Ready to grow your winery? Invest in ecommerce

Sovos
November 21, 2019

At the height of the “Amazon effect,” ecommerce has never been so important to the wine industry. New digital shopping patterns, customer expectations and competitive landscapes have impacted the traditional brick and mortar business model. 

Wineries may be slower to embrace this change due to the added regulatory complexities of shipping alcohol and the strong tradition of tastings and showrooms. A robust online presence and ecommerce platform are crucial to further developing your customer base and increasing sales. Small and medium wine producers can benefit from investing in ecommerce to expand brand awareness and stay relevant through content and customization in the growing market. 

Why wineries need a strong online presence

Consumer behavior, across almost all industries, has shifted to rely heavily on online shopping. Shoppers are increasing their online expectations too, preferring customization, personalization, transparency and quick deliveries. Wineries are no exception to these heightened expectations. 

When there are endless options online it’s important for your winery to stand out and deliver a seamless, easy-to-use and visually appealing ecommerce platform. But customer expectations don’t end there. A transparent, efficient and quick delivery experience is also now part of the online shopping journey. Small and medium wine producers should focus on building an exceptional ecommerce platform and delivery operation in order to see substantial growth in sales and your customer base. 

Wineries that have developed a robust ecommerce platform are seeing strong returns. According to ShipCompliant’s 2019 DtC Shipping Report, wineries in the small winery category (5,000 to 49,999 annual case production) dominated the winery shipping channel in 2018, producing 43 percent of the total cases shipped and 46 percent of the value of winery shipments. Consumers are ordering online from small and medium producing wineries, and they’re doing it frequently.

Ecommerce is cost-effective for wineries of every size

Investing in an online presence can be a cost-effective way to market your newest Pinot and find new fans for this season’s Cabernet. It is oftentimes more cost effective to run a marketing effort to drive customers to your online order platform than to staff and operate a brick and mortar location. Using this strategy can increase awareness and outreach to potential customers while yielding higher profit margins.

According to Wine Direct, direct-to-consumer (DtC) sales are still the smallest revenue channel for most wineries, but they generate the highest average per-order value, meaning consumers spend more on their total order when shopping online versus other purchasing channels. 

The DtC channel has the largest opportunity for growth, and wine clubs are a cost-effective way to capitalize on that opportunity. Wine club orders account for a third of DtC sales, Wine Direct finds. Clubs continue to grow in popularity across the industry, regardless of a winery’s size. They are a great way to address growing consumer expectations by offering more personalized recommendations or suggestions for the subscriber.

Overcoming the challenges of an ecommerce strategy

Ecommerce is a key approach to growing and staying relevant as a winery, but it does come with some challenges. With the DtC regulatory environment changing frequently, and requirements varying by state, it can quickly become complicated when trying to obtain the correct licenses and staying compliant within each state. Consumers expect a transparent and speedy delivery experience. This can add to the challenges for beverage alcohol producers.

Adapting an ecommerce strategy will have some initial costs, like adopting and maintaining a great platform and driving traffic to that platform. But without a strong online presence your winery will lose out on expanding their customer base, increasing sales, and staying relevant.

Learn how ShipCompliant can help your ecommerce business remain compliant. Request a demo today.

 

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Author

Sovos

Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
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