#Online Innovation In The #Wine Industry

Why might a producer choose to use a wine club and online sales to boost sales? What are the benefits and restrictions of selling wines this way?

    1. A well-run wine club combines several major benefits for producers
      1. Creates a sense of exclusivity and buzz around flagship product which can optimise price achieved of the flagship product and sales volume throughout the range (a “ladder branding effect”) —  this has been very effectively realised by Screaming Eagle which even has a waiting list to join the club
      2. The mailing list forms a way of building lasting relationships with customers who will often introduce family and friends to the brand — a wine club is a variant of a company newsletter but with much higher levels of interest generated among consumers
      3. Customer loyalty can be enhanced thus providing some resilience against natural fluctuation in productions levels
      4. Customers who have a long-standing relationship with the producer have a reduced likelihood of deserting the producer forever if there are supply issues in particular years caused by e.g. poor harvest
      5. Similarly, if there is larger than usual production, the existence of established allocations to customers can be relied upon to shift a significant slice of product and ideally also leveraged into extra volume at a (ideally minor) discount if this is seen as optimal under the circumstances
      6. The wine club can be a conduit for driving traffic to the cellar door, which is a further useful channel in itself but also further strengthens client relationships and is a positive advertising vector
      7. Valuable marketing intel comes for free — who are the customers?  What is their socio-economic breakdown?  What market segments could be addressed further?  Which products appeal to which people?
      8. Having the wine club online is a relatively inexpensive way of reaching a very large number of potential clients on a global basis
      9. Given the current nature of the commercial environment, not having an online presence or worse having an amateur one makes a producer appear extremely backward-looking: to what extent can one expect a producer with no website to be on top of the latest trends such as organic certification/new varietals post-climate change etc
      10. An online ordering possibility is extremely valuable in the extreme circumstances currently obtaining; wine writers have commented that small producers with no online presence are struggling enormously under lockdown because they simply have no way to move product
    2. There are no major disadvantages to having an online presence
      1. There are some costs involved in setting up and maintaining a website: specialist skills are required and it is very important that the website be reliable and easy-to-navigate
      2. This includes consideration of how the website will appear on a phone — this is a channel of ever-increasing importance and many website today simply fail to be usable on a phone
      3. Staff time must be invested in maintaining the website and potentially also a social media operation
      4. This is rather time-consuming and can be seen as a non-core activity for a wine producer
      5. For example, customers will often use social media to comment and complain about the product; this must be handled on a measured and timely basis
      6. The entire nature of social media posting is confusing for two reasons: firstly one must somehow combine professionalism and informality and secondly one must stay breast of an ever-changing landscape of platforms e.g. the median Facebook user in the US is now 41 — this may be fine for reaching the established client base but is not a solid future-proof approach alone
      7. Keeping the online stock updated is another task which will involve sustained effort

Gusbourne: an example of a producer who is using online innovation to sell their wines

  1. Gusbourne is a successful producer of English sparkling wines which has an online wine club named “Gusbourne Reserve”
    1. This is an intelligent choice of name which combines a sense of exclusivity with simplicity and a focus on the brand; it would have been very easy and lazy to call it the “Gusbourne Wine Club” etc
    2. The club has a dedicated region of the main website: https://www.gusbourne.com/reserved 

How does this online presence gives the producer various touch points with the consumer?

  1.  The various touch points are well-reflected by the navigation options at the top of the start page of the subsite
  2. Navigation options are:
    1. ABOUT US
    2. VINEYARDS
    3. WINEMAKING
    4. WINES
    5. STOCKISTS
    6. TOURS & TASTINGS
    7. RESERVED
    8. TIME WELL SPENT
    9. BUY
    10. TOURS
  3. Studies show that every time a question is asked or input is required on a website, 50% of enquiries die — it is therefore essential to have as little time/navigation required between arrival on a site and an opportunity to purchase as possible — many of the options above lead on to immediate revenue-generation opportunities and the rest offer further information which will ideally retain visitors on the website
  4. The first four options offer further information; all of these channels enable Gusbourne to appeal to potential clients who are specifically interested in the location of the vineyards or how the wine is made or what wines are available, with the very first option ABOUT US being the default for someone who wants to know more but has no specific direction of enquiry at present
  5. All of the remaining options are revenue-generation opportunities; details of where to buy the wine offline are provided; opportunities to visit the cellar door are promoted; further details of the wine club are offered; TIME WELL SPENT is a COVID opportunity whereby their sommelier will engage on specific topics of interest such as food matching via bespoke online channels such as Zoom
  6. The remaining two options BUY and TOURS are placed at the far right — these are repeats of options already available but are basically designed to catch very busy people — if someone only reads one word on this page, it is likely to be one of these two: one offers the chance to buy product and the other offers the chance to book a tour

How effective is Gusbourne’s online strategy?

  1. The online strategy of Gusbourne is extremely effective as a result of strong design with varied professional photography and frequently updated content (last two posts are dated today and six days ago; both are fronted with appealing photographs) — there are nine posts from the current month which is impressive
  2. Content is fresh and informative with discussions on what is happening in the vineyard in spring with a theme of “hope” and renewal — particularly valuable and sensitive to current conditions
  3. Plenty of food matching advice from chefs as to what can work with the product
  4. A post on the unconventional and interesting background of the founder (a surgeon from the noted wine region Stellenbosch in South Africa) which adds human interest
  5. Strong use of consistent livery across the website enhances professional appearance — front page of subsite has very strong and bold graphic design which is simple and straightforward and emphasises the product
  6. The use of text has been stripped back to the absolute minimum which is wise since “busy” websites are extremely off-putting — there are some navigation options and the mission statement:
    1. “Become a member today to guarantee your allocation of our wines, direct from the cellar, and access to a range of exclusive benefits.”
    2. This is very strong offer with no wasted words; it tells potential members what they are getting and why they should want it; it is good marketing to explain to the customer why the product will give him what he wants and tell him also he wants it just for the avoidance of doubt
    3. Sells an “experience” or how a customer will become more the person he wants to be or to project: “I want to be the kind of person who is in the club”
    4. Immediately below the main page of the subsite comes a USP statement: “YOUR ALLOCATION: Two bottles each of Gusbourne Brut Reserve, Rosé and Blanc de Blancs are allocated to each member at cellar release and delivered in two cases of six during the course of the year.”
    5. This tells clients exactly what they are getting but also makes it clear that the initial commitment need not be immense
    6. The offer continues: “Throughout the year, you can order additional bottles at preferential rates, and you’ll also have the opportunity to order our limited edition, mature and rare wines, which are only available to members” — the exclusive benefits are likely to be extremely appealing to clients; note also the constant address of the potential client as you — emphasising what it is that YOU are going to get if you join Gusbourne Reserve
    7. “All orders receive complimentary UK mainland delivery” — this is a way of giving a discount to loyal customers without actually reducing the price of the product, which could have adverse market implications
      Gusbourne is relatively highly-priced: low yields in the UK under the current conditions mean the price per bottle will be relatively high at ca. £20 per bottle — the winery has to produce a premium product to be viable at this price
  7. Comprehensive social media operation on Facebook, Twitter and Instagram with dedicated content tailored to the different platforms (twitter less visual than the others; Instagram more video than still photography)
  8. Easy way to signup to the mailing list which can be done without commitment to joining Gusbourne Reserve (but one imagines a decent upgrade/conversion rate given the effectiveness of the site design)
  9. Suggestions: this is such a professional and widely-ranging online operation that it is extremely difficult to suggest any further improvements
    1. One possibility to explore would be more video content — the current site is very text-based and this may gain less traction with younger people now and in the future

Author: Tim Short

I am a former investment banking and securitisation specialist, having spent nearly a decade on the trading floor of several international investment banks. Throughout my career, I worked closely with syndicate/traders in order to establish the types of paper which would trade well and gained significant and broad experience in financial markets. Many people have trading experience similar to the above. What marks me out is what I did next. I decided to pursue my interest in philosophy at Doctoral level, specialising in the psychology of how we predict and explain the behaviour of others, and in particular, the errors or biases we are prone to in that process. I have used my experience to write The Psychology of Successful Trading. In this book, I combine the above experience and knowledge to show how biases can lead to inaccurate predictions of the behaviour of other market participants, and how remedying those biases can lead to better predictions and major profits. Learn more on the About Me page.

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