I will be sharing the results of a study we have been conducting at WineDirect over the past three years. This study looks at anonymous transaction data for DTC ecommerce orders processed on Vin65, the wine industry’s leading DTC technology platform.
35. Offline to Online, a case study
$2,500 in net new ecom sales
63% opened, 7.5% converted
89 emails captured and sent.
89 TR Transactions ($7500).
36. What’s the value of an action email…
TR Transactions/ Day 50
email Capture Rate 50%
Action email Sent 25
7.5% Conversion rate 1.875
AOV $318
Net New eCom Sales (day) $ 596.25
New Sales, Annualized $ 131,175.00
40. Shipping Incentives
58%
31%
Will add items to cart to qualify for free shipping.
Will join a loyalty program to qualify for free shipping.
Source: UPS Pulse of the Online Shopper
Report 2014
Today, I will be sharing the results of a study we have been conducting at WineDirect over the past three years. This study looks at anonymous transaction data for DTC ecommerce orders processed on Vin65, the wine industry’s leading DTC technology platform.
First, I will recap some of our key findings over the past three years, and take deeper look at the wineries that joined this elite group of wineries in 2015.
In preparation for today, we looked at over 6 million transactions, across 1000 wineries from all over the USA, Canada and Australia.
During this period, those 1,000 wineries sold over $1B in wine DTC.
So, its safe to say we have a really large sample size, and we believe the observations we have made are applicable to all wineries selling DTC.
89% of winery ecommerce business is done by just 20% of wineries.
To put that into perspective, if this room represented all wineries selling DTC, these ten people in the front row would be making nearly all the sales to consumers online.
So when you have a group of roughly 200 wineries that are far out performing the rest it begs the question….
What are they doing to sell so much wine online? And of course….
Do they have an unfair advantage?
So we dug into the data to figure out, what is so special about the top 20% that allows the to sell so much more than everyone else.
We looked at case production, and Small, Medium and Large wineries are equally represented in the top 20% and bottom 80% group.
We looked at location. It wasn’t that there are wineries from three countries, and states such as TX, FL and VA in the top 20%.
We also looked at Scores, and Bottle Price, and there was no correlation on any of these factors. Even the demographic profile of the wineries in the top and bottom group were exactly the same…
MAYBE ADD PIE CHARTS FOR DEMO DATA
So what does the data tell us? There were a few areas where the top 20% really stood apart from other wineries.
Number one, the wineries in the top 20% have an email list size that is 4x larger than those in the bottom 80%.
The average email list size of a winery in the top 20% is close to 20,000, and growing at a faster pace as well.
The Second key finding: Wineries in the top 20% have an average order value that is $100 more than the wineries in the bottom 80%. Last year at this conference we shared three strategies for increasing AOV, and if you are interested in that topic that presentation is available on the WD website.
And three: the Wineries in the top 20% are charging 50% less for shipping than those in the bottom 80%.
More than any other factors, these are the three things that really differentiate the wineries that are doing nearly all the DTC ecommerce sales, from the pack.
The take away here is: it doesn’t matter where your winery is located. Wineries in TX, FL, Canada, and all over CA are represented in the top 20%.
It doesn’t matter if you’re big or small, have a high, medium or low bottle price.
More than anything the data shows us is you must cultivate a large email list, you must take actions to drive AOV up, and you must have a sensible shipping policy.
In short, the data tells anyone can succeed at selling more wine online, and execution is everything.
So, even after that uplifting message of hope, you may be thinking is really possible to join the top 20% of wineries that are selling 89% of all wine online?
Of course the answer is yes.
In fact, just last year, on the Vin65 platform 46 Wineries busted into the top 20% by more than doubling their ecommerce sales 2014 vs 2015, .
Those 46 wineries increases their ecom sales 130% or more,
So I want to spend a few minutes talking about that group, and share some insight around how those 46 wineries doubled their ecom business in 2015.
How did they do it? Well, I surveyed the wineries who jumped into the top 20% and this is what I found out.
What do I mean by user experience? I mean creating a customized, remarkable and pleasant interaction with your consumers.
Here’s a good example:
He’s going to choose Virgin for his next train journey – and will probably be a customer for life.
Now in the context of growing your ecommerce here are a few key examples of how you can improve your user experience.
All 46 of the wineries that entered the top 20% are using Responsive design. Responsive design is a technology which allows your site to render perfectly, no matter what device your customer is using to access your store.
This has never been more important for a few reasons.
More and more purchases are made on mobile devices. This image shows how mobile devices, in red, are making up a greater portion of online transactions. It just not acceptable to have a site that requires your customer to pinch and zoom to shop.
In 2015 there was a panic among designers and some business as Google has started to down-rank sites that are not mobile ready. Think about that, your site is not optimized for mobile your business may fall of the first page of Google.
Here is another piece of data that shows the importance of have a mobile ready store, 65% of emails are now opened on a smartphone or tablet. So imagine for a moment, you send a beautifully crafted email offer, and your customer can’t act on it because your site is not mobile ready.
DO NOT FORCE CUSTOMERS TO CREATE AN ACCOUNT. I find it funny how many wine websites make you sign up for an account.
Think about it his way – someone walks into your tasting room, grabs a couple of bottles and heads to the till. They give you their credit card. The leave. SIMPLE.
When the same person goes online to buy wine online you make it difficult for them. They have to create an account, they have to remember another user name and password.
WHY? You let people just walk out of your tasting room without asking any information – so why demand information to buy wine online?
How many wine labels are in the US today? What makes your wine better than your neighbor? Well – actually, usually it’s the experience. Experience is the only differentiator in an infinite choice of wines.
Upon checkout a customer needs to immediately – within a minute or two – receive an order confirmation message.
Within 3-4hrs the customer should receive a message that their order has shipped and get a tracking #. NOT ONE OR TWO DAYS>
Let customers know what day their package is going to be delivered on – so they can be home to sign for it.
We are also experimenting with emailing customers delivery exception emails. If they aren’t home to sign for their wine – they receive an email.
Keeping in contact with your customers keep them in the know and get them assured you’re taking care of them,
Use tracking emails to sell more
SMS messaging can be used in several ways – text out promotional codes, send out order updates, etc.
This is a great revenue driving example at a concert.
How did they do it? Well I asked them?
So its possible you are already on Vin65 and you have the last two items taken care of. The third and final tactic that was used by wineries to double ecom sales n 2015 was using Offline activity to Drive Online activity.
That simply means, sending an email to your customers after every face-to-face interaction.
By implementing an automated follow up to customers that simply says, thanks for visiting us why don’t you visit our online store to rate your wines, see some exclusive offers, really anything.
You can double the amount of wine you are selling online.
Here is a quick real life example of how this works:
This is a real example from a Vin65 winery customer in Canada. On this day the TR staff member sold $7,500, to 89 unique customers.
The staff member collected 89 emails that day, simply by requesting an email so they could send the receipt.
3X typical open rate.
Here is another example of a winery that boosted their email capture rate to 50%, and by simply collecting 25 email addresses a day they added over $100,000 in net new ecommerce revenue. Just by sending a simple follow up email.
If you have any hesitancy around enforcing an email receipt policy for your customers, consider this. In the recent UPS Pulse of the customer survey 41% of respondents stated email receipts are an appealing enhancement to the retail experience. SO not only is it not an inconvenience, but any consumer think it is an upgrade to receive an email receipt.
So its possible you are already on Vin65 and you have the last two items taken care of. The third and final tactic that was used by wineries to double ecom sales n 2015 was using Offline activity to Drive Online activity.
That simply means, sending an email to your customers after every face-to-face interaction.
In UPS’s recent Pulse of the Consumer Report, a comprehensive study of consumer preferences. 93% of respondents reported that they will take action to qualify for free shipping. Wow.
And if you drill down into that 93%, 58% say they will add products to qualify for free shipping. Boom there’s your extra Order value right there.
Also, almost one third of consumers say they will join a Loyalty program to qualify for free shipping, we’ll come back to that topic in a moment.
First off, I know Free is a dirty word and we should call It “shipping included,” or one cent shipping, etc., but for the sake of this discussion among responsible wine direct marketers I’m using the word free.
A year ago we, at the Direct to Consumer Symposium, we launched 46 Brix, which is a loyalty program available to wineries using Vin65 which offers shipping included to consumers for $79/ year, we didn’t know what to expect and it was a chance to really test our theories about boosting DTC sales. I get asked all the time, does it work, do people actually buy more wine..
Yup. These results are typical for a winery participating in 46BRix. Consumers spend nearly four times more after joining 46Brix, and we know of a few other “prepaid shipping” programs out there and the results have all been similar.
And if you really want to join the ranks of the leaders in DTC wine ecommerce, take action to improve in one or all of these areas in 2016.
So WineDirect | Vin65 provides modern ecommerce and fulfillment services that you cannot get anywhere else, and our solutions are purpose built to help you sell more wine. We have a great group from WineDirect here today and tomorrow. Come on by to see us to learn more about how we can help you thrill you customers in 2016.