Understanding consumer heuristics can help drive innovation in a traditional category like wine
“What the wine industry really needs is innovation” is something we hear often in discussion forums. And rightly so because as an industry we need to compete with craft beer, cocktails or ciders who are doing a very good job connecting with younger consumers.
On the other side “I want… that Pinot Grigio on offer” is also a familiar sentence reminding us of the lack of adventure that a good number of consumers show when approaching the wine aisle.
So how is innovation possible in the wine industry? How can we reconcile both opposites?
In his work in the 1950’s Herbert A. Simon, psychologist and arguably founding father of Behavioural Economics, distinguished between two consumer heuristics when choosing: satisficing and maximising.
Maximising is what consumers do when they deeply understand a category and look for the best product they can find within it.
Satisficing, a word deriving from the mix of satisfy and suffice, is what consumers do when choosing a product in a category they don’t master. Satisficing is choosing what will simply do the job, not the best product, but certainly not the worse. Satisficing is what the tourists do when having a coffee in Starbucks while in Rome or Paris: “there must be some great bars around here… but there must also be some awful tourist traps so I’ll go for a Starbucks”. And satisficing is what the Pinot Grigio consumer does, it’s safe and reassuring, not the best, but probably not a risky choice as everybody is doing it.
In such a complex category as ours maximising is scarce. Perhaps this is what consumers do when buying wine online for their wedding or another important occasion: they research, read opinions, compare prices… but the majority of times consumers are purely satisficing, deciding fast and simple, moving away from anything which is not recommended, moving away from the unfamiliar, the risky product of the unknown origin.
Innovation and change certainly happens, but as we have seen over the years it’s gradual and needs to offer consumers something new and exciting but wrapped with a coat of reassurance and familiarity.
When we conduct new product development research in the wine category we have to equally consider the appeal and attractiveness of a new idea or product but also balance it with how far away it is from the basic cues target consumers use to navigate the wine category.
In the end this means some innovations will never fly, not because they are bad ideas necessarily, but because they don’t get the reassurance levels right to allow consumers to step away from the satisficer rut they are stuck in.
To square this particular circle, perhaps a better question to ask is: how can I innovate to make the satisficer process easier, whilst generating some distinctiveness? Or how can I reduce the complexity of the maximiser process so as to make it a viable option for a greater proportion of my addressable market?
Author: Juan Park