Individual Assignment: Last Bottle

Individual Assignment: Last Bottle

        Last Bottle is a wine retailer that succeeds by setting themselves apart from their competitors by creatively circumventing traditional ways of distributing wine. The two major ways they do that is eliminating overhead costs and giving up store credit in order to build their customer base.

         On their website they are very transparent about how they conduct their business and how they are able to keep their prices so much lower than their competitors. They state that they don't spend money on “Fancy offices in Manhattan” or anything that “keeps the customer from saving money.” This is evident elsewhere in the website when it emphasizes that there are no call centers, for that very same purpose.

        It’s also clear how important word of mouth is to their company, as the first thing your eye is drawn to is their promise of $30.00 of credit just by getting someone else to sign up, which is the equivalent of almost two bottles of their wine (depending on the week). Additionally, you get credit by being the person to purchase the "last bottle” of their offer.

        These strategies have been profitable for them, and by utilizing our strategy canvas we will get a clearer picture as to why that is, compared to the competitors in the market. If the cost leader in Montana is a retailer such as Walmart who is selling bottles for $6.00 per bottle. Compare that to an expensive wine distributor such as the Depot whose most expensive bottle is priced at $450.00(www.depotmissoula.com) but having more affordable options closer to $40.00. Although not a median, Last Bottle seems to be a fairly average price when compared to the wine market as a whole, selling bottles that are normally $30.00 for $15.00.  Other sought after values regarding wine are: taste, availability, wine selection and customer service.

        In regards to taste,  the difference in quality of taste in relation to price is up for debate. On the Podcast Freakonomics, they discuss blind taste tests of wine that show little to no difference in preference between wines of different prices, sometimes showing the affordable mid-range wine to be the favorite (Episode “Do More Expensive Wines Taste Better?”). Given this information, taste would be almost equal between the three, with possibly the $6.00 bottle being below the other two. Availability is where more differences start to appear, with Depot being the hardest to obtain, being a specific restaurant that in most cases needs to be driven to, and is unavailable to most of the world. Walmart, when not taking into consideration online options, is available at hundreds of locations across the United States as long you’re able to access one of them. Last Bottle would be the leader in availability, because as long as you have a mailing address in the lower 48 states, you have access to their wine.

        When it comes to the selection of wine each retailer offers, Last Bottle is quite low compared to  the others, since they offer one type of wine at a time. In contrast to the Depot which has multiple shelves of various wine at any given time, offers anywhere from $35.00 to $450.00 (as stated above), and plenty of options in between. Not only that, but they also offer most of those wines by the glass, which doubles your options of how you’d like to consume your wine. Walmart, who has a small section dedicated to wine, lies in the middle of the two, with a small range of generic wines.

        There is also the customer service aspect of wine shopping. This is one major way that Last Bottle is able to be so affordable, they have the absolute minimum customer service in the purchasing process. This means that if you have any questions about how to buy, or what you’re buying, you need to go through extra steps just to get on the phone with anyone. Wal-Mart is a little better in the sense that you can talk to an employee with relative ease, even though there is little guarantee that they’ll know much about the product itself. The Depot is where you’ll get the best service, because you’ll be talking to people who, not only should know about that which they’re selling, but will also be able to answer other questions (i.e. What food should be paired with which wine, their personal wine preferences etc.)

        Last Bottle did create blue oceans though, and that is their rewards system, by focusing  on rewarding those who refer friends and spread the word. This type of credits system creates word-of-mouth advertising in its most effective form, and seems to save them money by not producing commercials or other traditional forms of advertising.

        Last Bottle expertly eliminated unnecessary costs by ridding themselves of` call centers, advertising, and “fancy offices”, this enabled them to reduce costs. They reduced the hassle so involved often in getting wine, allowing it not only to be delivered to your door, but the fact there is only one wine to choose from at a time, this reduces the time spent choosing which wine you will buy. As mentioned, Last Bottle created an efficient system of word-of-mouth marketing with their incentive program. They combined that with their flash sales, which are unique in that they just offer one wine at a time, making it an easy selection process. They raised the involvement of online, and by combining all of these factors, raise the convenience of purchasing wine.