December 2021 is here, which means celebrations are in order. And while COVID-19 is still very much around – and spiking in some countries – many are still planning on gathering to ‘make up for lost time’, specifically the lost holiday dinners and New Year’s Eve parties this time last year when the situation was significantly bleaker. For the sake of a wine-centric column, this may translate into a greater desire to consume, especially at the premium end as a way of elevating the experience.

As we’ve witnessed during Q3 and into Q4 for key domestic tourist cities like Las Vegas, Miami and New York, people are eager to travel, and this trend is likely to continue right up until Monday, January 3, 2022 (and beyond for sun destinations). Combining this pent-up demand with the psychology underlying lost time and wanting to make any party truly count, it’s your job to meet guests with a selection of great beverage offerings and hopefully turn a buck in the process.

Undoubtedly, you’ve already given this some thought. From holiday seasons past you know how to craft a special drinks menu and to stock some extra champagne for the occasion. We’ve covered some points to this end in past In Vino Veritas columns and if you need inspiration then Google is just a search away. Instead, we want to touch upon the concept of anchor pricing and how you can use it to maximize your beverage sales for the month ahead.

A form of cognitive bias, anchoring is when a person is influenced or nudged towards a particular outcome or decision based upon a previously introduced point of reference. With applications throughout behavioral economics, the ‘pricing’ comes when applying this concept to all manner of purchasable goods.

As a foremost travel-related example, consider a two-part thought experiment. In the first part, subjects were asked to choose between an all-inclusive trip, four-night to Paris and an all-inclusive, four-night trip to Rome with both sold for a fictitious $999 total. Barring personal or nationalistic preferences for either city within any sample group, the results were more or less an even split.

Now for the second part, subjects were also asked to choose between those same two $999 Parisian and Roman vacations, but a third option – Rome a la carte priced at $499 – was thrown in. In this latter case, the overwhelmingly favored choice was the all-inclusive Rome trip. The rationale here is that the cheaper, a la carte alternative to the same city offered a reasonable comparison or ‘anchor’ through which to see the value of the more expensive Roman trip. Paris had no such analog and thus participants were less able to accurately assess the $999 cost to go to the French capital.

A more quotidian example would be your run-of-the-mill Starbucks coffee break where you must choose between a tall, grande and venti (excluding the trenta which is only really there for coffeeholics). Amongst these three options, the most commonly chosen size is the grande – the middle choice – because it is deemed the best value relative to both extremes.

Exporting this principle to wine, what should be apparent is that ordering matters. The first price that customers see will set the tone for the rest of the menu. Similarly, the more luxurious and more expensive end of your wine list also matters insofar as determining the perceived value of all those possible choices in the middle. In other words, if you want people to pony up for a bottle of Dom Perignon, you may want to add an even more prestigious sparkler in the adjacent space on the printout (or PDF) so that both bottles are immediately comparable against each other.

There are numerous other subtle and overt ways that anchor pricing can help you craft a beverage menu that optimizes what items guests select most frequently. And as this is the lucky 88^th column of In Vino Veritas, we wish you the best of luck in your pursuit of holiday season revenues (although the lessons from anchor pricing apply year-round and are something to ponder for 2022).