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Underground Cellar — Upgrade your wine. Upgrade your life.
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Ryan Jones
Hunter
Really cool site for scoring deals on nice bottles of wine from mostly boutique wineries. It's a flash sale model but what I like most about this company is that instead of offering discounts, a pre-determined percentage of bottles purchased are randomly upgraded to higher-end bottles (including magnums sometimes). The surprise makes it adds a fun game-like element to the process while protecting the winery brands from the negative association of discounting, which I have to imagine is a huge issue in this industry.
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@ryanajon1 Nice breakdown—I was wondering how it worked a bit from the site. I could tell it was along these lines, but that was a clear description.
What issues would discounting have? Is it just that it (potentially) destroys the image of the brand?
Hunter
@willimholte yeah, i think 1) degrading the brand image (it seems like much of the perceived value of a bottle of wine is the price tag itself) and 2) potential cannibalization of full-price sales through traditional channels (the opportunity cost of someone getting their hands on the discounted bottle who would have otherwise paid full price) although this is also solved by the limited-time flash sale aspect of the model (I can't get reliably get a discount on the exact bottle I want when I want it).
All that said, I have absolutely no experience with wine except as a consumer of it so I'm sure there are plenty of other industry insights I'm missing.
@ryanajon1 That all makes sense, and this model is definitely spun as a perk system for loyal customers. Have you purchased much wine through it?