By Larry Cormier, general manager of ShipCompliant by Sovos
Instacart. UberEats. Grubhub. Zifty.
Apps like these have added convenience to everyday retail experiences, outsourcing third-party delivery beyond pizza and Chinese takeout to grocery stores and local restaurants. Meanwhile, ready-to-cook meal delivery companies including Blue Apron and Hello Fresh are thriving as customers become more accustomed to ordering products of every type remotely.
The “delivery economy” has upended consumer expectations for seamless at-home consumption. Younger buyers, particularly Millennials, now anticipate that businesses will cater to their desire for on-demand delivery options – and that trend is being felt by the wine industry, too.
In 2018, wine drinkers overall spent a record $3 billion on direct shipments from wineries, a 50 percent increase since 2015, according to the2019 Direct-to-Consumer Wine Shipping Report from Sovos and Wines Vines Analytics.
All of this increased demand for home wine delivery has introduced new competitive threats. In many states, wineries face new pressure from independent wine clubs, meal delivery companies, grocery stores and online liquor stores all seeking to uncork this growing trend. And with a Supreme Court decision expected this summer that could loosen regulations restricting interstate wine shipments, the competitive landscape for direct wine sales could soon get a lot more crowded.
Still, wineries have one trick left up their sleeves; they can create authentic experiences Millennial wine consumers crave. By extending the tasting room experience online, connecting with younger consumers directly and offering them greater convenience and exclusivity, wineries can forge lasting brands fit for this growing market.
Invest in the digital experience
Whereas older generations may have looked to a particular critic or publication for recommendations on wine, Millennials want to hear directly from the label. They want the story behind the vineyard, the founders, the wine-making process, and the type of grape in front of them. They want to hear from producers and sommeliers about what makes their soon-to-be-favorite bottle of wine special.The good news is most wineries are already experienced in telling their stories.
In the past, tasting rooms and wine clubs, often tied to smaller wineries, were responsible for much of the direct-to-consumer channel’s organic growth. The challenge is simply translating that experience to a wider audience who might not have the time or money to visit Napa Valley, for example.
Social media, notably Instagram, is the most obvious way wineries can extend the tasting room experience online. It is a direct line of communication with consumers to tell the sort of behind-the-scenes story that can forge a lasting, personal connection. Wineries like Jordan and SCRIBE. have built impressive followings just that way.
It may seem like a big investment in time and resources, but frequent postings with high-quality photos give consumers something to react to and can drive demand for both online shipments and in-person visits.
For example, wineries can generate excitement about their latest harvests with photos of fresh-picked grapes, share live videos with a sommelier comparing different vintages, and offer grocery checklists for food that pairs well with their flagship bottles. In this way, they can extend the tasting room experience to the masses and reach a wider organic audience – helping consumers bring the winery experience home.
Don’t forget the role of packaging and labeling
For the direct-to-consumer Millennial customer, packaging is especially important. Arriving at a customer’s front door safe and sound is the minimum expectation. The unboxing process also needs to be easy, and wine producers need to think carefully about the impression they are making before any bottles are even popped open.
With a strong economy, 2018 saw the largest average price-per-bottle increase since 2011 for the direct-to-consumer channel. Customers were also more willing to open their wallets for wines priced at $100 or more, which increased by 18 percent in volume compared to 2017.
The “delivery economy” is pushing up consumer expectations for what they’re buying, especially for high-end purchases, and that extends to packaging and labeling decisions. To stand out not just against other vineyards but also wine clubs and meal delivery companies, producers need to get creative with the stories they are telling from cart to home.
Bold labels and packaging can do more than help bottles stand out on retail shelves and online catalogues. Each are examples of touchpoints that can be used as an opportunity to engage younger consumers, evoking emotional connections that foster memorable moments that keep them coming back for more.
Use exclusives to drive Millennial direct sales
Last year, 10 percent of all domestic off-premise retail wine sales were shipped directly to consumers. As this channel continues to grow, another way wineries can stand out and create personalized experiences is by changing up their product offerings to direct customers.
Millennials want to feel connected to the brands they engage with and wineries can lean into this by offering this audience exclusive deals and first choice on orders of small-batch vintages and varietals. These unique offers can help Millennial consumers feel valued and in-the-know for long-term brand loyalty.
As with other industries, the wine market has catered to the tastes of Baby Boomers and Gen Xers for decades. With each year, however, Millennial wine drinkers grow closer to overtaking these generations as key demand drivers by flexing their growing spending power.
By investing now to cater to their buying preferences for convenience and personalized experiences, wine producers can capture a larger share of the Millennial market and the growing direct-to-consumer market.