Market Watch, September 2018

38 MARKET WATCH MARKETWATCHMAG COM SEPTEMBER 2018PHOTOS BY TOP SONYA REVELL BOTTOM SHANNON STURGIStechnologies and the right people notes Sandra Hess who launched the consulting agency DTC Wine Workshops in 2014 Years ago wineries would just find a warm body stick them in the tasting room and have them do what they could on the direct side whether managing the online store or improv ing processes Now its about finding a more sophisticated manager to head up the DTC channel Theres training and more strategic plan ning how to leverage strategic plans and tools to change the bottom line not only in person but online as well Wineries are also seeking frontline staff members who under stand hospitality management Hess adds that wineries are also taking a more analytical approach Data analytics at the DTC level are everything she says Were constantly looking at analytics in different buckets first time visitors versus repeat versus club and member segment For us the foundation must be built on knowing how to segment your data properly and how to provide meaningful opportunities to re engage within each of those segments Other steps could include using that data to proactively pursue customers Instead of waiting for people to come to us we do outreach using big data instead of leaving it to chance says McMil lan Thats another point of development Hess sees an opportunity for wineries not only to attract those customers to their facilities but also to harness the power of brand loyalists who may or may not ever visit the winery The key is to let those who might never step foot in the tasting room self identify through your website Hess says The other piece is once you get to that point how do you leverage your brand ambassadors How do you establish a formal brand ambassador program to let your loyalists do most of your marketing and sales for you As suppliers grapple with their next moves others are taking baby steps into DTC But most agree that it will continue to gain share in the coming years McMillan goes so far as to say its crucial for survival For all the regions in terms of sales its not a choice McMillan says A tasting room is survival If you dont have one and if you dont have direct to consumer as the focal point of your winery youre going to fail When direct wine shipping was being analyzed in the early days of the new millennium there was a general consensus it would likely plateau at 5 of the total wine market Fast forward 20 years and it appears to have surged past that level with room left to grow The combination of winery DTC plus retailer three tier e commerce can absolutely reach a 10 share in the long term says Rich Bergsund CEO of online wine retailer Wine com If we do this right a lot of that 10 will be incre mental industry growth inspiring new younger consumers to discover the wine lifestyle Cormier of ShipCompliant cites a poll of state regulators at a recent Napa convention that showed they expect wine shipments to consumers to one day exceed 25 of the market Thats the way the world is going he says Its about convenience and accessing something you cant get at your local retailer Wine can be a difficult category to bring online but the benefits to online engagement for the consumer learning and purchasing are very powerful Bergsund says That will drive major growth in online retail mwPeter Mondavi Jr of Charles Krug Winery pictured says the wines he sells through DTC are complementary to those sold through the three tier system as theyre small production labels that often feature unique varietals As DTC participation grows many players including Mel Dick of Southern Glazers pictured are highlighting the importance of the three tier system They maintain that direct shipping models are better off working within the existing system