Big Data
On Thursday, Joe Waechter mentioned that WineDirect has a growing database of consumer purchases, inventory, shipments, and more that has not yet been fully leveraged. This is a shame, as this data could be key in driving higher growth for the business. Here are a few ways consumer purchase data could be a powerful tool for the company:
- Wine ratings. These can be used to nudge users towards bigger purchase baskets, whether more expensive wine or more bottles of wine. WineDirect can also sell this data to retailers such as supermarkets who want to better stock their shelves.
- Recommendations and advertising. Consumers' past purchase behavior can be used to serve advertisements for other wines they may enjoy. This data can help determine when to serve promotions or coupon codes to drive more sales, which can be sold back to the wineries.
- Inventory trends. Better predict which wineries' offerings are becoming more popular and when stock-outs will occur. Minimizing stock-outs and decreasing bottles on hand would drive higher profits.
- Shipment timing. Determine which cities see order spikes during which seasons, and better predict and prevent shipping delays.
WineDirect's data would probably be in high demand from retailers and wineries. Knowing that Amazon is very much a data-driven company, I imagine this data to be key in deepening the partnership between WineDirect and Amazon, for which Joe seems to be keen.
@Christina,
ReplyDeleteThis is a great post and I'm so glad you wrote it. I was considering doing one myself re: Big Data; however, you captured everything I was going to discuss (and more). The only one I would push back on is your second bullet; specifically, advertising. Observationally, it feels that consumers, myself included, are being frustrated with in-app or in-web advertising. I feel that WD would risk increasing their customer churn if they start an aggressive targeted advertising campaign. I wonder if WD wouldn't be better served to monetize this database by wrapping this database into an offering provided to wine-maker SaaS subscribers. For example, for an extra X$ per month/year, WD will allow you to access the database to observe consumption trends, which enables the winemaker to refine production, marketing, etc.
Either way, what an exciting opportunity for the company!
I totally agree with you that these data are of great value especially more and more wine are sold online. I think not just Amazon, any offline retailers will be so interested to get those data and find the proper assortment and advertisement solution for consumers.
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