Message In a Bottle - D2C Wine Sales

“in vino veritas”

?

I never spent any time in D2C sales. As a consumer, though, I have experience, and I find some aspects appalling, others irritating, and a few fascinating. Since direct-to-consumer sales is a business model based on the sale of products to the end customer without intermediaries, I get to interact directly with the producer or manufacturer, either in person or through their own eCommerce channel.

To the producer or manufacturer, the D2C business model offers a variety of benefits, things like:

• More control over price and a higher gross margin.
• They can sell with their brand story, not just with price and label design.
• More control over the packaging and shipping.
• More agile and direct in developing and testing new products and services.
• More customer data.

As there is direct interaction, similar benefits exist for the consumer. For me, most memorable and beneficial are the D2C purchases I make in person. Like buying a piece directly from the artist or craftsman (https://lisaburge.com/), visiting a local bakery and learning how they are milling their own flour (https://www.slobreadbike.com/), or understanding the impact of weather on the availability of fruits and vegetables at our farmers market (https://www.slocountyfarmers.org/); each experience gives me:

• appreciation for the work that went into the product,
• allows me to recount and re-tell the story,
• gives me a sense of giving my money directly to the source,
• and I feel my input and suggestions are actually being listened to.

The majority of wineries today focus their business model on growing their direct-to-consumer business. At the core of that strategy is converting winery visitors to club members, where they will receive extra care, focus, and attention to retain them as loyal customers. Wineries selling direct-to-consumer yield higher profit margins than sales to wholesalers. For small businesses, this opportunity is even more significant.

So, what motivates people like me to join a winery club? Here are a few reasons, some representing a professional view, some a more personal one (and please do not judge); some speak to the quality of the people, and some are circumstantial:

• Deep discounts on wine purchases. It might be a 20% or 30% discount applied on a seemingly high list price. Buying at list seems crazy.
• Proud to be a member. A club is perceived as exclusive and trendy. It also offers a sense of belonging, and that is a powerful motivator to anyone.
• Scarcity. Small wineries have limited production that is allocated for club members only, another powerful motivator. The winery may offer a few of its top wines on an exclusive basis to club members as a tactic to motivate buyers.
• Exclusivity. Especially the wines of smaller wineries are unavailable through retail channels or in restaurants. The only way to buy them is at the winery or through the wine club.
• Location. I have yet to visit a winery that is in an ugly location. They are all stunning, with great settings, amazing views, as well as features like caves and food pairings.
• Parties and more. Every club has more to offer than just wine: release parties, grape stomping, vacation homes, etc. Club members feel like they’ve discovered a hidden gem that gives them a sense of accomplishment.
• Being treated well. All B2B salespeople take note because it is a powerful motivator when exemplary hospitality skills come into play. The cost of an extra glass of wine is marginal compared to the value gained over the years from a new club member.
• Look behind the curtain. Wine club members are made to feel like part of the family when winery owners, winemakers, and staff get to know them and greet them like old friends. It's great fun for wine lovers to be ‘insiders’ who get a look behind the curtain!
• Discover New Wines. Most clubs offer a service where they?will pick the wine for you based on your taste preferences. Along with being a nice surprise, this also strips out the decision-making process. Week after week, drinking the same old?Rioja?or Sauvignon Blanc? Did you know there are over 10,000 grape varieties?
• Wine makes people happy. This is where alcohol comes into play. The sale happens AFTER the tasting, and even mediocre wine contains 12-14% alcohol.

Frankly, I have fallen for any one of those motivators.