine by new generations to be sustainable.” But he also says, “…we need to look at all consumers in segments and see where we need to engage and inspire them into the wine behaviors that match their interest level and their disposable income. He talked about this subject in an essay.  

Mabray admits to having once thought wine buying online would become dominant. He doesn’t see it exactly that way anymore, saying, “I’ve dissected this problem ad nauseam. It’s not one single thing but the combination of an industry steeped in tradition, a product that is constrained by regulations, the inability to catch a success and grow it, shipping cost, the size of the country, but also the economics of powering the long tail of wine without the ability to have ‘virtual inventory.’” But, he says the biggest problem is, “… the majority of businesses have leaders who superimpose their perspective about wine on top of the consumers . No one has really tried to map the consumer need.”

As the CEO of a consumer insights company Mabray  gets to see behind the curtain, so to speak. With a few exceptions (Nielsen Data, Silicon Valley Bank) he believes present data gathering “…is mostly garbage. Finding those big data sources is challenging. In fact, one of the most difficult jobs I have as the leader of this company is finding meaningful pockets of data to add them to our ‘data lake.’…very few sources have enough data or if they do, are unwilling to share it…lots of small pockets of data need to be aggregated and then segmented so that the results give accurate guidance to the industry.”

Assuming online wine shopping will continue to grow, Mabray implores wine marketers to “be focused on digital—especially mobile—since that is the cultural and operational epicenter of first world countries.” According to him, online wine shopping has an effect on what happens in restaurants and bars, too. As an example he cites the use of iPhones to scan restaurant menus to decide on what to buy. “We see it in the data of Vivino, Delectable and Wine-searcher… it’s evident the wave is coming and it lives in our most personal and portable device: our smart phone.”

About the U.S. wine industry and its relationship to digital utility, Mabray believes it is “incredibly nascent.” For brands adopting digital, he sees large steps toward success through understanding past failures and/or data.

With all that, Mabray also believes that in the future “wine will be bought online…on the phone…by voice.” Its online future is near, and Amazon (Whole Foods) is likely to take the lead. 

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