New Wine.com Hopes Vintage Customer Database Lifts Sales
The decision to overhaul its Web identity -- now officially wine.com by eVineyard -- was largely steeped in the relatively strong wine.com brand, which had been bolstered by ad campaigns totaling $100 million in recent years.
EVineyard, which will remain the firm's corporate name, also based its decision on surveys it conducted in 2000 to measure its own brand name. The company learned that wine.com was much more popular than eVineyard.com among both those who had bought wine online and those who had not.
The Portland, OR-based firm also increased its e-mail database from 110,000 addresses to about 500,000 addresses because of the acquisition. The entire house file received an e-mail notice concerning the name change July 17.
The better brand and larger e-mail database should strengthen the Internet firm's ability to convert viewers to customers, said Barrett LaMothe Ladd, an independent retail analyst based in Concord, MA.
However, LaMothe Ladd said, the new wine.com still has to prove it can provide the selection and service that customers had come to expect.
"The move also seems to recognize what most Internet stand-alones have come to know: It's a real challenge to build a strong brand," she said. "The new domain name should definitely help site traffic, as some people looking for wine online will likely type www.wine.com into their URLs without knowing whether or not it even exists."
Although eVineyard plans to run print ads to brand wine.com this fall, the firm will largely continue to focus on getting existing customers to spend more. During its last three months, eVineyard.com's average order size climbed from $80 to $90 because of several marketing efforts, the company said.
In its most recent example, wine.com has created templates that allow viewers to have their wine bottles etched with generic messages for events such as birthdays. During August the site plans to extend the service so viewers can etch personalized messages such as names, dates and anecdotes.
Viewers also will be able to decorate bottles with four-color artwork and order personalized greeting cards. Wine.com plans to send its expanded house file at least one e-mail promoting the service.
While it is too early to estimate how much this feature might raise the site's average order size, early indications look positive, said Brett Lauter, vice president and chief marketing officer at eVineyard.
Lauter said his firm has received more than 20 e-mails from past customers who had heard of the upcoming personalization service.
One corporate customer plans to order more than 5,000 bottles of wine with etched messages or painted images, he said. In addition, Lauter said, three people organizing fall weddings have said they will order more than 100 personalized bottles.
"I'd say from the anecdotal evidence that there is a huge pent-up demand for this service," he said. "We have yet to even advertise the service."
Like other online retailers, wine.com requires shoppers to become registered members at checkout, which lets the firm track their purchase histories and use the information for upsells and list segmentation.
The company recently expanded its affinity wine clubs from three to five to further segment its audience for e-mail offers. One of the new upscale clubs offers three bottles of premium wine for three months at $225. People who sign up for this club receive targeted e-mail offers that are different from the other four clubs.
In addition, eVineyard plans to send e-mails to the 400,000 new prospects it acquired in the wine.com deal to increase membership in the clubs.
Lauter said his 3-year-old firm, which delivers wine in 27 states and nonalcoholic wine nationwide, expects to turn its first profit before 2002. Industry analysts have estimated that the privately held eVineyard did more than $5 million in sales in 2000, while Wine.com last year reported revenue in excess of $25 million.
Every other alcohol stand-alone has tanked in a similar fashion to wine.com's first incarnation. The development leaves a scant number of local and regional retail firms that have launched e-commerce initiatives to compete with wine.com.
One example is Internet Wines & Spirits, Fairview Heights, IL, which is a one-store operation that is moving to a bigger building partly because of increasing Web sales.
"I don't think wine.com will make it because the California wineries are starting to control too much of the direct-to-consumer market," said George Randall, owner of Internet Wines & Spirits. "They want to cut out the middleman."