Anyone who has visited wine country has experienced the beauty of the surroundings and the abundance of excellent wines. It should be easy to go to the wineries’ Web sites when you get home and order some, right?
Not so fast. Because of legislation dating to Prohibition, wineries can ship legally to only 14 states.
With national wine sales surpassing $23 billion a year, and a product category with strong consumer interest, tremendous potential exists for wineries to sell wine and build their brands via direct marketing. Thanks to the precision and affordability e-mail affords, wineries are embracing it as the leading way to connect with interested consumers. Here are some of the challenges:
Reach. As mentioned above, only 14 states allow shipment of wine to consumers within their states.
Marketing limitations. Offers that include “free,” many loyalty programs or any promotion deemed to “motivate the purchase of alcohol” are not allowed.
Distribution. Large distributors dominate, and many attempts at DM have been viewed as cannibalization. This has been a key factor in keeping direct sales of wine at 2 percent of the $23 billion market.
A few months ago, the U.S. Supreme Court struck down New York and Michigan laws that permitted in-state wineries to ship directly to consumers but not out-of-state wineries. New York Gov. George Pataki has signed legislation allowing shipments. This is big news since New York is the third-largest wine-consuming state. Florida and Connecticut just signed legislation allowing wine shipments into their states as well.
E-mail marketing offers several benefits to wineries:
Margin. Selling a bottle of wine through direct means is two to three times more profitable for a winery than through the traditional retail channel.
Building loyalty. Wine is a true “lifestyle” product. Consumers want to learn more about the history, wines, events and people behind the brand. This helps explain the typical 50 percent-plus open rates for most wineries’ e-mail campaigns.
Wine club memberships. Wine clubs make up a large portion of the direct sales, attract the most loyal consumers and deliver a regular, consistent revenue stream to the winery.
Generating visits to the tasting room and events. These are opportunities for face-to-face interaction with consumers and also can generate significant revenue.
Cross-channel brand building. With more than 3,500 wineries, and literally tens of thousands of labels, it is vital for wineries to gain awareness to help build retail and restaurant sales as well as direct.
Here are some best practices when using e-mail marketing:
Segmentation. Most wineries’ audiences contain people with different profiles – online visitors, tasting room visitors, wine club members, buyers and event attendees. E-mails need to address relevant interests while introducing the consumer to other aspects of the winery’s business.
High scores. Wine reviews drive sales, period. Whether it is a favorable Robert Parker score or a Gold Medal from a local wine competition, tout it.
Offers. It is vital to differentiate from the retail chain. The best direct offers include:
· Free shipping: One of the few instances where the word “free” can be used legally since it involves just the delivery of wine.
· Value-add: Include a cookbook, wine glasses or other product with the purchase of a certain amount of wine in order to boost average order value.
· “Advance notice” and “limited supply”: As opposed to other products, when the 2001 Cabernet is gone … it’s gone. Giving your customers first opportunity to buy not only boosts sales but loyalty as well.
· Unique wine sets: Create themes (“flights” of wines) that are Web-only and differentiated from retail.
· Gift offers: Wine is the perfect gift. Particularly around the holidays include packaging and gift cards.