Wineries selling direct-to-consumer can take their businesses to the next level by leveraging online sales, moving to mobile, and valuing the tasting room as a customer acquisition engine.
June 11, 2019 – A report released today by WineDirect, the winery’s leading partner in direct-to-consumer (DTC) services, indicates there is significant room for wineries to increase sales and grow their businesses by selling wine online. Ecommerce sales have high average order value (AOV), yet they represent the smallest share of orders across all sales channels – suggesting an important opportunity for wineries to capitalize on this under-utilized channel.
The comprehensive report includes transactional data from nearly 1,200 wineries and $1.2 billion (USD) in DTC sales in the US, Canada and Australia. Sales channels in the report include Wine Club, Point of Sale, Website and Other, which are broken out by region, price range and production range.
Overall, Wine Club sales make up the largest share of DTC revenue at 36 percent, with Point of Sale coming in a close second at 34 percent. While Point of Sale orders rank high in quantity, they rank lowest in Average Order Value (AOV) at $110. This is less than half the AOV of Website and Wine Club orders, at $282 and $237 respectively, and less than one-third the AOV of Other orders, at $355. Orders in the Other sales channel represent back-of-house transactions such as telesales, corporate orders and private tasting sales.
The opportune nature of Website orders, considering their high AOV, is even more evident when compared to Point of Sale Orders: It is much less costly to execute an email marketing campaign to drive online sales than to increase sales through a fully staffed tasting room, which draws the lowest average sales as indicated by Point of Sale figures.
Additional key insights from the report include:
- If your website isn’t mobile friendly, you are missing out on sales: In 2019, mobile traffic to winery websites is poised to exceed 50% for the first time. And in 2018, mobile orders on winery websites were up more than 30%.
- Growth starts in the tasting room, then moves on to Wine Club and Website channels: Point of Sale revenue accounts for slightly more than one-third of DTC sales. In emerging regions such as Texas, Virginia and New York, however, they make up closer to 60 percent. In more established regions, Wine Club, Website, and Other orders all increase in importance, illustrating that as wineries mature, they come to rely more heavily on repeat sales from loyal customers.
- Wine clubs are small and plentiful: Nearly 60 percent of clubs globally have fewer than 1,000 members. This is most pronounced in Australia, at 80 percent. Even in California, the most mature wine club region, more than half of clubs have fewer than 1,000 members. This suggests wine clubs have significant room to grow, even on their already robust base.
To download the full report, visit info.winedirect.com/2019-dtc-sales-report. Tune in to WineDirect’s webinar for a closer look at their 2019 DTC Sales Report on June 25 at 10:00 a.m. PT by registering at: info.winedirect.com/webinar-2019-dtc-sales-report.
WineDirect is the leader in winery direct-to-consumer (DTC) services including ecommerce, point-of-sale, wine club, fulfillment and marketplace distribution solutions. In an era of rapidly increasing consumer expectations, our unique end-to-end platform enables wineries to provide next-level service and create customer relationships that last. Serving more than 1,600 wineries worldwide, WineDirect is headquartered in Napa Valley with offices in Paso Robles, CA; Santa Maria, CA; Sherwood, OR; Glenwillow, OH; Vancouver, BC; and McLaren Vale, Australia. Learn more about how we are helping wineries succeed with DTC atwww.winedirect.com