Uncorking The Profits In D2C Wine Selling

Given the unprecedented decline in D2C wine shipments in 2022, America’s 11,546 wineries need to uncork effective customer-acquisition tactics that address such friction points as shipping charges and gathering email addresses.

These are among the main takeaways from a recent webinar conducted by Sovos ShipCompliant and D2C platform Commerce7, which represents 1,400 wineries.

The overwhelming majority (82%) of U.S. wineries are classified by Sovos and Wine Business Analytics as “very small”—producing fewer than 5,000 cases annually—or “limited production” of fewer than 1,000 cases.

Last year, D2C wine shipments by volume fell 10.3%, while dollar sales declined 1.6%.

“We showed the first actual decline in volume shipments in, frankly, the entire history of direct-to-consumer wine shipping,” Sovos regulatory general counsel Alex Koral said at the outset of the webinar.

But opportunities exist because “Most wine consumers are not engaged in direct-to-consumer shipping. They may not even be aware that this is an option.”

Given the time and money wineries invest in on-premise tastings, capturing consumer email addresses and then engaging in remarketing tactics is a must, according to Zach Kamphuis, vice president of business development at Commerce7.

“I’ve heard from a lot of people that visitations are down lately, so it’s more important than ever that you maximize your investment in the tasting room,” said Kamphuis.

“Get the emails so you get a better return on that investment.”

Data from Commerce7 wineries indicate that 24% of customers who give their email address create an online order and 14% will sign up for a wine club.

But just offering, say, a 10% discount isn’t “going to have a lot of value to your brand.”

What’s needed are “meaningful invitations” when seeking email addresses—for example, to be able to send alerts about future events or limited-production wine releases.

To make the online shopping experience as easy as possible, “have buy buttons on your list pages—with multiple products or a list of products as opposed to a single page with a single product on it,” said Commerce7 product marketing manager Karen Urquhart.

With 64% of add-to-cart clicks coming from a list page, “It’s a lot faster and easier and creates less friction for the consumer” than single-product pages, Urqhart noted.

At 49%, “The number one reason for cart abandonment is the cost of shipping being too high [according to the chart seen above]. So the first way to get more carts to convert is to offer penny shipping or heavily discounted shipping.”

It’s possible to “hide” shipping costs by charging $70—plus a penny—for a bottle that a winery would normally sell for $50 and charge $20 to ship.

Urquhart suggested using discounted shipping “as a carrot” by offering it once customers hit a certain bottle quantity or dollar amount in their cart.

“Using carrots to incentivize your customers is a great strategy to achieve and maintain above-average order value.”

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