Guest hosts and a host as the guest in this episode. Byron Hoffman and Tyson Caly, co-CEOs of Offset, a leading e-commerce platform for allocated offerings, interview host Peter Yeung about his new course, Allocated Wine Offerings: Best Practices. They get into the content of the course and also a wide range of topics related to allocated offerings.
Detailed Show Notes:
Co-hosts: Byron Hoffman, Tyson Caly, Co-CEOs of Offset, a wine e-commerce platform and brand studio
Peter’s background: helped managed wineries (Realm Cellars, Kosta Browne, CIRQ Estate) which used Offset’s e-commerce platform, including managing the allocation systems and then consulting for other wineries; McKinsey; co-author of Luxury Wine Marketing, which has high-level strategy around allocations
Allocated Wine Offering course
Are allocations still relevant? Yes, for 1) scarcity or desired perceived scarcity and 2) large number of SKUs (hard to do a wine club)
Allocated Offering definition: allocation (limit to purchase) + offering (distinct time frame to buy)
One of the oldest allocated offerings - Vega Sicilia
Other industries that use allocations: watches, cars, sneakers
Uniqueness of wine allocations: price per bottle relatively low, number of bottles relatively high compared to other luxury goods, regulation of alcohol → has made wine allocation systems more advanced
Timing of offerings clustered at key times (“spring” and “fall”), alternatives tend not to work as well
Best practice examples: timing of offerings, wish setting strategy
Supply-demand balance makes a difference in what strategies to use
Allocation methods:
Most important factor in allocations: creating value in allocations (waitlist, secondary market premium, loss of value if they don’t buy)
Hybrid models: e.g. - Shafer sold high production wines in online store/club, Hillside Select was allocated; adding multiple models increases operational complexity
AI automation for allocations: could do targeted marketing, might be able to create allocations, likely won’t create allocation rules
Setting allocations is quick for first come first serve / group based allocations, more complex individual / guaranteed allocations take longer, but can be accelerated with templates and formulas
Predicting and identifying potential good customers challenging because wine interest is not easy to determine and not correlated with wealth
RFM (recency, frequency, monetary) a way to prioritize customers
Leveraging unique experiences to wine buying and building community can drive performance
Managing waitlists (e.g. - Sine Qua Non sent a postcard / letter / email every offering to let people know they couldn’t buy wine; intro offerings can engage people right away; drip campaigns also work)