The data is in, and it reminds me again of the Stockdale Paradox: that you face the most brutal facts of your current reality, and retain faith that you will prevail in the endgame. Here’s what we know about our brutal facts: most wine consumers are indifferent to your brand over another within the same pricing and AVA tier; relatively few people who know you, care about you and actively seek you out; and, wine aisle decisions are mostly random, driven by varietal, price and pretty label.
We can validate these truths by assessing the ten year trend of wine ecommerce. Looking at data over a ten year period, we can see that most of the growth in wine ecommerce can be explained through simple, industry-wide P&L category shifts. Simply put, wineries are moving their club shipments and tasting room sales processing to the web cart. We estimate that more than 90% of all transactions within ecommerce platforms fit within these two categories, with another 5% of the transactions being event based (cellar parties and tasting events). That leaves only 5% of all wine ecommerce transactions attributed to traditional e-tailing – the kind of e-tailing we see at Amazon, Etsy, Williams-Sonoma, Zappos and, frankly, everywhere else on the web. Said another way, consumers other than those we already know are not searching for, finding and shopping on our ecommerce sites. They are not seeking us out. They don’t get to know us this way. And we’re converting almost no cold call, first time shoppers. Some retailers succeed through discounting, and a few brands have learned the “push” methodology, but they are few and far between. For the most part, consumer acquisition via e-tailing has been a big dead end.
To change this trend, and to retain faith that we will prevail in the endgame, we need to change the way we approach consumer engagement, merchandising and customer service. The Groove article, “Push and Pull Marketing for the Wine Industry” addresses consumer engagement strategy issues that must be applied to grow wine ecommerce. The data proves that “pull” cold calling is not effective so the transition to effective “push” marketing is imperative. From a merchandising perspective, the most successful ecommerce is made possible when customer data is leveraged to create personal experiences across every branded touchpoint. Purchase history is obvious but vital and usable data exists in non-purchase site behavior and “push” communication actions. We can collect that data through social engagement, email interactions, mobile app download and usage, and off-line engagement at the tasting room or through telemarketing. That data is then leveraged to drive communication, merchandising and third party system integration around a 360 degree marketing automation and personalized merchandising experience. This personalized experience extends to all push (dominant) and pull (secondary) touchpoints and platforms: social, mobile, email, SMS, and on-premise.
At Groove, we call this Social Shopping, and we are launching several brand and retail sites this fall to prove the model. This platform release will provide the e-tailing capabilities of Amazon, Etsy, Williams-Sonoma and Zappos, and will allow us to nurture consumers like never before. Finally, as an industry, we must move customer service past order confirmation and club nurturing. It has always amazed me how few tasting room employees actually get meaningful brand training – either functional or emotional essence wheel insight training. If we’re not even educating our tasting room folks then what should we expect customer service to be like at the call center and with digital partners, like Groove? This must change. Until we treat consumers the way Zappos or Amazon treats consumers, the ten year trend will not change. However, if we live by the Stockdale paradox, we can see how a transformation of consumer engagement, merchandising and customer service will change our endgame.