Without giving away too many spoilers, our final project will involve a wine subscription service. One of the most famous recent subscription services is MoviePass, a company that allows you to see unlimited movies in theaters for $9.95/month. How can such a company possibly make money, when the average price of a single theater ticket is greater than $10 in many cities?
Part of the answer, according to this article, is that MoviePass doesn't need to be profitable on individual customers. Instead, they're amassing a treasure trove of valuable customer data -- which demographic groups are flocking to which movies, and when?
A wine subscription service that sold its product to customers at or near cost would also amass valuable customer data. It could understand which wines are currently trending at restaurants and with consumers, and pair that with demographic data. Part of Google's appeal is to understand what consumers are searching for at a given moment, while Facebook's appeal is to pair customer demographic data with product interests. A wine subscription service could potentially collect both demographic and temporal (timely) data.
Up-to-date information on customer trends -- both what your friends and influencers are drinking, and what the hottest restaurants are serving -- could provide transparency in the industry and eventually supplant critics like Wine Spectator or Wine Advocate.
This is a great comparison point and explanation for how the economics could work. I wonder though how for something like wine where there are so many options (in contrast to movies) how you would be able to have sufficient inventory to accurately reflect the marketplace without 1. overwhelming customers and 2. overwhelming your logistics team. I'm sure you've already thought of answers to these challenges so looking forward to learning more in class tomorrow!
ReplyDeleteLove the idea of a wine subscription service and as you know there are many out there including Wine, Blue Apron, Cellars Wine Club etc. The price for most of these subscriptions is $45 minimum on the wines themselves without tax and shipping. With tax and shipping you are quickly at $65 which isn't approachable for most consumers. I wonder if there is a way to make a wine subscription more approachable by offering pickup at local retailers? There is obviously the distribution issue inherent in all of this but there must be a way to get around this.
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