REthink Wine Blog

“Everybody talks about the weather, but nobody does anything about it!”

                                                             — attributed to Mark Twain.

Wine shipping compliance is much the same way, with most wineries grumbling about whether it is worth taking on the hassles compliance can bring.  The question is whether they want to do anything about it.

Much noise is made about compliance issues in the wine business.  There is a tug-of-war in state legislatures debating direct shipment bills about what it means, how it should be accomplished, and in the minds of the opponents of such bills, whether wineries shipping into their state will stay compliant (see the recent battles in Maryland).  There is also a tug-of-war within individual wineries over the allocation of resources in tight economic times and whether attention should (or can) be given to compliance issues.  Compliance is rarely viewed as an opportunity opening doors to new markets and frequently viewed as a barrier to competing within those markets.  It’s considered confusing, time-consuming and boring (even I have to give a nod to that last one).  Until now.

In January we launched an updated version of our REthink Compliance web tool as a service to our IBG eCommerce clients at no addtional charge.  REthink Compliance provides complete consumer direct wine shipment compliance reporting and, as an integrated compliance solution with our REthink Engine technology, sales order compliance checks at the point of transaction.  All with quite literally a few clicks of your mouse.  The website is at www.rethinkcompliance.com and is newly redesigned with an attractive look and more topical information on wine compliance and shipping issues, including updates on changes to state law, agency contacts and resources for acquiring permits and licenses.

• Compliance Reports - Powered by eCompli, REthink Compliance will generate complete, accurate compliance reports using the sales data automatically passed from the REthink Engine directly to REthink Compliance.  No order file uploads required! Just login and view whichever reports you need.  Even reports for periods with zero activity are generated to make staying compliant in every state you ship easy.

• Compliance Checks - The new REthink Compliance also can check orders for compliance status at the point-of-transaction from the REthink Engine.  Check for permit status, volume limitations, dry areas, or prohibited states before you ship to ensure each shipment meets the requirements for each state.

For years I’ve said that compliance is important.  Many of the dramatic changes to direct shipping laws in the five years since Granholm are directly related to whether wineries are willing to follow the rules, report and pay state taxes, and stay compliant.  Doing so convinces non-shipping states to open their borders to direct shipments because it allays their fears of unauthorized shipments and unremitted taxes.  That opens new markets and creates new customer opportunities.  Now, IBG eCommerce clients have a new tool at no additional charge to solve their direct shipment compliance issues:  quickly, inexpensively and with minimal effort. 

Change the “whether” in handling compliance.  Contact your Account Manager to learn how easy it is to set up your account in REthink Compliance.

If you work in the wine industry, it’s likely you rely on a number of different technology and/or service providers to run your business efficiently;   ecommerce,  wine club, point of sale, CRM, email, compliance, fulfillment, accounting, sales and inventory management  to name a just a few.  It’s no secret that as an industry we’ve been slow to adopt certain new technologies, ecommerce in particular.  Aside from the obvious compliance challenges, when you look at that list it’s not difficult to understand why.   In some ways, eCommerce for wine can be viewed as what is referred to in the business world as a “discontinuous innovation”.  In other words, it requires you to modify some of the other technologies that you rely on.  Frankly, it’s not easy to make all of these products work well together.  Innovation is a good thing until it begins to impose new day-to-day challenges upon us. To compound the problem, the costs and risk associated with making different software solutions work together often fall to you.

Integrations of disparate technology solutions can be problematic for a number of reasons:

• They’re costly in terms of both monthly service fees and integration costs
• It’s often difficult for employees to learn all of the intricacies of each new technology
• Issues with data integrity and error handling frequently arise
• There is often confusion over who to call when things go wrong
• Due to the sheer number of solutions on the market today, it’s difficult for any vendor to integrate with each of them 

Benefits of an Integrated Package:

A full suite of direct sales tools can provide the answer to a number of these challenges by offering solutions which expedite your time to market and result in cost and administrative efficiencies which allow you to focus on your business.  What’s more, it results in a partner who’s in a better position to share responsibility for the success of your direct sales efforts.

This holistic approach to direct sales has a number of advantages:

• You  gain a service provider with the skills necessary to manage the full lifecycle of your technology, including roadmap development
• A stronger partnership leads to a better understanding of your needs, which allows your technology partner to drive innovation and value
• A single data repository will more accurately reflect your customer interactions and touch points
• You avoid the “Not our problem, talk to the other guys” phone call.  Instead, you have a single point of contact across product lines

These are just a few of the reasons I find what we’re doing at IBG so exciting.  For one, we’re providing a means for you to lower your cost of ownership just when competitive dynamics in the wine industry have necessitated it.  Even more exciting though, is this:  by owning the primary pieces of the puzzle, we’re in a position to build a better product.  Tighter integrations result in better visibility and better customer management.

At the same time, we recognize that customers often have existing systems or relationships in place which they would prefer not to disrupt, and that the “best of all worlds” implies choice.  This is why we believe in fostering strong industry partnerships and working with our clients to develop a solution that meets their needs.  The adoption of one technology should not necessarily mean that by default you are locked into another that might not suit your needs.  Our fulfillment and ecommerce products are compatible with numerous applications, from POS and ecommerce to fulfillment.

“The art of simplicity is a puzzle of complexity.” Douglas Horton

As we all look to beef up our online presence these days, especially on behalf of the companies we work for, I have noted a couple of trends. Everyone seems like they have advice on whether or not you should join Facebook, get a Twitter account, start your own blog, or broadcast live on YouTube. Well, here I am to tell you - just listen to your mother.

“If everyone jumped off a cliff, would you do it too?”
Ok, so everyone else may be joining social media sites to help promote their online presence, but that doesn’t mean you HAVE to. Do what feels right. You have to approach everything you do with a level of commitment and enthusiasm. If you don’t have these attributes when it comes to social media, you may just want to stop reading here, because this may not be the right medium for you or your business.
“One mistake I often see when people use Twitter is that they approach it without a real interest in or passion for the service.” via @SorenG

You never get a second chance to make a first impression.
Back to my first point - you have to want it. Commit to where you want to spend your time online. If you don’t have a lot of time - pick one social media outlet and carefully approach it – you know, baby steps. Don’t come out too strong in an environment you may not understand. Try creating a personal twitter account before you launch one for the brand you are working with. Get used to using tools like TweetDeck to help you navigate your contacts and manage several accounts. We live in such a fast-paced environment these days, people are quick to judge you and then move on so make sure your entry into the world of social media is strategic.

“Don’t sit so close to the TV or you’ll go blind.”
Sometimes it takes a little stepping back to see the big picture. Think about what you are trying to gain from social media. Are you trying to network? Drive traffic to your website? Encourage more online sales? Discover more potential business partners in your field?
It may be best to determine just what your own identity is, build your sense of your own brand and determine what your goals are before you outline just how you set out to accomplish these through social networking.

“Money does not grow on trees.”
I think what mom was trying to tell us is nothing comes easy. You can’t expect to convert twice as many sales next month just because you posted a video on YouTube or sent out a few tweets. If you are expecting to see immediate monetary gains from online activity, you may want to hold your horses! (Another mom-ism right there) Especially in our current economy I wouldn’t plan seeing the money flowing in to your online store right off the bat, but don’t give up! You can gain more from social media than just profit. Beware of marketers who tell you it’s all about selling wine – try focusing on building your brand first.

“If you don’t have anything nice to say, don’t say anything at all.”
The most important thing to remember is to play nice. You should always maintain a certain level of tact while blasting things out online. Just because you have the ability to update your status every 3 seconds doesn’t mean you should. You don’t have to resort to only speaking when spoken to, just think about what you are saying - is it helpful or are you just trying to fill dead space? Recommending things to others or giving people props for cool new ideas will only get you further in this brave new online world.

And finally – If you keep making that face it’s going to freeze in like that!

How do you set yourself apart in a relatively saturated and extremely competitive market? You need to capitalize on every opportunity to strengthen your relationship with your existing customers. While identifying ways to continue to reach new audiences and find ways to acquire new customers, you always need to be finding new and exciting ways to engage with your current customers.

Far too often, the focus on new business trumps the efforts to continuously build upon the current relationships that you have.  Your most valuable prospect is the customer who has already purchased.  By developing key tactics to engage and introduce new opportunities to your existing customer base, you will find their willingness to repurchase and step closer to that “Brand Ambassador” role.

Listed below are a couple things you can do that are relatively easy but go a far way in continuing the experience and strengthening the relationship.

1. Always Follow Up! Follow up with customers within 30 days after they have purchased and ensure the product was great and the purchasing experience was exceptional. If there was a problem with the shipment, correct it.  If you had not reached out, you potentially would have never known about the issue and you could have lost that customer.  This is an opportunity to ensure everything went well and if it didn’t, make it right.
2. Send birthday wishes!  My inbox is full of companies trying to sell me something and rarely ever does the email subject catch my eye.  However, on my birthday, if I get a message saying, “Happy Birthday Stephen”, you can bet your bottom dollar, I am going to open that message and read the entire thing.  It is a way to make sure your customers know how important they are to you.  Regardless of your size, this is something that is relatively easy to do and goes a long way in further strengthening your relationship with that customer. 
3. Make it personal.  In your marketing outreaches, segment your customer database and ensure a personal and meaningful message is coming across.  For example, emailing your customers in Sonoma and reminding them that your upcoming event is only 20 minutes away is a much different message then blasting your entire database and creating a generic event reminder that lacks the personal touch you would offer in a personal interaction.  Perhaps the subject line could even say, Our Wine and Food pairing is only 20 minutes away from your home! Ensure your marketing messages are personal and focused on the customer.  This is definitely a key way to stand out from the rest. 

Focusing on Customer Service and using new creative methods to increase the life time value of your existing customers is a strategy that will always yield significant returns.  Find ways to reach and service your customers that are valuable to them and you will find a customer base willing to purchase more and spread your story!

If you think you’ve been noticing more and more animals on wine labels over the past several years, it’s not just your imagination. According to a study by market research firm ACNielsen, approximately one out of every five table wine brands introduced features an animal on the label. Traditionally, a logo or label with direct relevance to the product it represents has been emphasized as a key to success. For wineries, this would generally be grapes or a vineyard. In spite of this established practice, wine labels with animals have been warmly received, and even demonstrate an increase in sales. Danny Brager, VP of ACNielsen’s Beverage Alcohol Team, states that the sales generated by new brands featuring a ‘critter’ outperform other new table wines by more than double.

One theory suggests that an animal label has a unique presentation that differentiates it from more traditional label styles. This may help to distinguish it on retail shelves drawing the attention of new consumers.

A second theory of this trend explains that consumers have an easier time relating to images which they have already been primed to. The imagery is already familiar to the consumer and may have other meaning in their personal lives as well.

Earlier this year Peter Renton, founder of Lightning Labels, further explored this idea noting a study by Professor Aparna Labro (University of Chicago Booth School of Business), Ravi Dhar (Yale University) and Norbert Schwartz (University of Michigan). According to their research, consumers tend to purchase products which reflect themselves rather than the product.

Below are a few examples showcasing labels which have interesting and unique animal designs.

Nebraska Table Wine

A partnership between Lincoln Children’s Zoo and James Arthur Vineyard, these clever labels highlight animals within the zoo and include catchy names such as Pokey Red and Snappy White (shown above). Nebraska Table Wine was awarded in Commart’s 2008 Design Annual for its crisp packaging design.

www.jamesarthurvineyards.com
www.commarts.com

Mutt Lynch Winery

Supporting a long list of nonprofit animal rescue shelters and organizations, Mutt Lynch Winery stands out for both its community leadership and award winning wines. Each bottle design has its own unique, individual flair. Featured above are Merlot Over and Play Dead, Unleashed Chardonnay and Portrait of a Mutt Zinfandel.

www.muttlynchwinery.com

PengWine

Offering delectable wines sourced from Chile’s Maipo Valley, PengWine dedicates its brand and label designs to Chile’s regional bird - the penguin. Each bottle illustrates a specific type of of penguin and is even tied to a PengWine persona which provides a brief summary of the bird and wine characteristics. Shown above are Humboldt, Royal and Rockhopper.
www.pengwine.com

I’ve noticed lately that one of the easiest, most important (and relatively inexpensive) customer service techniques often goes over-looked. In our ever-evolving world of technology, it’s easy to increase automation for improved efficiency. However, one unintended result is that we sometimes end up forgetting our manners.

Just as important in today’s economy as it was when we first learned proper etiquette, is taking the time to properly thank your customers. I think every business owner can remember their first sale. The excitement, the enticement of endless possibility and most importantly - the gratitude. Why should subsequent sales be any less important?

Properly thanking your customers can mean many different things. Do you have an automated email thank you for online orders? What does it say? Does it sound automated? Consider adding a personal touch to your automated responses so that customers know you are paying attention. Add an invitation to an upcoming event since they purchased from you this month. Let them know of next month’s annual cellar sale. Keep it updated often and don’t let it get stale. Good customer service is a key differentiator between you and your competition. Automated “thank you’s” like “Your transaction has been processed.” or “Thank You.” don’t help your customers remember you. Going the extra mile will. What else do you do to say thanks? In addition to a warm and friendly thank you email, also consider calling customers at random to personally thank them, or slipping a hand-written thank you note into some out-going shipments. Even if you don’t have the budget or man-power to do this for every single customer, doing it sporadically will make a difference for that one individual - it’s like winning the customer service lottery for the day.

A proper thank you goes a long way – it is common courtesy and makes a customer more likely to return once you’ve shown you truly appreciate their business. Positive brand recognition and word of mouth referrals are the strongest advertisement you can get. Set the bar high for customer service and you can’t go wrong. Your customers will take note, and your competition will too.

1.  Start planning your holiday newsletter timeline and assemble newsletters now while you have time.
2.   Be sure to test your newsletters. Create (free) email addresses for yourself in hotmail, gmail, and yahoo and send tests to each of these addresses. Send copies to a few coworkers (or friends) and ask them to look for typos and confirm that all links are working as they should.
3.  Do not overuse punctuation. Excessive exclamation points are spam-like and will cause your newsletter to get caught in the Spam filter.
4.  Avoid using ‘free,’ use ‘complimentary’ instead
5.  Be careful with special html characters as most of these do not render well in email applications.
6.  Consider adding the following to your newsletter, at or near the top of the page “Please add emailaddress@winery.com to your email address book to ensure our emails go to your inbox.”

Research email deliverability, content and/or subject lines. You’ll find a wealth of information.

Vertical Response Suggestions

• Book now - 10 dates left for holiday parties
• Wine clubs: The gift that gives all year long
• Trio of wine under $50 with gift pack and card
• 40% holiday discount for wine club members
• Discounts for Wine club members
• 2005 Cab with our gift of Riedel wine glasses

Vertical Response, Creating Subject Lines

Get started now so you and your holiday newsletters are ready before the holiday rush is here.

Cheers,

Over the many, many years of using a Windows based PC’s, I and almost all Windows users have run across computer infections that involve what is known as “Spyware” or “Malware”, and various other malicous Trojans and Worms. None are beneficial, nor keep your data or computer secure or allow you to surf the web without some type of security compromise. All of them will give you a headache if not caught in time.

I am to understand over 80% of all Windows based computers are infected unbeknownst to the users, until they either stop working or come to a slow grinding halt. This may be a high estimate but not from my actual experience with assisting others with their Windows based PC’s.

Spyware is software that resides on a computer and sends your personal data to its creator. The data may include surfing habits, system details or, in its most dangerous form, passwords and login data for secure applications such as online banking. Many 
spyware programs  are more annoying than dangerous, serving up pop-up ads or gathering email addresses for use in spam campaigns. Even those programs, however, can cost you valuable time and computing resources.

Often, spyware comes along with a free software application, such as a game or a productivity program, such as connection boosters or free screensaver. Once it is installed onto your computer, the functional element of the software works exactly as promised, while the information gathering program sets up shop behind the scenes on your computer and begins feeding your personal data back to the bad guys.

To protect yourself from such nefarious software, install and maintain some type of Spyware prevention and removal application that you must keep up to date and run on a regular basis.

I have found over the years that these 3 FREE applications, not only run very well together but also do a very good job either blocking such spyware or removing the infection entirely. You should NEVER install more than one current Anti-Virus program but with Spyware and Malware, more can be better and these 3 are the best. My own past experience proves it.

Ad-Aware - http://www.lavasoft.com/
Spybot-Search & Destroy - http://www.safer-networking.org/en/index.html
Malwarebytes’ Anti-Malware - http://www.malwarebytes.org/mbam.php

Once you have reviewed the above sites, download and installed these 3 applications. You will need to keep up on the almost daily updates and RUN the applications on a regular basis, installing and not updating or not running them is a waste of your time and hard drive space. You must  take the medicine if you want your PC get better!

As this is the remedy, what about prevention?

Avoiding Spyware

• When it comes to spyware, the best defense is a great offense. Practicing the below step to avoid getting spyware on your computer in the first place helps prevent you from becoming a victim.
• Keep Windows up-to-date by setting up automatic updates in the control panel. Microsoft issues critical updates at every second Tuesday of each month. Many of those are designed to eliminate or avoid specific security threats.
• Never open an email attachment if you are uncertain of its source.
• Install an anti-virus software package and keep it updated at all times. There are many of these available, some of which are free. The most popular brands include Norton, McAfee, and AVG by Grisoft.
• Don’t download shareware (or anything else for that matter) from unknown sources. Seek out reliable providers of free utilities, such as download.com.
• Avoid questionable web sites. If you visit a site that seems strange, there is a good chance you should not be there.
• Don’t click on any pop-up or ads for free anti-spyware software. These are almost always bogus, even if they carry the name and logo of a well-known company. Sadly, this is a very popular method used to distribute spyware and other malware.
• Install a firewall and, if you have a home network, use a separate router, rather than sharing the Internet connection through one of your computers. This puts one more barrier between you and the bad guys. Windows XP and Vista come with a firewall, so no extra cost here.
• If a virus alert appears on your screen as you visit a web site, do not click on it, even to close it. Instead, type control-alt-delete to launch the Task Manager and use the “End Task” command to close the window. Next, use your own anti-virus software to run a complete scan of the system.

All of this is by no means instructions on how to install and safeguard your computer from viruses, spyware, and malware, more to make you aware of what is out there, to either look into it more and make an informed decision, or seek professional assistance for the solution that best serves your needs.

I moved to wine country from South Florida in 2002, yet I’m still very much aware of the official start of hurricane season each year.  Although it technically runs from June 1st through November 30th, the majority of named storms tend to hit a little later in the season, beginning in September or so.  And each year, as activity starts picking up in the Atlantic, I’m reminded of the many hours spent preparing for tropical storms or hurricanes, storms that in many (if not most) cases take last minute turns and hit other (hopefully less populated) areas.  Preparing for a hurricane is a monumental task; shuttering your home, preparing your place of business, stocking up on supplies, and on and on.  Not surprisingly, after a number of false alarms people often become complacent.  And standing beneath beautiful blue skies, braving the Florida heat and humidity while waiting in line to fill the car with gas, it’s not difficult to understand why.  But reality always prevails and history, in the form of storms such as Andrew or Katrina, reminds us just how real the possibility is.
 
What do hurricanes have to do with wine sales?  That analogy, in some ways, reminds me of the many stops and starts we’ve endured in the wine industry over the last several years.  When I first became involved in the industry in 2002, excitement was just starting to build around the potential of Internet marketing and direct to consumer sales.  In fact, I believe that predictions at the time put DTC at somewhere between 5% and 10% of total wine sales by 2003.  Since that time we’ve seen many companies try to navigate the myriad of regulations that each of us deal with on a daily basis.  A few have succeeded.  Many have not.  Yet once again excitement is building around the direct channel.   Is it time to start preparing for the hurricane or are we just in for more of the same?  What is different about 2009?

In 1991, Geoffrey A. Moore wrote the book “Crossing the Chasm”.  While it focused on the specifics of marketing high tech products to mainstream customers, I think the principle itself is very relevant to the market for wine online.  Moore postured that a chasm exists between the early adopters of a product (the visionaries) and the early majority (the pragmatists).  Moreover, he argued that these two groups have very different needs and expectations, meaning that you shouldn’t try to market to them in the same ways.  Visionaries like being ahead of the curve and will seek out the new and exciting, whereas the early majority rely more on recommendations and word of mouth. 

Who really buys wine online?  It’s heavy.  It’s expensive to ship.  And it’s not always easy to get across state borders.  Why would I go online, pay a premium for shipping, and wait a week or more for my wine when I can walk to the nearest Safeway, purchase a bottle, and open it that evening?  Where do we stand in terms of the lifecycle for online wine sales and which group should we be marketing to?  I believe it’s the innovators and early adopters.  They’re the visionaries who enjoy being out in front and searching out superior products which are not broadly available.  This is the group who will go on to become viral marketers and evangelists as we try to gain broad appeal.  The current challenge for the industry as a whole is in pairing innovation with demand to successfully cross the chasm, finally landing in a marketplace where the mainstream can confidently place an order for a bottle of wine and know that 1) the product is exceptional (having been recommended by an early adopter), 2) the sale is entirely legal, and 3) the product will arrive in a reasonable amount of time and in perfect condition.  So what is different this time around, and why should we believe that direct to consumer wine sales might finally be entering the mainstream?  I think there are three signals:

1. It’s been a gradual shift but since those early days we’ve seen many regulatory changes, most of which were precipitated by Granholm v. Heald.  In 2002 direct sales by out of state wineries were banned in at least half of the US states including states such as New York and Florida.  Today, wineries can access 36 states.
2. Wine has gained the attention of some of the major Internet players.  There may be nuances and regulatory hurdles, but the end game remains the same.  Today’s landscape is attractive and they are ready to participate.  The question now is not whether or not a top retailer will enter the market, but rather who will be first. 
3. New technologies make it easy for innovators and early adopters to influence the early majority, a key in crossing into the mainstream.  Using innovations which unite wineries (complete with their product detail, order processing systems, compliance safeguards, and customer management capabilities) with new customers, sophisticated Marketing Agents can market wines and present customer recommendations and reviews to their own loyal customers.

Going back to hurricane season, the forecast has changed dramatically since 2002.  It’s quite possible that what we’re experiencing right now truly is the calm before the storm.  What can you do to prepare?  To quote another book, “Purple Cow” by Seth Godin: you can “be remarkable”.  Remarkable begins, obviously, with your product.  But it extends far beyond that, to your branding, your content, and your customer service.   Think of who you are, where you’ve been, and what it is that makes you stand out from the crowd.  Put serious thought and effort into your product content.  And don’t be afraid to hire marketing and/or copywriting help if need be.  It just may be one of the savviest investments you can make right now. 

By issuing a circular on July 22nd requiring Virginia direct shipper licensees to take orders and ship wine only from their own facilities using only their own employees, Virginia ABC fired a warning shot at direct shippers who were not reporting their shipments in a manner compliant with state requirements.  But stay calm, my guess is this rather extreme dictate will soften once reality comes back to the forefront.

Look at the situation.  Virginia’s direct shipment statute requires shipper licensees to ship to consumers using approved common carriers and to report to the ABC the carrier used.  Certainly not unreasonable, since tracking shipments seems a legitimate way to monitor illegal shipments into the Commonwealth.  Many wineries, particularly large ones in California, use third party logistics companies (3PL’s) to stage and fulfill both daily and wine club orders.  They are legitimate businesses providing a service more efficiently than wineries could do it themselves.  Even the recent California ABC advisory made it clear that such businesses operate legally.  While these 3PL’s provide reporting information to their winery clients, I’m guessing that some wineries were not properly reporting carrier information because they didn’t have it in front of them at the time the reports were due and Virginia ABC got tired of trying to follow up to get the information.

There are many legal issues involved, including the real possibility that the Virginia governing statute violates the Commerce Clause.  In Healy v. The Beer Institute (1989) the Supreme Court rejected the “extra-territorial” application of a Connecticut law that had the “effect of controlling commercial activity occurring wholly outside the boundary of the State” in violation of the Commerce Clause.  While certainly not a slam-dunk, you could make an argument that this application of Virginia’s law could be considered unconstitutional on the same grounds.

But aside from the legal considerations, the Virginia rule just doesn’t make good sense.  The obvious problem is that Virginia ABC’s response was to throw out the baby with the bath water.  Requiring all shipper licensees to ship from their own facilities will likely cause many wineries to simply not ship to Virginia.  It doesn’t make economic sense for wineries to change their entire shipping regime or carve out a more expensive exception to accommodate the requirements of one state, even the 9th largest consumption state.  There are no winners here.  Wineries lose customers, Virginia consumers lose access to many wines, and the Commonwealth of Virginia loses tax revenue at a time when most states can use all of the revenue they can get!

My hope and expectation is that Virginia will pull back from the requirements set out in the circular and recognize that wineries using 3PL’s are perfectly legitimate, as well as efficient, ways for wineries to get wine to Virginia consumers.  If not, it’s going to be a long, dry winter in the Commonwealth.