Home Wine Business Editorial Intersection of Key Findings from Two Major DTC Reports

Intersection of Key Findings from Two Major DTC Reports

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by Dawn Dolan

For wineries seeking answers and comparisons, there are two major reports available which can give insights into sales and marketing trends and tactics. Released in May 2019, VinterActive’s VinQuest Report is based on a survey of wineries returning a total of 110 surveys from across the nation (although a preponderance came from CA). The study is based on volunteered information, and Bryan St. Amant, Founder and CEO of VinterActive notes, “It’s a voluntary project. We’ve worked with winery associations for years. They like the information—it’s useful for their members.” He would like to see more nation-wide participation, and shares that, “For the benchmarks, Sonoma or Napa will have closer benchmarks to this information.”

Released in June, WineDirect’s Annual 2019 Direct to Consumer Sales Report, is based on transactional data from 1200 wineries across the nation, all clients of WineDirect, who use their point-of-sale and E-Commerce platforms. Adrienne Stillman, Marketing Director at WineDirect, emphasizes that the data is all anonymous. “We broke out everything by place, then give a more granular view to help people understand it,” she says.

Cross-referencing the two reports reveals an intersection of corroborating information. Beginning with e-commerce, a platform that both reports see as an increasingly important milieu for a winery to sell its goods. VinQuest reports that while most wineries have online sales as part of their purchase options, they show that the number remains fairly small. As a percentage of their sales, in general the larger the winery, the greater the percentage of online sales. Online sales are seen as a tool to be used by existing customers, as a general rule.

WineDirect reports that mobile traffic to websites was at an all-time high at 49% of visits, and that the increase in mobile orders alone was 30% last year. With a high order value, high number of bottles being ordered per purchase, and lowest barrier to entry (your website is open all the time), the opportunity to increase the current 10% penetration is one of their most important take-aways.

Tasting room sales are down statistically, and both sources present that the value in having a tasting room lies in customer acquisition. While wine clubs out-perform DTC sales in established markets, that does not hold true in emerging wine areas, where tasting room sales still reign. Regardless of where a tasting room is located, the acquisition benefit of gaining loyal, repeat clients and wine club members comes from people visiting a brick and mortar establishment. Says Stillman, “Use the tasting room as your customer acquisition vehicle. Treat it as the main source of how you grow your database.”

WineDirect reports that in the past few years, point-of-sale average order value has decreased by 2%, but Wine Club average order value has increased dramatically, by 54%. Part of this increase is due to staff knowledge and customer service. The VinterActive report highlights that the larger the winery, the more sales training their tasting room staff receives in a year. This correlates directly with the value of sales made. Wineries investing in the most training hours saw twice the amount of DTC sales growth.

What is each company representative hoping that the wine industry can take away from their report? Stillman says the basic answer is to use it as a benchmarking tool. St. Amant agrees, “The benchmarks just satisfy people’s curiosity. How do we stack up? Go ahead and compare yourself. Where do you stand? Start with that.”

Stillman has the figures. “Because of the vast size of our client base, we are able to share a unique insight into some of these numbers. Wineries have a granular look and they can benchmark themselves to their peer set. They can use it to decide where to focus their energies if they are under- or over-performing.” She thinks that some of the more emerging regions can use this study to look into the future. She states they could ask themselves, “Where are we going? What should we be focusing on next? Use this information”, she says, “as an opportunity for new wineries to see what they can shoot for.”

St. Amant was somewhat surprised by what activities are associated with higher growth “High intensity sales training—I didn’t realize just how important that is. There is a difference between sending 6 emails per year or 60. I was partially shocked at the high frequency marketing.”

Combining multiple channels of marketing correlated with superior results in terms of sales growth, and is an important takeaway that St. Amant hopes comes through. “What marketing tactics do you use-look at the number. The people who do better, they are doing eight things instead of five things. There is room for hard work and improvement. If you want to be successful, then try it.”

Quick Take Aways

  • Online sales are increasing; be sure your e-commerce is accessible and user-friendly for not only your computer-using clients, but optimized for ease of use from your mobile users. Online sales represent the biggest opportunity for growth.
  • Utilize your tasting room for client acquisition.
  • The better trained your tasting room personnel, the higher the returns. Invest in staff training.
  • High intensity marketing = high returns. Develop a multi-pronged marketing plan.
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