Reshaping the lingo of vino: Penfolds GM on modernising wine retail to drive premium sales – Exclusive interview

By Pearly Neo contact

- Last updated on GMT

Australian wine giant  Penfolds has highlighted the importance of modernising retail concepts. ©Penfolds
Australian wine giant Penfolds has highlighted the importance of modernising retail concepts. ©Penfolds

Related tags: Penfolds, Wine, retail technology

The international GM of Australian wine giant Penfolds has highlighted the importance of modernising retail concepts to shift consumer purchase habits from price to premiumisation, in an exclusive interview.

Amidst the COVID-19 pandemic, the alcohol industry has been one of the hardest-hit with on-trade sales particularly heavily impacted as a result of lockdown restrictions, which has made off-trade retail sales all the more important for alcohol firms.

Wine brands such as Penfolds in particular have needed to pay extra attention to upgrading their retail concepts and strategies, as the traditional method of promoting wines has always been to offer samples and tastings, a tactic which has become less plausible due to mask-wearing regulations.

As such, the firm has had to work hard to innovate its methods of marketing and selling wine to consumers, with increasing visibility in stores as a key focus.

“We did a brand study last year to better understand how consumers become aware of brands and make their retail purchases, and the results of this confirmed for us that retail visibility is very key in driving awareness,”​ Yodissen Mootoosamy, General Manager, Penfolds International (South East Asia, Japan, Korea, Europe & MEA) told FoodNavigator-Asia​.

“In countries like Malaysia, Thailand, Singapore and Indonesia, this came across as the number one source of brand awareness in the market, in addition to the need for providing more category knowledge on wines for consumers.

“So we worked on this from a few fronts, including integrating high-tech sensory upgrades to our displays to give consumers a ‘phygital’ experience when shopping for their wines, to establishing eye-catching pop-up stores, to making sure that the shelf displays are also able to drive category knowledge on the wines via digital methods so they know what they are looking at and looking to purchase.”

Providing consumers with this education is especially important when it comes to getting them to make purchase decisions that are less price-based, such that they will gain interest in more premium products and likely broaden their scope to more innovative wines variants.

“There is a lot of value to be unlocked by driving category knowledge – when a consumer has certain knowledge of a wine, they will be more willing to look beyond the price tag and focus more on the variety of products available and the different values these can offer, [such as more premium] variants that could offer higher quality,”​ he added.

“Basically, the consumers need help at the point of purchase because [the traditional way of displaying] wines in a supermarket or bottle shop is that there’s a whole enormous array of wines laid out on the shelves, and they can become quite intimidated.

“[When this happens], without knowledge of the products what they are likely to do is maybe not choose the cheapest but something a little higher than the cheapest, because I don’t really know what I’m picking – and this can really be a barrier for consumers to explore the category and find out more about premium wines, especially in Asia.

“So what we’re looking to do here with our new modernised retail concepts is to reshape and change the language of wine, make it less intimidating for consumers so that they now have more confidence in buying these wines, and instead of browsing and looking for tasting notes that can now just at one glance get all the information they need via a very immersive experience.”

From Asia to Europe

Penfolds first launched its ‘phygital’ retail concept in Singapore, and following the success of that strategy, is now looking to expand this to Europe.

“The feedback we’ve been getting from consumers is that they’re flooded with a lot of competing information while shopping, but the new retail concept has helped to give them instant access to what they are looking for and help them with that decision-making process,”​ said Mootoosamy.

“So the phygital concept has been really well-received in Singapore, and now we’re actually expanding that, first starting with Asia and then we’re probably going to bring it to Europe as well.”

When asked if Penfolds’ concepts have potential to be expanded to other alcohol categories beyond wine as well, he added that technology is ‘definitely the future’​.

“I don’t have enough insights on other alcoholic beverage categories like beers to say whether this would work for them, but it’s definitely been very beneficial and positive for us [and] technology is definitely the future,”​ he said.

“Now especially that the pandemic has changed shopper behaviour and marketing, everyone needs to adapt to meet both the online and offline needs of consumers, so there needs to be tools such as these new concepts that can bridge the digital and physical experience for them, so that they get some real engagement with the brand and can make the best choices.

“That said, for me I do see that a hybrid situation being the way forward, as although technology is definitely key to unlocking more opportunities in the future, when it is allowed again I am sure people will want to have a bit of tasting and sampling again so they know exactly what they are getting. We are of course trying to use features to create that environment of tasting, but having the actual tasting will also help so definitely a hybrid model would be my choice.”

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