The data is in, again, and the supposed growth in DTC ecommerce continues to be mostly a myth. I know, there will be people at Vin65, eWinery, Drizly, Vivino, Amazon and, now, eBay, screaming “foul” as they all continue to show growth in overall sales. And, indeed, some of those players are seeing sales growth. However, it’s not the kind of growth wine producers expected when you built out your beautiful ecommerce channel.
Looking at ecommerce sales 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 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. Another 5%-6% of all transactions are event based (cellar parties, concerts and tasting events). That leaves only 4%-5% of all wine ecommerce transactions attributed to traditional e-tailing – the kind of traditional e-tailing we see at Amazon, Etsy, Williams-Sonoma, Zappos and, frankly, everywhere else on the web. DTC is growing because more wine producers are moving their accounting systems to the web platform for digital transactions. That’s not to discount Amazon, Vivino or Drizly completely, but those are wholesale transactions not DTC.
Let’s put this another way: Wineries are not really discovering consumers and consumers are not really discovering wineries through their web sites, except at 4% to 5% of their overall DTC business. Consumers other than those you already know are not searching for, finding and shopping on your ecommerce sites. They are not seeking you out through search. They don’t “trial” this way – and likely never will. For the most part, consumer acquisition via traditional etailing is a big dead end.
Wineries need to change the way they approach consumer engagement, merchandising and customer service. The Groove article, “Push and Pull Marketing for the Wine Industry” addresses consumer engagement strategies that should be applied to grow wine ecommerce. 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 collect that data through social engagement, email interactions, mobile app usage, and off-line engagement at the tasting room. We then leverage this data by using it to drive 1:1 outbound and inbound communication with consumers.
At Groove, we call this Social Shopping. We provide a platform with the e-tailing capabilities of Amazon, Etsy, Williams-Sonoma and Zappos, and connect it to 1:1 behavioral marketing to personalize and optimize every touch. That could be a tailored email sent out only to fans of Pinot Noir that simultaneously alters the home page of your web site to promote Pinot Noir tastings at the winery and special bundle offers on your best Pinot Noirs. Then, based on behavior, tailored call center or text messages that follow up individually with interested consumers. This kind of lead nurturing, personalized 1:1 engagement with low barriers of entry for trial, is the only way winery ecommerce is going to change.