Top 3 DTC COVID wins for Wineries, the lessons learnt!

To say ‘2020 was a challenging year’would be a massive understatement but it was certainly a defining year in terms of changes, many that are positive for wineries and will no doubt stay with us for a long term.

While COVID-19 is still with us and no doubt will be for some time yet, wineries have adapted to this ‘New Norm’ and in most cases are better off as a result.

Online sales across all vinCreative customers increased by an average of 38% in the period from April 2020 to December 2020 compared to the same period the previous year. Interestingly wine club sales also have increased slightly, as did the overall average basket size across all winery sales channels.

Here are 3 examples of how vinCreative customers have adapted their DTC businesses to make the most of the opportunities that have been presented.

Paid tastings

Taking a cross-section of data from vinCreative customers who operate cellar doors, we've found that the average tasting fee charged is $10 and the average number of paid customers visiting cellar doors each week is around 60. Granted that pre-COVID the number of actual tastings was higher but as shown below the figures speak for themselves.

As a matter of fact, when you add up the conversion ratio and average size, the figures are compelling (bear in mind,these figures do not take into account any savings with regards to staffing costs or wastage).

Prior to 2020, wineries were one of the only industries (globally) that were happy to give away their product. When you think about it, it is a crazy notion that all the hard work goes into the final bottled product, only for it to be given away to anyone who visits you and many of whom have no intention of purchasing any products?

Most wineries have now turned to paid and seated tastings (Hooray!) which have brought some very interesting changes. Not only have the public accepted this without question, but they have also embraced it in many instances - planning their trips to wine regions and booking tastings before their departure. This provides the winery with a stream of income and also the opportunity to resource up based on the level of bookings they receive. Consequently, wineries have removed the wastage associated with free tastings (including the WET implications that still need to be paid) and also reduced staffing costs as they can plan their staffing requirements more accurately.

Some feedback given by our clients is thatthey never want to go back to free tastingsand as most tastings are seated and the CD staff focus on the customer and the tasting experience, this results in not only increased sales and basket sizes but also increases in the number of club sign ups and satisfied customers who may well spend more in the future.

Free shipping created increased sales orders

vinCreative customers wine club sales also have increased as did the average basket size across all sales channels by offering free shipping over a certain $ amount on their website.

Customers will naturally spend a little more to avoid shipping fees and there is a sweet spot for most wineries of around $150 for free shipping (but it depends on the winery and their price point in the market). We saw it explode with Australia Post having a record year and wine specific providers such as Wine Depot and WDA recording enormous growth month on month and this continues into 2021. Purchasing products online whether it be wine or any other goods or services have proven to be a simple step for many and is rapidly becoming a normal part of people's buying habits replacing more traditional shopping habits.

Most importantly wineries with great websites that are easy to navigate that involve a simple process to purchase their wines have benefited most from increased sales. Many websites focus too much on pretty images and branding (which is perfectly OK) that they often forget how to utilise their websites as a business tool. The website should be your best salesperson which operates for you 24/7. To sum up, it needs to provide good information but never lose sight of the reason you have a website, that is to make money!

When did you last try to buy wine on your own website?

Most winery owners would most likely say never, why would they need to...well you may well be surprised at how many websites make the process too hard by putting up sales barriers instead of focusing on the end goal $$’s!

You should be able to purchase wine in 3-4 clicks and when you have products in your cart you should be able to change them and alter quantities and not have to go back to the shop as that puts people off. You should also be able to see (on the checkout page) whether shipping is payable or not, as that removes fear and buyers remorse. Negative messages in e-commerce are not acceptable and increase abandonment.

Improved retention in wine club customers

Wine Club sign-ups and retention, especially through the first few months of COVID-19 was challenging for many wineries as when hard times hit, people tend to cut the non-essential items first, and wine clubs were on many people's hit list. The keys to retention are choice and flexibility as well as empowerment. If you provide members with the ability to not only choose their club type but to switch clubs and change their selections and frequency they will most likely take the easy option which is to alter an existing club rather than go to the trouble of speaking directly to the winery in order to cancel.

Over 80% of vinCreative customers have wine clubs, 75% of those provide flexible user choice clubs.

Just some of the ways our customers have succeeded in retaining members include:

  • Offering an alternate club whether it be fewer bottles, reduced frequency or even switching to a less expensive club.
  • Offering the ability for the member to ‘suspend’ their club rather than cancelling. Cancelling the club is so final and it means that the customer would have to go through the process of signing up again, if you simply suspend them you can contact them at any point and simply reactivate their club and at that time you have the option to upsell, cross-sell or even down-sell if you need to keep them as members.
  • Skips, allow the member to skip 1 or more club orders. This way, you keep them in the loop with announcements and club news which keeps your brand top of mind.

Those wineries with manual club processes struggled during COVID as most were fielding calls from people asking to cancel and updating spreadsheets with new email addresses and delivery locations. Many were offering to suspend the club until further notice and many wineries were just losing customers on a daily basis as well as losing track of past club members as a result of inadequate systems.

vinCreative customers have access to the most flexible and powerfulwine club management softwareavailable and they were able to take advantage of this to retain customers.

The changes that 2020 brought due to COVID will improve the winery processes in the cellar door,website eCommerce salesand for wine clubs into the future.