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Agenda
• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
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Why isn’t normal eCommerce working for wine consumers?• Retail in-store purchase gives immediate gratification
• Higher freight and fulfillment costs of eCommerce vs going to a retailer
• and vs other industries’ freight costs
• Enjoyment of shopping at a fine wine stores
• Online experience can be frustrating, credit card fraud concerns
• Winery brand stories are much weaker online than at the cellar door
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Source: “Wine Marketing Online” (2013) p.68
Why isn’t it working for wineries?
• “Build it and they will come” assumption
• Single purchase eCommerce acquisition costs are high
• Brand story is hard to tell online
• Channel conflict with retailers restricts discounting
• Cheaper at the local store/supermarket
• Fulfillment once per day for small amounts is costly — almost the same as large amounts using batch fulfillment
• Ad hoc (and custom choice wine clubs) are hard to scale
• Concerns about technology and internal training issues
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Australian Wine Clubs
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0%
15%
30%
45%
60%
2009 2015Source: Australian industry estimate
Percentage of Australian Wineries with Traditional and Recurring eCommerce Wine Clubs
• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
Agenda
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What is a Wine Club?
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Email List with offers
Recurring purchase paper form
Recurring purchase via POS or eCommerce
Programs:Email & Loyalty
Continuity: #/period, fixed shipping dates
Mem
ber-only benefits
cred
it c
ard
Discount Club - website / login
1. Direct-To-Consumer (DTC) worth much more
• Assuming @$50 higher price per DTC case vs distributor case
• 1000 DTC cases = $50,000 of additional revenue (and profit)
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Source: Deloittes NZ Wine Vintage 2014 report
4000 cases = $200,000
10,000 cases = $500,000
1. Wine club customers are worth much more
• Cellar Door order value*: $70
• Wine Club order value*: $480 (over 26 months)
• Idea is to sell clubs not bottles
• e.g.14,400 visitors pa of whom 1.7%* buy wine = 245 people
• At $70 = $17,150 of wine (at cellar door)
• At $480 = $117,600 of wine (over 26 months)
• Difference in revenue of $100,400
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*Source: SVB Tasting Room Survey 2014 (slides 14 and 35)
Recurring >
7X= $100K more revenue
Single>
Wine Clubs have little overhead vs other channels
• Distributor and trade channel
• sales staff, travel, accommodation, entertainment, coop spend, trade events
• Cellar door channel
• cellar door building, staff, cellar door marketing and events
• Wine club alongside a cellar door
• software
• (wine club manager)
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2. Fulfillment efficiencies1.Division of Labour
• Famous example: 1 person making pins, made 20 pins per day.
• Breaking the process into 18 separate steps, with 10 people made 48,000 pins a day (4800/person)
2.Automation of tasks
• Process of normal eCommerce shipments, done one by one: check payment, print label, arrange shipping, email customer
• Recurring eCommerce and batch shipping process: in one go using software
• 10X more efficient example of a large wine club
• 30 days reduced to 3 days using more efficient fulfillment practices and technology
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3. Brand building
• Make your customers feel part of the “inside circle”
• More opportunities to communicate with your customers
• Brand messages with the shipments and via email
• Member only benefits build the brand
• Become more loyal
• Advocates
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• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
Agenda
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Wine Club StructuresProduct
• Red only, white only, mixed, varietal, reserve
• Majority of subscriptions red only
• Club member only wines
Frequency
• Monthly, Bi-monthly, Quarterly, Biannual
Quantity
• 2—4—6—8—12 bottles per shipment
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Subscription Price
• Tiers
• Low—a few lower priced wines in some lower priced packages, lower frequency, fewer bottles
• Normal—regular wine selections, regular frequency
• High—reserve wine in some higher priced packages
Wine Club StructureCommitment Period
• Depends on discount
• Little or no discount then no commitment
• Do you really need a commitment period?
• People who sign up for discounts quit the club earlier
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Discounts
• None—see member benefits
• Member only discounts on all bottles
• Discounts for additional purchases over and above the wine club shipment
• Some wines, or lower discounts on reserve wines
• Free tastings
• Other products T-shirts, food
• Events
Member benefits
• What would you do when your friends and VIPs visit the cellar door? = your wine club
• Special wines
• Exclusive or first time access to scarce wines
• Exclusive tours
• Members-only tasting events, reserve tastings
• Special member tasting room, lounge, or roped off area
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Wine Club Events (instead of discounts)
• Events: off-site, winemaker events, parties, art gallery shows…
• Estate walks, mushroom hunts, horse buggy rides in the vineyards
• Regular wine education events
• Shakespeare or film festivals
• Concerts and music events
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Source: www.intowine.com/sonoma-wine-clubs-club-club-assessment-author-jim-arnold
Brown Brothers (quarterly)
21Source: www.brownbrothers.com.au/packages/subscriptions/
Moshin
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“ The Moshin Wine Club is a pre-release tasting program. You’ll receive 6 bottles of yet-to-be-released small production wine 2 times a year. Once you try the wine, you can have 6 weeks to
reorder your favorites for an extra 5% off…”
• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
Agenda
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Grow your wine club
• #1 is Cellar Door
• A cellar door without a wine club is like a car without an engine
• At events
• Online
• Email marketing
• Direct mail and phone sales
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Cellar Door Training
• Cellar door staff training
• Pour, inform, and sell
• Conversation naturally and respectfully includes wine club information
• information about member only wines, free tastings, events
• Straight forward pitch
• Ask on purchase and/or at end of brand story/tour
• Enthusiasm should show: the club really should be a great thing!
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Cellar Door Wine Club Sales
• Offer commission (for cellar door team and individual)
• Show daily, weekly, month sales by individual and team
• Wine Club has high visibility in the Cellar Door
• posters, brochures, forms, iPad sign-up apps
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• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
Agenda
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Conversion rate and Net Wine Club Growth
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Average attrition rate is 20%, growth is 35% (SVB )
Use Door counter and POS
Can be as high as 20%
• eCommerce is failing the wine industry
• What’s a Wine Club and why have them?
• Wine Club Structures
• How to Grow a Wine Club
• Metrics
• M&P
Agenda
33
Convert
Consideration
Discovery
Repeat
Workshops 2015 - Cellar Door Focus
• Social Media (Last month)
• Wine Clubs: boosting wine purchases (Feb/Mar)
• Driving Cellar Door and Website Traffic (May/Jun)
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About M&P
• M&P: Wine Specialist Digital Marketing and Ad Agency
• Wine Websites: eCommerce & Wine Clubs
• Advertising (online, social media and traditional) & Design (logos and labels)
• Social media management software and Mobile Apps
• Marketing and Cellar Door Strategy
• NZ Exclusive Distributor of Specialist Wine Website, Wine Club, and Social Media Software
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Questions?Contact Details:
Bruce McGechan
Mobile: 021-245-8881
Email: [email protected]
Facebook: http://facebook.com/WineMarketingPros
Twitter: @BruceMcGechan
Blog: www.WineMarketingPros.com/blog
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