We were discussing online opportunities. I am and have always been very optimistic about opportunities online and have worked hard with my brands to ensure ultimate online exposure. And although I know that there are some risks and challenges to all types of business, chatting to these gentleman, I realised that there is a risk to online trading that I have not yet considered.
It is one that we are quite familiar with, one that is also a challenge in traditional retail and it is one that is difficult to explain and even more difficult to manage. The own-label.
Let’s have a look at how this risk plays out in traditional retail. Supermarkets own-labels have come a long way. Some great quality products are nowadays available under own-labels and consumers who are more penny-wise often opt for own-label products.
The reason for the success of own-labels lies in the combination of economic difficulties, an increase in the quality of such products and also the research and experience supermarkets have in product requirements and customer expectations. If there is anyone who should be able to successfully place a supermarket product, it must be the supermarket!
But although the local grocer knows the buying patterns of their grocery customers, they do not know what type of shoes or clothing or beauty products or entertainment their customers prefer, do they? That is one of the opportunities and also the dangers of online shopping.
Shopping behaviour leaves its tracks online. While doing online grocery shopping, the pair of expensive boots you looked at a day or two ago at a totally different online shop, pops up to tempt you again. While browsing for a birthday gift for a loved one, suddenly the bicycle fitting the specs you have been googling, slowly slides by at the bottom of the screen…
This is great for anyone wanting to sell something. Including us as wine producers. I don’t know as much about the technology behind online sales, but I know that it is possible to advertise your product to online shoppers who fit a certain profile. And this profile is built by analysing people’s online behaviour. What movies they like, what type of entertainment they enjoy, where they make dinner reservations, where they shop and of course in our case, which wines they buy.
The challenge is however that if so much information is available for you to market your product more successfully, is it not also available for people to copy your product? If you are lucky enough to have a successful brand with a strong online presence, is there not the opportunity for someone to use the detailed information available online to duplicate the style and quality of the product and market it to exactly the right crowd?
Almost something like an online own-label, but just a bit more powerful than the ones we find in traditional retail.