Ecommerce has long been the most under-utilized DTC sales channel in the wine industry. In fact, according to WineDirect’s DTC Sales Report, only 10% of wineries’ DTC revenue comes from web sales. The vast majority of revenue is driven by wine club and tasting rooms sales — but with more tasting rooms closed, wineries are looking for other sales channels. As a result, there is a DTC ecommerce movement underway for small and large brands alike.
Fortunately, the average value of an online wine order is 2.5 times greater than that of the average tasting room sale. This underscores an incredible opportunity for you to pivot your focus to one of the most valuable sales channels available - one that you can capitalize on now and in the long term.
Here's the story of Kramer Vineyards, a WineDirect client finding integrated ways to shift their strategy online, segment their audiences, and offer loyal members and first-time buyers offers that are driving record sales right now.
Owner Kim Kramer noticed tasting room traffic at her Yamhill winery in the Willamette Valley beginning to diminish in late February. In the first week of March, her wine club event was noticeably under-attended, and that’s when Kim knew it was time to shift her focus. Up until then her 4,000 case winery had been selling DTC primarily through the tasting room. “I decided to lower the threshold for shipping costs, offer local hand-delivery, and train people who were accustomed to buying face-to-face to begin purchasing online.” This has resulted in a 603% increase in online sales compared to last year.
Kim launched an aggressive offer for west coast customers, with shipping included on the purchase of three bottles. For other regions, she offered flat rate $10 shipping for 6 bottles. This was hugely successful, and a new ecommerce strategy began to unfold. Kramer’s email campaigns previously targeted mostly locals and club members, leaving their mailing list largely untapped. Now, Kim is now running a Warehouse Wine Special on vintages stored at the winery property — a weekly discount running through April, with different wines based on inventory. The new strategy of tapping into Kramer’s mailing list is paying off.
Having widened her audience pool, Kim is segmenting by location based on shipping zone. Using this strategy, she’s seen one-time buyers who spent $25 in the tasting room in 2017 purchasing $500 in wine. “It’s an eye opener to how much potential there is if you can get in front of the right people,” Kim said. Ecommerce previously made up a small sliver of sales at 5%, and is now up to 30%.
The next priority is figuring out how to attract new club members. Most club members have signed up after visiting the tasting room, and now Kramer is moving their strategy online. Using WineDirect’s List Builder tool, Kim is creating a segment of mailing list members who always open Kramer’s newsletters but aren’t yet club members. She’ll also create a list of mailing list members based on LTV (lifetime value). Next, she’ll run an A/B test of newsletter openers vs. buyers within the LTV range she chooses. Having used WineDirect’s MailChimp integration for the past year, she finds that List Builder offers a sophisticated level of segmentation that allows her to create lists she can upload to MailChimp and execute sends from there.
Check out our recent webinar for a deep dive on how to leverage WineDirect’s List Builder tools.
An integrated approach across all digital channels is also important. Sending an email is just one of several steps — Kim also made sure to highlight her shipping offer in the hero image on Kramer’s homepage, call it out in their online store, and post about it on social media. Using a multi-channel strategy gets more eyes on your offer, which translates to more sales. It also provides a cohesive online experience with your brand. Right now, that’s more important than ever.
As we were getting ready to publish this post, we received a note from Kim that perfectly underscores the power and value wineries have at their fingertips right now with ecommerce:
"Also, since we spoke, I've run a few targeted promos focused on customers who have purchased specific skus in states with lower shipping costs. Those promotions had open rates that rival our wine club newsletters, and we sold out of one of the wines in three hours. It's really basic stuff that I should have been doing all along. I need to seriously re-prioritize this kind of targeting when we reopen. Online sales are for everyone — people who want to order online and pick up, locals who appreciate the convenience of shipping, and those who aren't local who want to order our wines. There's so much opportunity if we communicate the possibilities!
We couldn't have said it better ourselves.
