Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

WSET L4 D2 2024 > 5. Retail > Flashcards

5. Retail Flashcards

1
Q

What are the different factors within the retail sector

A
  • Supermarkets
  • Deep discounters
  • Convenience Retailers
  • Specialist wine retailers
  • Hybrids
  • Online retailing
  • Global travel retail
  • Wine investment Companies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the advantages of selling wine in supermarkets

A
  • Largest market share in wine sale = large volumes of wine
  • Market exposure
  • When buying directly, no intermediary costs
  • Private label wines promote customer loyalty
  • Expert winemaker employed by supermarkets ensure quality
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the disadvantages of selling in supermarkets

A
  • Supply exceeds demand = extreme negotiating power = lower profits
  • Additional fees for desirable product placement and marketing
  • Contracts regarding quality = possibility to be left with wine that can not be sold
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What type of wine is sold at supermarkets

A
  • Well-known brands like Jacob’s Creek and Barefoot help attract customers to buy wine
  • Well-known regions and grape varieties, in a style that appeals to wide public
  • In wine-producing countries local wines will dominate
  • In Whole Foods (premium), wines from artisan producers with their own label will appeal consumers with interest in wine
  • Own-Brand wines (e.g Sainsbury’s Taste the Difference in UK)
  • Private label wines
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Give examples of Deep Discounters

A
  • Germany: Lidl and Aldi
  • Denmark: Netto
  • USA: Trader Joe
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How do deep discounters keep their prices low

A
  • Relying on volume of sales rather than profit margin
  • Basic shops
  • Away from prime locations for lower rent
  • Limited product range
  • Private label products
  • No major brands with large marketing budget
  • Buying without intermediary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Give an example of a deep discounter private label wine

A

Charles Shaw “Two Buck Chuck” for Trader Joe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How much people buy wine from deep discounters

A

In the UK
2012: 23%
2018: 37%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are convenience retailers

A

Smaller shops, open for longer (sometimes 24h). Located near where people live. Sometimes independent, sometimes franchise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the advantages of convenience retailers

A
  • Open for longer (sometimes 24h)
  • Closer to where people live
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the disadvantages of convenience retailers

A
  • Usually smaller
  • Usually more expensive
  • In proportion costs are higher: rent, more staff
  • When franchise, operator has to pay a fee to owner
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Give examples of convencience retailers

A

Independently:

  • In India they make up a big part of the market

Franchise:

  • Spar in 34 countries
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are specialist wine retailers

A
  • Sometimes combined with premium spirits and beer
  • Sometimes combined with artisan products such as cheese and delicatessen
  • Sometimes specialised in particular region/country
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the advantages of specialist wine retailers

A
  • Attractive for lesser known/smaller producers
  • High involvement consumers = higher prices
  • Higher prices = higher producer margin
  • More personal service for regulars
  • Hand sell: story, information, food and wine pairing
  • Tastings, educational classes, etc
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the disadvantages of specialist wine retailers

A
  • More expensive
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Give examples of specialist wine retailers

A

Organic, biodynamic, natural wines:
- La cave de Papilles Paris

Fine wine retailers (premium and primeur):
- Hedonism UK

17
Q

What are hybrids

A

Specialist wine retailers with a bar area, serving food like cheese and delicatessen, and sometimes substantial dishes

18
Q

What are the advantages of hybrids

A
  • Consumers can try wine before purchase
  • Regurlarly changing wine by glass showcases also lesser known regions/varieties
19
Q

What are the disadvantages of hybrids

A
  • May need to stay open longer
  • Additional staff
  • Bureaucracy
20
Q

Define “Bricks-and-mortar” retailers

A

Retailers like supermarkets and specialist wine retailers, who offer online and offline sales combined

21
Q

How much sales go through online retailing

A

In China 20%
In USA 2%

22
Q

What are the advantages of online retailing

A
  • Larger customer base
  • No need for expensive shops
  • Warehouses outside of centre
  • Additional information available
  • Offer similar suggestions
  • Read reviews of customers
23
Q

What are the disadvantages of online retailing

A
  • Delivery costs (solution: click and collect)
  • Risk during transit
  • Customers expect quick delivery
  • Need for convenient website
  • Need for distinctive website
  • Technical support in case of crash
  • Need to upload additional information
  • Update stock
24
Q

Give examples of online retailers

A
  • Laithwaite’s UK
  • wine9.com China
  • Pinjiu.com China
  • New York Times Wine Club
  • Sunday Times Wine Club
  • Amazon.com
25
Q

What is global travel retail

A

Located in places where customers are travelling from one country to another: airport, sea port, international railway station, onboard a ship

26
Q

What are the advantages of global travel retail

A
  • Customers have time while waiting for flight
  • Customers want luxury goods they can not find in the other country
27
Q

What are the disadvantages of global travel retail

A
  • Retail space is expensive
  • Lower margin for suppliers
28
Q

Give examples of investment-grade wines

A
  • Bordeaux Premier Cru Classés
  • Burgundy Grands Crus
  • top Napa Valley
29
Q

What is the reason for extreme high prices for investment-grade wine

A

Rarity value

30
Q

What are wine investment companies

A
  • Specialist wine retailers who are allowed a small allocation of rare wines, via the producer or a merchant
  • Brokers who put customers in contact with potential sellers
31
Q

Give examples of fine wine, worth investing

A
  • Bordeaux
  • Burgundy
  • Piemonte
  • Tuscany
  • California
  • Champagne
  • Penfolds Grange, Australia
  • Hill of Grace, Henschke, Australia
32
Q

Define “secondary market”

A

Selling wine on to other investors to make a profit

33
Q

Give examples of wine investment retailers

A

Specialised investment-grade retailer:

  • Cult Wines (Londen, Hong Kong, ..)

Trading exchanges:

  • Liv-Ex (Londen)

Manage wine portfolios (brokers):

  • Amphora portfolio management
  • Cult Wines
  • Sommelier Capital Advisors USA (no need for any knowledge)
34
Q

Who is the hub of wine investing

A

London, but coming under competititon of Hong Kong

35
Q

Give examples of auction houses

A
  • Sotheby’s
  • Christie’s
36
Q

What are the disadvantages of wine investment at auction houses

A
  • Not certain if wine was kept properly
  • Fraud
37
Q

Give examples of wine fraud

A
  • Hardy Rodenstock sold authenticated wine from the collection of Thomas Jefferson
  • Rudy Kurniawan sold vintages of Clos St Denis from Domaine Ponsot that were never released

WSET L4 D2 2024 (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions