DTC Sales Are Growing Year On Year. How To Make The Most Of It?
With Direct-To-Consumer (DTC) sales channels turning out to be the most lucrative for wineries, a large number of them are switching to direct sales online.
A massive number of wineries across the States have been investing in the development of their tasting rooms, online presence, and e-commerce sales to take advantage of DTC sales especially during the pandemic. Like Rob McMillan, Executive Vice President of the Silicon Valley Bank mentioned “Internet’s portion of winery revenue jumped to 16.2% in 2020 up from 8.6% in 2018”. DTC has turned out to be an important avenue for wineries to generate income during the pandemic and thus would be a major topic of discussion in the coming years.
What is DTC and Does it Have Any Benefits?
In simple words, DTC means Direct-To-Consumer where the consumer purchases wine directly from the winery while canceling out the presence of wholesalers and retailers. As a consumer, it gives you the chance to purchase some great and rare blends and vintages directly from the winery, order your wine online from the comfort of your home, and of course build trust with your producer.
However, when it comes to the wineries, there are a large number of benefits when it comes to DTC sales. A few of them are:
1. Helps in building close relationships with the consumer which leads to a loyal customer.
2. The absence of wholesalers and retailers avoids the nipping of your profit margins.
3. Increases brand awareness due to direct transactions.
4. Incremental sales due to direct transactions.
5. Allows you to differentiate yourself from the rest of the wineries.
How Can You Increase DTC Sales?
The avenues to earn profits through DTC sales are vast and something you can keep working on throughout the life of your business. Even a small conversation with the consumer during a winery tour can go a long way and help you convert a visitor into a loyal customer. A considerable number of wineries are paying strong attention to developing their DTC sales through various verticals. Let’s discuss a few verticals which can enable you to grow your business when it comes to DTC sales.
1. Interactive Website
The website is quite literally the first point of contact between the customer and the winery. It is the hub of all activities. Based on the 2021 SVB DTC Wine Survey Report, 40.6% of the US population visited wineries through an appointment in 2021. Most of your consumers would go through your website to make an appointment to visit the winery or even know more about your wines.
Image Source: SassWinery.com
It is in your hand to make the website as interactive as possible and convert every visitor into a customer. A few things that you should keep in mind while setting up your website are:
1. Data collection through every user's email.
2. A brief introduction about your winery along with the history. People love to learn the stories behind what they are drinking.
3. Attractively display your wines. If your wines have won any awards or accolades, make sure you mention them next to the wine.
4. High-quality images of the winery.
5. Customer reviews and testimonials.
6. Link in your winery’s Social Media channels.
7. Work on SEO tools to appear on top of the Google search.
Once your website has everything mentioned above, you will automatically draw a lot of traffic and eventually customers.
E-commerce is an essential part of the website and the main source of online DTC sales for the winery. Since the pandemic, a large chunk of the population moved from in-store purchases to online purchases and the same happened with wine. Online wine sales grew immensely in 2020 and 2021. According to the Nielsen Report, wine accounted for 68% of the online wine sales in 2020 in the US as compared to Spirits(18%) and Beer (13%). A few points that can help you to increase your sales through e-commerce are:
1. Have an interface that is easier for the customer to understand and make a purchase. This will make the consumer make a quick and easy purchase without thinking twice.
2. Have your billing platform because that can help in building a stronger relationship with the customer as they would not have to go through a third party to make a purchase.
3. Offer discounts on bulk purchases as that can make your customer come back again for more.
Image Source: L'Ecole.com
3. Winery and Vineyard Visits
Although with the pandemic the winery and vineyard visits were slowed down, they proved to be the point of most DTC sales for wineries. Winery and Vineyard tours can help you build a direct relationship with the customer and understand them better. It enables you to interact with the customer and talk about your winery and wines to them which may not be so interactive when done online. As a winery, this is your major point of DTC sales, thus it is important to focus on a few aspects when it comes to winery and vineyard visits.
1. Make sure you are getting to know your guest and their background so it can help you to understand their purchasing power
2. Tasting Rooms are a very important place to talk about your wine and provide an experience to your customer. Make sure you are providing the best experience to them because word of mouth is another great tool of marketing.
3. Share stories and talk about the history of your winery, it keeps them intrigued and they want to know more.
4. Finally, collecting your customer’s data and following up with them is important to build a strong relationship. Make sure you collect their email, follow up from time to time and share new offers. Also, make sure you don’t spam their mailbox, nobody wants that.
4. Effective Marketing Plan
Having an effective marketing plan is an essential part of any business. Chris Oggenfuss, a DTC Marketing Veteran, shares some interesting insights about the importance of having an effective marketing plan and how to build it. He mentions that it is important to create a great experience for your customer, focuses on data collection where you get the customer’s email somehow or the other, and finally have a database software for customer relationship management. A compelling marketing plan will have everything from an interactive website to social media channels, customer relationship management, and a lot more.
Social Media Marketing
Image Source: Instagram - E. & J. Gallo Winery
The use of social media channels is spreading across wineries especially since the pandemic. 90.7% of wineries in the US use social media to increase their digital presence according to the 2021 SVB DTC Wine Survey Report. Social media channels are a very important tool to interact with your customers, build a new customer base, and also reach out to consumers outside your region. Thus, it helps you to increase your global presence and allows your brand to be present 24/7. The right way to employ social media channels to increase your DTC sales are:
1. Have an interactive social media page on Instagram, Twitter, and Facebook where people can relate to the posts.
2. Post customer feedback and testimonials.
3. Interact with your audience through quizzes, polls, and giveaways.
4. Hold competitions and giveaways to keep them involved.
5. Give live updates about what’s happening in the winery, when are your harvest, and a lot more so they are involved in the winery as much as you are.
Building long-term relationships with your customers are the most essential part of a business. It is crucial to provide value to your consumers through a number of facets. A valuable and loyal customer may not just help you increase DTC sales but also market your brand amongst their friends and families. A few avenues where you can build strong relationships with your customers are:
Wine Clubs - A monthly wine club where you can gather your customers for an evening of wine tasting or have some fun activities planned for them filled with conversations and more. You can hold monthly events from time to time to catch up and build a wine community in your area.
Virtual Tasting - With the pandemic putting too many restrictions, you can send over wines or offer your customers a discount on your wines and hold virtual tastings with them on Zoom. This can be a good way to stay in touch with your customers and build strong relationships as well.
Regular Follow-ups and Feedbacks - Make sure you send follow-up emails to your customers after their purchase with a personalized Thank You note. If you get positive feedback, follow up with them and thank them. If you get negative feedback, engage with them and find a solution for them.
Wine Investment - A very interesting approach to build a valuable customer is to offer them to invest in your wines. If you have a rare vintage that holds a good value, you can offer them to invest in it and offer good returns over time.
Overall, the marketing plan is a mix of everything from the website to holding events. Thus, it is important to focus on your marketing plan to execute and put all the other aspects in place.
Header Image Source: L'Ecole.com
Article by Shreya Kohli, Beverage Trade Network