BIRMINGHAM, Ala. -- Western Supermarkets has built a successful wine operation on one-to-one service. Now, it's about to build on that personalization with a targeted e-mail marketing strategy that recognizes the wide variety of its wine customers.
By late February, Western plans to start sending a new monthly wine e-newsletter to about 2,000 of its shoppers who want to receive it. Customers will get one of about a dozen versions of the newsletter -- tailored to the recipient based on answers they provided to the chain about their wine knowledge and interests.
Novice wine drinkers will get offerings for store events like a beginning wine class or inexpensive wine dinner, and wines with more residual sugar that are easier to drink, for instance, explained Darwin Metcalf, Western's executive vice president.
"If one is interested in beginning wine classes, there's no point in sending them a Bordeaux futures," he told SN.
For those whose responses indicated a mature palette, Western would recommend drier and limited-release wines. For another group he's identified, the upper-income bargain hunters, Metcalf said that he'd suggest "the $10 to $12 bottle that tastes like a $20 bottle."
Western began taking wine seriously more than a dozen years ago, after Metcalf -- then a manager at a Western store in the Birmingham suburb of Mountain Brook -- discovered that selling wine was "a lot more fun than selling pork and beans." He hired a wine consultant as a result, and today, Western employs three wine consultants at Mountain Brook and one each at another two of its nine stores in the Birmingham metro area, in Rocky Ridge and Cahaba Heights. Western poured its focus into Mountain Brook, however, and for good reason: Its median household income, at around $100,000, is more than double the national average.
"Birmingham is a very progressive wine market for this region of the country," Metcalf said. "The number of 2,000-plus cellars in Birmingham, I think, would amaze most people."
Wine has become a fixture at Mountain Brook, so much that it considers wine shops, not supermarkets, its competition, and people informally refer to "the wine shop at Mountain Brook," Metcalf said. Wine sales represented more than 16% of its volume in 2004, up from 5% in 1992, and grew at double-digit rates in eight of the past 10 years. The other two stores that employ wine consultants also have had double-digit sales growth in recent years.
Weekly tastings, an everyday 10% discount on cases, and cross-merchandising wine throughout these stores have helped make wine a destination department. Yet it's the consultants who manage the departments, and devote their time to intercepting and advising customers who are particularly key to sales growth, Metcalf said.
Western's shoppers, like wine buyers in general, have been expanding their tastes beyond Californian and French to Italian, South African, Spanish and New Zealand wines, to name a few. They're also getting into the boxed wines and screw tops that have gained acceptance with connoisseurs.
However, there's one big trend in wine that Western won't be a part of: selling private-label wine.
Lately, retailers that include Target, Safeway and Dorothy Lane Markets have launched store-brand wines as a way to differentiate themselves or expand their low-end wine market. Private-label wine represented only 1.1% of unit share in 2003, but its unit volume jumped by 152.2% that year, making it the fourth fastest-growing category by that measurement, according to data compiled by the Private Label Manufacturers Association, New York.
Why won't Western get on the private-label wagon? Metcalf said he feels doing so would conflict with his consultants' autonomy.
"We do not dictate any wine for any consultant to sell," he said. "You got a private label, [and] you're making extra [gross profit]. You tell the consultant to push that wine, [and] you compromise their ability to sell what they believe in."
Metcalf conceded that Mountain Brook, where many consider wine cellars a basic amenity, is atypical. Still, he believes his approach to wine can be applied almost anywhere because wine's popularity is rising, helped no doubt by growing awareness of its health benefits. Annual consumption for the category grew nearly 16% from 1998 to 2003, while most other beverage categories saw declines, according to Beverage Marketing, New York. Said Metcalf: "It's what everyone's doing."