Wine makes profit – and how! A Case Study

Tuesday 17th, November 2015

wine bottles photoA large 30-year old wine company with an annual sales of $20 million had a brick and mortar store as well as an internet presence but did not have any fancy IT department. It did have a point-of-sale system but it was one that could not provide inventory aging. There was no way they could track the age of the company’s extensive inventory.

And so they installed an analytics solution.

On the very first day the application went live, the wine company discovered that they had 1,000 items of wine that hadn’t moved in over a year. They had a huge sale to clear the stock and made a whopping $400,000 in capital in one weekend. The biggest advantage that the company saw after the analytics platform was installed, was gaining the ability to drill down into the specifics of their inventory. Apart from the real-time view into their inventory, the company was able to go deep into specifics based on department, supplier, margins, price points, age, etc. They could go as far as being able to pinpoint slow-moving bottles on the shelf, so they could promote or discount those and have them sold.

This proved to be a great turning point for them – to get a highly detailed view of the entire company in real time.

  • They were able to reduce their inventory by as much as 40% – as gaining information on what was going on helped them to move quickly when they needed to.
  • The amount of money tied up in inventory was reduced.
  • They now knew who their customers were and where they were coming from.
  • With this valuable information they were able to monitor the effectiveness of their marketing campaigns and improve upon them drastically. Now that they understood their customers, they knew what to offer them. From their data, they found that while people were still buying wine during the economic down turn, they opted for $20 bottles instead of $100 bottles – and the company was able to change the kind of inventory they stocked.

During the holiday season, the company knew that they already had a certain supplier’s stock and pulled back from a planned $30,000 wine purchase. This kind of empowering information was not in their hands earlier. Apart from this, they used the analytics product to clean up their customer database and purge mailing lists, saving as much as $60,000 in printing and postage alone!

The company used analytics to really know and understand who their customers were. They could tell where they came from. Or which parts of the country their business came from and they were able to focus on building their overseas market. They could segment based on existing, current or new customers and analyze retention rates. They had dashboards to alert them if their new customer or retention count was going down.

All this information freed them up to focus on creating a “wow” experience for its customers that would keep them coming back for more. They were able to do this like host special wine-tasting dinners for a well-segmented group of customers, or use buying history to reach out to customers with special offers on their favorite wines before offering them to the general public. It is true that large supermarkets had more sophisticated marketing resources but analytics has helped this wine company get the needed answers and make decisions based on facts rather than gut intuition.

Key results

  • Less money tied up in inventory
  • Knowledge of who one’s best customers were
  • A great idea of how to market to the company’s best customers
  • They could monitor the effectiveness of marketing campaigns.
  • In less than a year, the company recovered the investment made in this analytics platform!

Looking to revolutionize your business? Analytics is the answer. It can transform a business totally – just needs the right tool. The right solution. The right strategy.

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