We can’t sugarcoat this new reality: tasting room traffic may never be the same again. But hopefully close. That’s pretty easy to conclude as tasting rooms have sat closed going on three months now. Which by the way, hasn’t happened since prohibition.
When life and business throw you a high fast curveball, hit the deck. Then get back up, dust yourself off, and get focused on hitting the next pitch out of the park. That is what Hall of Famers do. That’s we’ve done at Marketing Brix and what leads me to this post on E-Commerce and online wine sales. And the new norm.
The curveball, in this case, is Covid-19. The batter that hit the deck are wineries who’ve had to shut down their tasting rooms. Tasting rooms that use to be full of people who simply wanted to go out for a great day of wine tasting and buy their favorites to take home. They’ll be back, someday soon we hope. but life and business in the tasting room will never be the same…a pretty safe scouting report agreed to by most.
A few facts; a typical winery generates about 35% of direct-to-consumer revenue from its Wine Club (if not, we’ll need to work on that). Across the country, you’ll find about 50%+ of sales are at the point of sale, derived from the winery tasting room or an event at the winery. In wineries in places like North Carolina or Virginia, it’s much higher. Then about 10-15% come from online via E-Commerce sales on winery websites, or maybe telephone sales. As you can see, E-Commerce is (was) still by far the smallest source of sales and revenues, until now. That’ll need to change for most wineries to survive in the new norm.
Since those numbers came out in late 2019; things have obviously changed dramatically, the wine and winery sales environment has been turned on it’ head. In less than 90-days. Although tasting rooms will come back online someday, the number of visitors will be down, maybe way down, and for some time. But there is something you can do to fill the void. Here’s the silver lining; E-commerce and online sales across the board will grow dramatically for wineries who make a in that direction. The evidence is already in. Selling online is here, and here to stay.
Let’s fast forward to the current situation and numbers. A very recent Nielson survey said; Online sales of alcoholic beverages continued to climb with increases of 246% percent through March 21st, 291% percent through March 28th, and 441 percent through April 4th! Online sales of wine was a big part of that increase. What industry outside of cleaning products see that kind of growth now? “No one has ever seen the kind of channel shifting we’re seeing now. It’s totally unprecedented,” Danny Brager, Nielsen’s senior vice-president, beverage alcohol practices said.
And think about this fact; the average online wine sale off a winery’s website was over $200 per transaction. Where the average point of sale at the tasting room was just over $100 per transaction…pre-Covid-19. That is a pretty big difference in revenues per sale.
And think about this. The cost of designing a professional email campaign to sell your wine online is much less expensive than paying tasting room staff. No, we are not suggesting you get rid of your staff or the tasting room, far from it, it’s here to stay too. Consumers love the experience of the tasting rooms, and it’s great for branding. But for the near future, or longer, you’ll be hosting less tasting room experiences. There is room for both sources of revenue…as a matter of fact, regardless of this crisis, hopefully you were looking, or working, hard at online revenue sources. You know what they say, don’t put all your eggs in one basket.
We understand most of you didn’t really need to worry about or have time to focus on online sales before. Your tasting rooms were full every weekend with thirsty wine loving people. But of course, that has changed. So, to thrive, not just survive, you have to change with it, and because of it. And you’d be surprised to find out how easy and inexpensive it can be achieved…if executed properly.
Needless to say, online wine sales are up, way up, across the board, across regions and even countries. So, there are lots of questions you may want to ask yourself, and answer sooner than later:
- Are you getting your share of the dramatic increase in online sales?
- Is your website’s online experience as good as it can be?
- Is it super easy for your customers to purchase your products on your website?
- Are your email campaigns to drive people to your website, professional, engaging and choreographed properly with social media?
- Do you your emails build or bolster your brand, while selling wine?
- Are you really good at collecting data from your customers so you can serve them once they leave?
- Do you have a plan to generate revenues and profits from online sales?
These questions are designed so you can do a quick, honest evaluation of where your winery stands with regards to online sales, and your customers experience with your brand.
We’re in this with you, your success is critical to our success. We want to work with those who need it and want to do their very best to fight and win in these unprecedented times…and beyond.
If you need any help with any, or even all of this, we’re here to help. I’ll leave you with a saying we love around here:
I’m not going to tell you it will be easy, but I am telling you it will be worth it.
Cheers, The Marketing Somm