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Archive for the 'Wine Industry' Category

The Online Market for Wine

Friday, September 19th, 2008

The recent news that Amazon is looking to get into the wine retailing game broke like a wave a few days ago. What the impact of the multi-billion dollar company coming into the online wine selling market will be can’t be said at this point. And there is also great deal of speculation of exactly how they are going about doing business online with wine.

But this isn’t what was truly interesting about all the press on Amazon’s wine program. Down deep in these stories was an estimate by Barbara Insel of Stonebridge Research on the size of the e-commerce market for wine. Insel, one of the top analysts and business consultants in the wine industry, estimated for the reporter that $2.8 billion of America’s $30 Billion retail wine market comes in the form of direct sales. Although the article didn’t mention this fact, that $2.8 Billion is only winery-direct sales and does not include online wine merchants.

Also interesting was Insel’s estimate that seven percent, or roughly $200,000,000, of that $2.8 billion in direct sales occurs exclusively online. It’s not winery club sales. It’s not tasting room sales. It’s pure online transactions from winery to consumers. We think this is significant because it demonstrates just how large the upside is for savvy wineries looking to increase their sales. There is clearly a lot of room to increase the 7% to something more. It’s likely that this percentage will increase over time in an organic fashion. But for individual wineries that are hovering around that 7% figure with their own sales, they can find a way to increase it substantially through strategic online marketing and prospecting for qualified customers in every venue they offer their wines.

The fastest way, however, to increase your pure online sales is to talk more frequently to the customers in your data base. Consider your email marketing program, for instance. Are you leveraging your communications as best as you should be? Consider a few of Angela Sanchez’s Tips for Increased Email Conversion.

To get an indication of what it would mean to increase your online sales from 7% to 10%, imagine allocating three percent of your volume sales that had been sold to wholesalers, and selling it instead direct to the consumer. Amazon will have some sort of impact on overall online wine sales. But you can impact your own bottom line right now by shooting for an immediate 3% increase in direct sales through strategic e-commerce marketing.

 

Kristi Taaffe,

Posted in General, E-commerce, Marketing, Wine Industry

Direct-To-Trade is about Access

Monday, August 4th, 2008

You may have heard this already: Inertia is pioneering the enablement of wine producers to reach trade buyers directly, in an easy, efficient and fully compliant online fashion. As we ramp up our efforts to empower more wineries to sell more wine Direct-To-Trade, I want to take a closer look at the big-picture question of why direct trade sales must inexorably grow.

By now, the message is clear: the American system of wine economics is rapidly mutating. Not only have consumer habits made wine a much more popular consumer good and increased demand and supply, ongoing regulatory changes have made the marketing and distribution of wine a much more creative and competitive sport.

Innovation arises when things stop working. In our industry, innovation needs to answer many a winery’s dilemma: “I can’t find a distributor who’ll carry my wine; how can I get it to market?”. Whatever the answer may be, it also needs to answer the challenges facing wine buyers: “How can I buy this rare gem if none of my distributors carry it?”

The situation is familiar:
> There are more and more wine products hitting the market (both foreign and domestic).
> There are fewer and fewer distributors as they rapidly consolidate.
> Warehouses are full of inventory that is slow to move.
> Margins are rapidly being eroded by rising fuel costs.
> Traditional distribution systems have less incentive to build brands.

The American 3-tier system has been tremendously successful and continues to be. Yet it is currently not capable of efficiently absorbing all the new-comers to the market. A small number of brands represents a huge portion of what is actually consumed today and it is the 3-tier system that makes this possible. But how can smaller, high-end, boutique brands catch the attention of giants? How can a 10,000-case winery, making stellar wine (though not yet blessed with a sacred 94point rating), possibly catch the attention of large, bottom-line focused, distributors? Fortunately, many still do for the benefit of the consumer; but not all.

As Angela remarked in her recent post: there is distribution and then there is effective distribution. This is my central argument: going direct is about filling the gaps of the 3-tier system. Wine producers need to ask of their distributor: “are you the most effective way to get my wine to market?”. Most often, the answer is a resounding “Yes!” , but in certain situations or for certain brands, the 3-tier system will not work. Here is a short list of situations many wineries will recognize:

> I have a restaurant in Florida who wants my wine, but I can’t get a distributor to carry me because it’s not enough volume.
> My distributor in New-York does not service up-state, how can I get my wine to a buyer in Rochester?
> I have a retailer who really wants my Syrah, but my distributor only carries my Cabernet and Merlot.

All these recognizable barriers to sell are about one thing: Access
- State access: getting to certain states
- Geographic access: reaching all areas of a state
- Product access: getting all your products in a state
- Buyer Access:making your products easily accessible to all potential buyers

So how can innovation help solve some of these issues? A minority of producers is currently selling directly to trade, but technology hasn’t been fully leveraged yet and the scope of current direct trade sales is still geographically narrow. While I will not go in the details of our ‘secret sauce’, Inertia’s DTT program enables bonded wineries to transact sales to these 12 states:

Arizona
California
Connecticut
District of Columbia
Florida
Illinois
Ohio
Oregon
New-York
Vermont
Washington
Wyoming

As Corey commented, these sates represents a huge swath of American wine consumption. If any one of the above states, or portions thereof, have been closed-off to you, or if your distribution in any of those states isn’t as effiective as it should be, then you should take a hard analytical look at the opportunities and implications of DTT.

Inertia’s DTT program will allow wineries to transact sales from trade buyers in any of the above states (or a sub-set for 17/20s and importers). Inertia’s DTT program allows you to pick what you want to sell, where you want to sell it and whom you wish to sell it to, in a fully-streamlined way, all on-line. DTT also implies minimal over-head that frees up staff resources (that would otherwise be spent on order management, invoicing, collections, etc.) to do what is most important: selling.

Access is the first and most obvious reason for going Direct. This is why DTT can be an incremental distribution channel, supplementing the 3-tier system if and where it is not efficient.

Upcoming posts will shed more light on the other two compelling reasons for going Direct-to-Trade: Control and Sales.
Stay tuned.

Pascal Davis, Director Marketplace Development

Posted in General, Direct 2.0, B2B, Wine Industry

The Results are In!

Friday, June 20th, 2008

Inertia’s 5th Annual Direct Symposium will take place on July 11th, from 9-3:30pm at COPIA in Napa. This year, we’ve expanded our agenda to include interactive sessions on topics chosen by attendees. Last month, we released a survey on what we were hearing from our clients and industry partners as the ‘hottest’ topics in the direct industry. Topics included:

  • Website Design
  • Website Merchandising
  • Selling Direct to Trade 
  • Direct Shipping Compliance
  • Allocation Program Management 
  • Wine Club Management
  • Wine Blogging
  • Online Social Networks

We asked attendees to ‘vote’ on their topics of choice for breakout sessions at our July Symposium. The results were tallied, and we have our winners… 

  • Selling Direct to Trade: Access. Control. Sales. 
  • Direct Shipping Compliance: A Dynamic Marketplace. Your Options.
  • Wine Blogging: Brand Building, Customer Loyalty and Sales
  • Online Social Networks: Consumer- to-Consumer, Peer-to-Peer Engagement
  • Website Design: Designing for Best User Experience & Greatest Sales
  • Website MerchandisingSell More Online 

Our Symposium agenda will allow attendees to participate in two breakout sessions of their choice: One in the morning, one in the early afternoon. During each of these sessions, panelists will lead an interactive discussion with the audience around a designated topic. Based on several workshops which we led earlier in the year, we know our clients are eager to engage and look forward to some good interaction.

Because of limited space in each of our breakout sessions, we request that attendees reserve their spot in the session of their choice as soon as possible. Signups will be taken the day of the Symposium, at check in, but to ensure you get a seat in the topic of your choice, send your request through today (along with your RSVP if you haven’t already!) to rsvp@inertiabev.com.

See you in July!

Kristi Taaffe,

Posted in General, E-commerce, Marketing, Direct 2.0, B2B, Wine Industry, Compliance

2008 Allocation Seminar

Wednesday, June 11th, 2008

Yesterday Inertia hosted another successful seminar at Copia. The topic of the day was ”How to Build and manage a Successful Allocation Program“. The attendance, content, and reception by the audience, exceeded our expectations.

Over 30 wineries were represented in the audience, nearly all were not current clients of ours. This is the first open workshop which we have hosted specifically for non-clients. We regularly host workshops and webinars for our client base, but have recently begun to open the doors to the broader wine industry.  We plan top hold more of these open workshops on a regular basis (topics may include Web Site Sales Strategies, Wine Club Program Management, Selling Direct to Trade and Compliance Management, among others). Stay tuned.

The seminar started with Dan Chapin from Inertia reviewing the “3 Principles of a Successful Release Model“. Dan reviewed the need for any winery considering an allocation program to focus on Exclusivity, Creating a Perception of Scarcity and Conditioning of Purchase Behavior. For more information, or to receive a copy of his presentation, email us at sales@inertiabev.com.

Susan Moore from Aptalent, then spoke on “The Care and Feeding of your Mailing List“. Susan discussed ways to reach key consumers, how to grow your customer list, and how to maintain your engagement with those new customers to help build loyalty and longevity in their engagement with your winery. For more information, email susan@aptalent.com.

The next speaker was Jennie Haug from Revana Family Vineyards.  Jenny is an enthusiastic and engaging speaker. She brought a great case study of how Revana switched from a simple mailing list model, to an allocation model this past spring; they ran their very first allocation release this April.  Jenny told of the learnings Revana
gained from managing their first release, and provided the audience with some of the implications she’s now bringing to their next planned release. For more information, email jennie@revanawine.com.

Allocation Seminar_Revana

After Jenny, Barry Waite and Steve Gant from Vintrust led an engaging discussion on the importance of the packaging and presentation of any fine wine at the final stage in their path to the consumer. Most specifically, they addressed the different packaging options for shipping wine direct to the consumer, and how those packaging options are a part of the entire brand building process for any winery. The discussion generated several questions, and initiated good conversation.

Allocation Seminar_Vintrust1 Allocation seminar_Vintrust

The final speaker was Harry Parsley, owner of Silver Stag winery.  Harry has deep experience in the wine industry, starting with being the wine buyer for Lucky Stores, then President of Buena Vista, and now owning his own winery.  Harry gave great information to the group on how to manage your trade relations. He engaged the audience with his entertaining and informal discussion style - bringing years of experience in both buying and selling wines to the audience.

We look forward to bringing more of these seminars to the industry - and hope to see you there in the future!

Kristi Taaffe,

Posted in General, Marketing, Wine Industry

A recession good for wineries? You betcha!

Wednesday, June 4th, 2008

The rumors are flying - there is growing concern that we are entering a recession.  All indicators seem to point in that direction.  What does that mean for the wine industry?  Well, in general wine sales have slowed during recessions but people tend to enjoy wine when they are in good or bad times, they just tend to be more frugal.

But the ramifications and challenges are less related to consumption than they are to how the market deals with the plethora of brands.  What you have is that wholesalers are less likely to take chances and buy low velocity or unproven brands.  As a businessman I completely agree with their thought process.  Why tie my dollars up in inventory that I may not sell, takes extra effort to sell, or sells slower than other possible products.  Moreover, when they do take a position in a brand, they tend to take a far less aggressive purchasing approach.  Why buy two pallets instead of just one?

On the demand side of the equation the trade also is experiencing a similar approach.  Retailers are less likely to veer off the standard path of what sells and what sells fast and easy.  Restaurants on the other hand are in the situation of not wanting to purchase deeper inventory due to the slowdown in on-premise sales.  But remember, restaurants continue to proliferate in direct support of population growth and I know people don’t stop making babies during recessions.

Consumers are still buying wine, just trying to manage their pocket books better and buying less expensive wine on the frequency basis yet still saving a bit of money for that favorite winery or exploratory purchase.  Unfortunately also they are not traveling as much to wine country diminishing the tasting room as your core direct sales machine.  That doesn’t mean they don’t want your wine, they are just not traveling across states lines as frequently to get it (one side note, tasting room sales do not often decline during recessions because LOCAL residents not traveling out of state tend to visit local wine regions more frequently to get their fix - it doesn’t denote health of hospitality, just a shift in attendance).

It sound scary.  It sounds ominous.  But look deeper.

As a result of the “slow down” the amount of access to brands in any particular market becomes limited.  That does not change the fact that that there are still buyers - both trade and consumer - looking to buy their desired brands.  It just means that those brands may no longer have the same access to the markets.  Do you really think that just because the brand is not in the market and someone loves the wine that they are going to abandon purchasing it? Heck no! They will simply need to find another way to gain access to that brand!

Also, just because on-premise has slowed it does not mean that restaurants do not want a diverse wine list that matches their food, atmosphere, and personality.  But unfortunately the slow down means their access to these brands is now limited by the economics of the market.

So where is the good news?  It is very pure and simple.  Demand for your products still exists, but the strategy for getting them effectively into your desired markets does need to change – think DIRECT.   With a direct sales strategy, the consumer who can’t find your wine in the local market will search the internet and find themselves at your website or find a phone number to call you on the phone.

How do you ensure you’re available for that DIRECT contact? Consider the following: Are you staffing appropriately for your DIRECT program?  Do you have a good fulfillment strategy (like leveraging Wine Tasting Network’s bi-coastal operations) to help lower costs and incent people to buy direct?  Have you made sure to get maximum, cost-effective penetration through your direct shipping permits?  On the trade side, specifically for restaurants, selling direct to trade is new. However, in an economic slowdown, with a limited selection likely being offered by traditional means, they are more likely to go the extra effort to buy direct. Why? Because it allows them to continue in their efforts to create a unique Point of Difference through their selection, from the restaurant next door.

And for you, the winery, this is ALL good news.  It means that your direct channel gets more fuel from sales.  It means that you can possibly recapture margin.  It means that your customers now go into your database for creating long term relationships, thus stabilizing your brand.  Are your direct programs ready for the recession?

Paul Mabray, Chief Strategy Officer

Posted in General, Direct 2.0, B2B, Wine Industry

Free is Good

Monday, April 21st, 2008

As it appears we’re moving closer and closer to a recession, one interesting fact has come to light:  the Internet continues to be one of the few areas where many multi-channel retailers are experiencing sales growth.   According to an article by Internet Retailer this month, the web currently accounts for only 10% of The Talbots Inc’s sales but accounted for 68% of sales growth in 2007.  Likewise for many other merchants – Staples, Circuit City and the Gap are three examples cited in the article.  Another interesting statistic mentioned – online spending by households with higher incomes grew more rapidly than households with lower income (this is according to comScore, Inc.).  Year over year growth in the over $100,000 category was 28%, while those in the $50,000 to $100,000 category spent 17% more than the previous year.  This is a statistic which is not lost on the wine industry.  And given the fact that margins are clearly higher for direct sales, I think this year, more than ever before, is a perfect year to concentrate on increasing direct sales.  With a down economy facing us, a secondary goal of course, is to protect against margin erosion as much as possible - which leads to the title of this post.  There are two free tools available today to help you increase online sales and protect against margin erosion.

Google Analytics

I know many people are intimidated by the mere thought of analytics, especially if math was not a favorite subject in school.  And if you’re one of those people, I would suggest taking a look at Google Analytics from a slightly different perspective.  When you get right down to it, all of the numbers and graphs you see are really designed for one purpose:  to give you a glimpse into human behavior.  To further simplify, there are really two things you are looking for in all of the numbers:  1) how are people arriving at your site, and 2) what are they doing once they get there?   Remember that each click you see in your Google Analytics statistics represents an actual human being.
How are people arriving at your site?  Look at specific keywords and search engines consumers are using to find you.  Then take a look at the pages they are landing on.  Are they finding what they’re looking for on those pages?  If not, what can you do to improve your landing pages and increase conversion rates?

What are they doing once they get there?  This is where the funnels available to you in Google Analytics become extremely interesting.  Where are customers leaving in the sales process?  After looking at your Google Analytics numbers, I always feel it is important to go back to the website and look at it through the eyes of your visitors.  Follow the same path you are seeing your own customers taking.  Why are they leaving when they do?  What changes can you make to those pages to encourage them to proceed to the next step?

Even the slightest change in conversion rates can be significant in terms of your top-line revenues.

Rethink Compliance™

As many of you know already, our REthink Compliance™ tool was released this past week to all US wineries, fulfillment houses, and compliance services.  And the response has been amazing.  As the tool is free to all, I can’t think of a better way to protect against margin erosion.  REthink Compliance™ greatly simplifies your direct shipment reporting for each state, meaning you have more time to devote to increasing those conversion rates.  So if you haven’t already done so, I would strongly encourage you to register and to sign up for a webinar to see exactly what the tool has to offer.

Sheri Hebbeln,

Posted in General, E-commerce, SEO, Wine Industry

Good News for Winery Direct Sales

Friday, April 4th, 2008

The Gomberg-Fredrikson Report brought in some good news, courtesy of Wine&Vines, for us proponents of Winery Direct Sales: Direct Sales Boost California Gains (CA winery shipments to all markets are up 2% over 2006). We are pleased, but not surprised. It confirms the silent wine revolution Inertia has been working for over the past 5 years.

I wanted to review all the factors contributing to the growth of winery direct sales, lest you forget it is happening.

1. Regulatory Environment
Ever Since the Supreme Court Decision of Granholm v. Heald in 2005, more and more states are opening up. The regulatory noose is finally beginning to loosen and winery are increasingly realizing that they no longer need to depend on being distributed in certain states to gain customers there. For the most part, eCommerce is enabling wineries to leverage this new freedom.

2. Wine Marketing and Media
Wine is more fashionable than ever. It’s healthy, it’s not as intimidating as it once was. Younger imbibers want it and CA wines have long shed their inferiority complexes. Hence the plethora of wine related publications and the growth of their readers. When the media focuses its attention on a given wine, this creates consumer demand. If the consumer demand cannot be satisfied in a given market for whatever reason, demand will find supply straight from to the producer, usually via a Google search.

3. Consumer behavior patterns
It’s a bit of a chicken&egg thing as to what helps what. Does the media make you drink more wine or because you drink more wine, the media had better write more about wine? This is a moot point. Let’s focus on the virtuous circle. No one will deny, American drink more wine per capita than they aver did, and they also buy more expensive vino. This is good for business. Furthermore, if more consumers enjoy wine, more of them want to explore the infinite possibilities of fermented grape juice, so they research it and look for availability (see factors 1 and 2).

4. Market Changes
The scissor effect: more producers, fewer distributors – this freezes the grinds of the wine market: traditional supply (retail) cannot satisfy a changing demand. And as this new demand grows (see above), new channel are needed to answer it. Moreover, producers no able to reach the market because of the constriction of 3-tier distribution, take the matter in their own hands and being to market their wines themselves. As producers realize that disintermediation helps their bottom line, they sell direct. Simple economics really, but huge vested interests are at stake so don’t expect these changes to happen overnight or without a big fight from the distributors.

The last factor in this growth is not an external macro-economic one; it is very micro-economic in nature and not as evident to outside observers. It deals with the wineries themselves. Here at Inertia we are in a preferred position to observe (and drive) the last factor conditioning winery direct sales growth:

5. Better Direct Marketing
Yes – selling direct is more profitable and a strategically sound business decision. But it is not easy – that is why producers have long left sales to others. But wineries are learning to sell direct and they are getting much better at it, provided they use the proper tools and sound marketing practices. As wineries get better at the sales and marketing game direct sales will grow, to the great benefit of consumers and producers alike.

We know for a fact that the growth of our clients’ direct sales is not just the result of outside forces; it is also in large part the direct impact of how they implement online marketing best practices. We loo forward to more and more winery direct sales!

Pascal Davis, Director Marketplace Development

Posted in General, E-commerce, Wine Industry

Simple Math: CRM Conversion

Tuesday, February 19th, 2008

Over the past few months we have blogged about various ways that our winery partners leverage the REthink Engine to increase their sales, and a topic that comes up time and again is conversion (check out some of the recent BLOG entries that touch on this subject: How much is your average order? & Email Campaign Effectiveness). The subject of conversion should begin with one question: how much does 1% of your total sales represent? All things being equal in the world of Customer Relationship Management (CRM) tools, the best solution is one that drives the highest % conversion. In speaking with wineries who struggle to justify the cost of such a solution, especially when they currently possess all the CRM “pieces”, some simple math usually helps them to see the light…so to speak.

What do I mean by conversion? Well, there are many types of conversion when it comes to Direct Sales. One common example of conversion is the % of sales transactions relative to the total # of campaign/promotion recipients (email, direct mail, etc.) For example, if you send an email blast to 1500 people which results in 15 orders, the conversion rate is approx. 1%. Unlike email campaigns which have relatively zero cost (depending on your email solution), this conversion rate for direct mail campaigns is critical to understanding ROI associated with cost of paper, stamps, etc. Here are some other examples of conversion that are the result of a sound CRM solution: conversion rate for customers vs. club members, conversion rate for declined credit cards, conversion rate for allocated wines vs. non-allocated, and so forth…

What is the relevance of 1% of sales when it comes to conversion? Again, if all CRM solutions are the same in terms of cost, the solution that provides the highest compound rate of conversion will provide the highest ROI. By doing some simple math to determine the % of sales and/or cost savings (i.e. declined credit card conversion) that can be achieved through leveraging the right CRM solution, most wineries come to the realization that a significant amount of the costs are offset. One more factor in the conversion equation is Time: by converting time previously dedicated toward costly administrative activities to customer-facing, revenue-generating activities a winery can focus on what they do best…making great wine and building customer loyalty for their brand. The conversion rate math is simple, especially when it comes to calculating based on sales, but the tough question is…what is your time worth? By answering this question, you will undoubtedly come to the conclusion that working smarter and leveraging a better CRM solution is the best decision for your direct sales business.

Dan Chapin, Director, Sales Development

Posted in General, Direct 2.0, Wine Industry

Wineries Must Compete with Retailers for Online Sales

Monday, February 11th, 2008

You may have heard of big wave surfing, in places like Maui, Hawaii’s Jaws or at competitions such as Mavericks on the coast of Northern California (check out the documentary Riding Giants). Last month I enjoyed a great day at the beach watching the Mavericks competition. It’s a bodaciously insane surfing event where the world’s best must be towed by jet skis to catch 30-foot waves.

What’s that got to do with wine marketing? Well, it made me think of an analogy - here goes:

The metaphoric big wave is the expected growth of online wine sales. Numbers don’t lie - so here are the recent stats for the year 2007 (courtesy of the Wine Market Council):

• 38% of Millenials (those born between 1980 and 1993) say they are drinking more wine. Nearly all Millennials will be of legal drinking age in the next 5 years and this group will drive both consumption gains and taste trends.
• 18% percent of core wine drinkers (those that imbibe at least once a week) have purchased wine online.
• 64% of those purchases were done on winery websites.
• Over the next 5 years online wine sales will triple!!!!!!

My point today is that the big wave is coming for online wine sellers, be they wineries or retailers. How will they surf it and which channel is best prepared to capture these new consumers we keep hearing about? The telling number here is that 2/3 of online sales in 2007 were direct, i.e. from winery websites. As online sales grow, will wineries keep that market share, or will it dwindle?

I would argue that currently retailers are better poised to ride the wave. Like the surfers, if you want to ride big, you literally need some ‘pull’- pull marketing that is! Retailers have quite a bit of it already, are getting more, and it will increasingly help them.

Wineries have many advantages over the traditional retail channels like content, branding, being the producer, loyalty built through hospitality etc., not price however. These strengths work great to retain customers acquired directly (via tasting room, clubs, website…). However, harnessing the power of the web to acquire new customers is another feat entirely - hence the need for pull marketing. To keep with the analogy, wineries have superior surfing skills but they don’t have a Jet Ski to help them catch that mythical break. Bummer dude!

A newfound desire for wine, marketing, demographics, deregulation, supply… all converge to generate and sustain new demand. The new wine buyers that make up the big wave are the famed Millenials. Who are they? What is their purchasing behavior? How do they shop? What makes them tick? These are questions anybody selling wine online should be asking. Yep, the eCommerce revolution is hitting the wine world.

Like most savvy online shoppers, these new wine buyers will first look to shopping portals, vertical search engines, social shopping sites, social networks, blogs, forums, etc. to get information, prices and to make a purchase. If a prospective online wine buyer has not visited your winery or received an email from you or heard a recommendation from a friend, chances are he or she may not first look to your website to buy wine. That person will Google what they are interested in and see a very long list of possibilities - only one of them being your winery’s website.

That plethora of options can be daunting, so smart entrepreneurs have created marketing services that act as filters to help consumers find what they want quickly. You know the main ones: Wine-Searcher, WineZap, CellarTracker… and the newer ones: Snooth, Winelog, Vinquire, Radcru, TasteVine, Vino2Vino, Calwineries, Bottlenotes, Cork’d, ClassicWines… There are many. These essential outfits compete to cater to the needs of the inquisitive wine lover. With a few exceptions, they look to wine sellers to fund them. Almost all paths to purchase lead to a retailer paying for a click or a sale. These wine marketers allow supply and demand to connect, and so far, the supply being connected is represented mainly by retailers. This ecosphere of wine marketers has undeniably helped wine retailers, big or small, build their online business. Can they also help wineries?

Wine retailers have been at the online marketing game for some time now. In addition to experience, they have the advantage of working with large inventory, this makes for economies of scale in marketing. They can feed their product data to various price comparators or product list aggregators and also engage in paid search. Retailers have been quite effective at creating multiple paths to their stores. With the growing appetite for imports, this pull marketing is what will surely help them ride the big wave of online wine sales.

The number of wine producers is growing. The number of distributors is decreasing, as is their appetite for diversity… This classic scissor effect creates the need for wineries to find customers outside their usual hunting grounds. No one can argue that the web can be the largest source of new sales. We can agree that retailers already have an edge in this regard. So, given this situation, how can wineries effectively compete for new online customer acquisition?

They need to find ways to enter the same marketing channels as retailers and have their products and content listed on as many wine search engines, databases, social networks or marketing programs as possible and have links to their store wherever their brand is mentioned. Not only will having links and content listed outside your website help your SEO, it is the surest way to bring in traffic and sales.

In acquiring new customers from the web, I would argue that:
- wineries can hugely benefit from such pull marketing
- wineries actually have many strengths they can leverage over retailers
- wineries can play on mediums retailers cannot
However, for wineries to make this happen, they need what only retailers have - scale. Wine marketers need to work with compatible entities, requiring low overhead for data collection. I would argue that for wineries to build this kind of pull marketing, they need an enabler who can bring scale to the table. By working with multiple wineries, using a common data platform, such an enabler can broker on their behalf to make this happen.

In case you’re wondering where this is going… Inertia is busy building the Jet Ski that will help its clients ride the big wave. To beat the analogy to death, I’ll say that what powers the jet ski and how it pulls is best kept for a later blog post… Gnarly!

Pascal Davis, Director Marketplace Development

Posted in General, E-commerce, Marketing, Direct 2.0, Wine Industry

Winery Promotions for Every Day and Week of the Year

Friday, February 8th, 2008

The thought struck me, as I watch a client of ours, Twisted Oak Winery, execute a brilliant promotional campaign called “Take your Chicken to Work Week” (going on now through February 10th with the overview here and details here), that our social calendars are completely and utterly governed by marketing around holidays.

This is, of course, no revelation to anybody that has purchased a bag of Hershey Kisses in the last 10 years. This is no different for winery marketers either as I have been inundated with wine-related Valentine’s Day wine specials. I would have to drink multiple cases of wine in one day to satisfy even a fraction of the promotions that I have seen from wineries and online retailers.

You know the promotional drill: Christmas gives way to New Year’s that gives way to Valentine’s Day that gives way to President’s Day that gives way to St. Patrick’s Day that gives way to Easter that gives way to Memorial Day that gives way to the 4th of July that gives way to “Back to School” that gives way to Labor Day that gives way to football that gives way to Halloween that gives way to Thanksgiving that gives way to, well, we start the cycle all over again.

And, while, these calendar-ized marketing routines that begat social engagement are all well and good and help drive marketing promotions when people have their so-called buying aperture open, there is something to be said for being that salmon that is swimming upstream, or to paraphrase Led Zeppelin, the winery that is going ‘in through the out door.’

What I mean by this is, if you are a winery continuing to muscle your way onto an ever-bigger stage measured by wine club members, direct sales, mindshare online, etc. than different is good.

If you are going to be different, a “Take your Rubber Chicken to Work Week” in lieu of Valentine’s Day promotion is a dandy idea.

And, while we can all pat Twisted Oak winery owner Jeff Stai on the back for continuing a wild streak of creativity that sets his winery apart from the crowd, the reality is that every single winery reading this can do the same. The rules are simple:

1) Tap into the vein that carries your winery DNA and determine what is unique and different about you

2) Maximize that determined differentiation by marketing yourself uniquely and in accordance with your ethos.

That is it, really. Who are you and how do you communicate your unique difference to people?

This sounds great on paper, but it much harder to achieve in real life, just ask Jeff at Twisted Oak, and I am sure he would echo the same, “easier said than done.”

However, here is a place to start: go to Amazon.com and buy a book and CD-Rom combo called “Chase’s Calendar of Events.” This book is called, for good reason, “The bible of special occasions” by the Los Angeles Times. Chase’s Calendar is a global view (representing 194 countries) and a single reference for special events, holiday’s, federal and state observances, this-day-in history notations, and anniversaries. There are 12,500 entries and all are searchable via the CD-Rom.

Today, February 8, 2008, for example, is “Laugh and Get Rich Day,” in addition to being the 98th anniversary of the founding of the Boy Scouts of America.

The point is, any day that resonates with your winery DNA is a perfectly suitable occasion for promotions, and likely a better clutter-breaking option than the same holidays that others will be marketing around, increasing competition.

So, as your Valentine’s Day promotions die down, and you lament the number of other wineries vying for the same share of wallet from your customer, you may want to celebrate “Laugh and Get Rich Day,” swim upstream and plan your next promotion off the beaten path. A little bit of planning, ingenuity and the Chase’s book can help you break free from the clutter of “major holiday” promotions and truly stand out.

*NOTE* A quick Public Service Announcement: Tina Caputo, formerly the Managing Editor at Wines & Vines and now a freelance writer and wine critic, is accepting samples for her monthly column at Wine Review Online (WRO). WRO is under the radar to many folks online, but their line-up of writers is truly impressive. Likewise, Tina’s an evenhanded pro and if you’d like to submit samples to her, please contact her at: tinacaputo@yahoo.com

Jeff Lefevere,

Posted in General, Marketing, Wine Industry