Tesco Wine Co-Buys: People’s Insights Volume 2, Issue 19


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This week, we distill insights around Tesco Wine Co-Buys – a group buying program which enables people to refer friends to buy cases of wine at better prices.

100+ thinkers and planners within MSLGROUP share and discuss inspiring projects on social data, crowdsourcing, storytelling and citizenship on the MSLGROUP Insights Network.

Every week, we pick up one project and do a deep dive into conversations around it -- on the MSLGROUP Insights Network itself but also on the broader social web -- to distill insights and foresights. We share these insights with you on our People’s Insights blog and compile the best insights from the network and the blog in the People’s Insights Quarterly Magazine, as a showcase of our capabilities.

We have further synthesized the insights to provide foresights for business leaders and changemakers — in the ten-part People’s Insights annual report titled Now & Next: Ten Frontiers for the Future of Engagement, now available as a Kindle eBook.

For more, see: http://peopleslab.mslgroup.com/future-of-engagement

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Tesco Wine Co-Buys: People’s Insights Volume 2, Issue 19

  1. 1. crowdsourcing | storytelling | citizenship | social dataTesco Wine Co-BuysPeople’s Insights Volume 2, Issue 19
  2. 2. Volume 2, Issue 19,April - June, 2013Future ofMoneyTesco Wine Co-Buys100+ thinkers and planners withinMSLGROUP share and discuss inspiringprojects on social data, crowdsourcing,storytelling and citizenship on theMSLGROUP Insights Network. Everyweek, we pick up one project and curatethe conversations around it — on theMSLGROUP Insights Network itself butalso on the broader social web — intoa weekly insights report. Every quarter,we compile these insights, along withoriginal research and insights from theMSLGROUP global network, into thePeople’s Insights Quarterly Magazine.We have synthesized the insights fromour year-long endeavor throughout 2012to provide foresights for business leadersand changemakers — in the ten-partPeople’s Insights Annual Report titledNow & Next: Ten Frontiers for the Futureof Engagement.People’s InsightsIn 2013, we continue to track inspiringprojects at the intersection of socialdata, crowdsourcing, storytelling andcitizenship.Do subscribe to receive our weeklyinsights reports, quarterly magazines, andannual reports, and do share your tips andcomments with us at @PeoplesLab onTwitter.People’s Insightsweekly reportPeople’s Insightsquarterly magazinesPeople’s InsightsAnnual Report
  3. 3. 3What are Tesco Wine Co-Buys?In May 2013, Tesco partnered with buyapowa to launch Wine Co-Buys – a group buying platform whichenables people to refer friends to buy cases of wine at better prices. The model relies on the power ofpeople’s networks and on Tesco’s commitment to deliver genuine value.Marketer India Warman wrote:“All retailers are battling to come up with innovative ways to attract customers at the moment. With onlinesales being so high and customers dictating how they want to buy, Tesco may have got the right idea!”Source: tesco.comSource: tesco.comPower to the PeopleThrough the Wine Co-Buys, Tesco shifts somepower to the people, giving them more controlover the product pricing and a say in whichproducts should be included in the next Co-Buy.According to Social Commerce Today’s PaulMarsden, the program is an example of “socialcommerce for the empowered customer”:“What we particularly like is that it appears to bedemand led; customers are able to choose wines theywant to buy together in bulk – and set a maximumprice they’d be willing to pay. The more people thatsign up, the heavier the discount – with the personwho recruits the most co-buyers – via social sharing– getting a case of wine for free. Sweet.”How it worksTesco announces upcoming Wine by the CaseCo-Buys on its website and invites people to signup for an email notification. Once a Co-Buy goeslive, people can go to the buyapowa websiteand “join” the Co-Buy. People enter their name,address and payment details, pay a £1 joining fee,and commit to purchasing the case of wine at thefinal price achieved by the Co-Buy.Source: retail-week.comThe starting price for the product is alreadydiscounted, and people drop the price lower byinviting friends to participate in the Co-Buy andpurchase the product.As Alex Lawson pointed out:“Shoppers commit to a maximum price but theprice point falls as the number of people thatpurchase the product increases.”Mommy blogger Leanne Amy explains “how the‘prices drop as people shop’ thing works”:
  4. 4. Volume 2, Issue 19,April - June, 2013Future ofMoneyTesco Wine Co-Buys“There are three price drops, and the obvious goalis to get enough people to join the co-buy that thethird price drop (and therefore the lowest price) canbe achieved.“Typically, there will be 100 units of each productto be sold. If between 1 and 24 people join theco-buy, they will pay BuyaPowa’s starting price forthe item (which is already lower than RRP). Oncemore than 25 people join, the price will drop some.At 50 people, it will drop again. At 75 people (up to100 when the items sells out), the third price dropwill happen and everybody receives the product atBuyaPowa’s best price.”Source: buyapowa.com/deal/2441Source: buyapowa.com/deal/2441Source: buyapowa.com/deal/2443The number of participant slots for the TescoWine Co-Buys varies from 25 to 150, dependingon stock. As a result, most Tesco Wine Co-Buyslast only a few hours. At the end of a Co-Buy,Tesco issues participants an eCoupon which theycan use to buy the specified case of wine at thebest price achieved. The eCoupon includes afurther £1 discount, to make up for the joiningfee, and must be redeemed within two weeks.Source: Tesco Co-Buys: The more people who buy, the better for price… forEveryone!Power of People’s NetworksTesco encourages people to use the power oftheir networks with more than just the price drops– the person to refer the most number of friendsin the least amount of time “Wins the Co-Buy”and receives the case of wine for free.The leading participants are featured on a publicleaderboard, increasing the sense of competitionbetween players and egging them to recruit morefriends.To further widen its reach, Tesco recentlyintroduced the “Share to Win” feature, whichallows people participate in “Win the Co-Buy”without actually placing an order. This featureseduces people with large social followingsto promote the Co-Buy without making acommitment to buy. In the event of a tie, thepaying participant would take priority over the“Share to Win” participant.Blogger beccacaddy wrote:“This means there’s also quite a big social element toBuyapowa, as users are encouraged to get more peopleto buy the product they want. No matter how sneakyyou might think that is on Buyapowa’s part, you can’tdeny it’s a pretty clever selling tactic, get someone elseto promote the products on your site for you.”
  5. 5. 5Source: buyapowa.com/tescoSource: http://www.buyapowa.com/tesco#request-lightboxSource: notsupermum.comSource: tescowinecommunity.comPeople can also use the power of their network torequest products for future co-buys. Tesco’s rulesnote:“When three or more people nominate a productthey would like to buy in a one-week period, we willimmediately get to work on their behalf to see if wecan create a Co-buy deal, and we will always do ourvery best to make it happen.”Promoting the Co-BuysTesco promotes the Co-Buys through its bloggernetwork of Tesco Wine Ambassadors and itsown online wine community. At the launch ofTesco community managers typically announcethe individual Co-Buys on the Tesco winecommunity blog. But with the steep competitionand short timeframes, community members nowmake the announcements to ensure their friends– and referrals – get the chance to participate.the platform, the ambassadors introduced andexplained the concept of Co-Buys in their blogs.Genuinely good pricesThe success of the Co-Buys rests heavily on Tesco’s commitment to deliver genuine value.Potential participants are typically skeptical of the claim of “best price,” as community member Aimetupointed out:“I’m just not sure about this - the lowest prices depend on purchasers but I’m sure the low prices have beenavailable at various times throughout the year or various promotions.”Tesco’s community manager Charlotte Stebbings was quick to counter:“We ran an offer on Jackson Estate Stich Sauvignon Blanc in March of this year with a promotional price of£54 for a case of 6. The final price of the latest Co-Buy at £45 for a case of 6 is significantly below this and isa fantastic price for a wine of this quality and reputation.”
  6. 6. Volume 2, Issue 19,April - June, 2013Future ofMoneyTesco Wine Co-BuysSource: guardian.co.ukSource: nakedwines.com/angelsSource: clubw.comIs the buyapowa model here tostay?The concept of group buying was previouslyintroduced by deal sites like Groupon, which tendto focus on services. buyapowa, on the otherhand, focuses on a wide range of products – fromhousehold items (Crest WhiteStrips), gadgets(Amazon Kindle) to beauty products (Lancômemascara, YSL nail polish, Jean Paul Gaultierperfumes).Mommy bloggers like Sylvestrix applaud themodel for making high end products moreaffordable:“I originally started keeping an eye on it forhousehold items, but I’m super excited aboutthe potential it has for bringing high end beautyproducts down to a more accessible level.”Other innovative buying schemesEntrepreneurs and organizations areexperimenting with new buying schemesdesigned to build loyalty. Two examples in thewine category, via Social Commerce Today, areClub W which offers a curated selection of wineevery month, and naked wines which invitespeople to support independent winemakers andbecome ‘naked angels.’
  7. 7. People’s Lab is MSLGROUP’s proprietarycrowdsourcing platform and approach thathelps organizations tap into people’s insights forinnovation, storytelling and change.The People’s Lab crowdsourcing platformhelps organizations build and nurture publicor private, web or mobile, hosted or whitelabel communities around four pre-configuredapplication areas: Expertise Request Network,Innovation Challenge Network, Research &Insights Network and Contest & ActivationNetwork. Our community and gaming featuresencourage people to share rich content, vote/comment on other people’s content andcollaborate to find innovative solutions.The People’s Lab crowdsourcing platformand approach forms the core of our distinctiveinsights and foresight approach, which consistsof four elements: organic conversation analysis,MSLGROUP’s own insight communities, client-specific insights communities, and ethnographicdeep dives into these communities. The People’sInsights Quarterly Magazines showcase ourcapability in crowdsourcing and analyzinginsights from conversations and communities.People’s Lab:Crowdsourcing Innovation & InsightsLearn more about us at:peopleslab.mslgroup.com | twitter.com/peopleslab
  8. 8. For People’s Lab solutions, contactpascal.beucler@mslgroup.com