Sunday, March 6, 2022

Internet Sales are dramatically higher, but how do we know?


Selling Wine in a Pandemic

What an insane past few years! But doesn't it feel wonderful to be moving into spring and at the same time into the endemic phase of this crisis? With fewer mask mandates now, maybe we'll be able to smell the spring flowers! But before we linger too long on the warmer days ahead, we still have some work to do. So let me take you back to the start of this crisis in 2020 when the COVID case numbers began picking up. 

At that point in time, I wrote a piece called Selling Wine in a Pandemic which is one the most-read pieces I've posted. I wrote it on March 15th, 2020 - a date that is etched in my mind and probably yours if you live in California. 

If you don't recall, that was the date Governor Newsom first issued the shelter-in-place orders and closed tasting rooms, restaurants and bars. I finished writing that blog on March 15th in the morning, but by late afternoon, I had to go back and update it when news of the lock-downs came out. 

I made several suggestions within that post on sales and marketing, including the following:

Use your marketing imagination and messaging to get consumers to buy online. It's a less expensive way to sell. And while you're at it, see if you can get new club signups in the process. There are many ideas to consider that may drive new behaviors including coupons, discounting, free tickets to future events, and gift cards that could be used on the next purchase. Figuring out how to direct people to online sales will continue to pay off even after this situation fades from the news.
That suggestion proved to be good advice as online sales that languished at 2% to 3% of total direct sales before the pandemic, exploded upward to 16.2% of direct sales at the start of 2021 (headline slide).  And by the end of 2021, I was able to report that average sales increased 21% over 2020, while internet sales managed to maintain their relative strength as a percent of sales.

That means total internet sales were also dramatically up in 2021. I also know that based on this newfound success, wineries are increasing their investment in e-commerce, and are discovering new strategies to pull club signups from that channel. Today, the tasting room isn't the only place to gain new club members. How do I know all of those facts?

Successful wineries benchmark their performance!

I'm able to diagnose what's happening because each year, Silicon Valley Bank partners with wineries across America to conduct a survey. We now have over a decade of data and information from which we can report nominal statistics and decipher trends.

We already know that wineries had a remarkable year of success in 2021 - particularly if not almost exclusively in the premium segment. We know the mix of wine consumers is changing with new younger consumers possessing different values and financial capacity, replacing the boomers at a rate of 10,000 each day. 

We know wineries moved to by-appointment models in the tasting room during the pandemic, and have stuck with that choice (nearby slide), and that some wineries had tremendous success in 2021. But what happened within the sales channels? Where is the opportunity between online, wholesale, export, events, phone, club, and Zoom sales?

The 2022 Direct to Consumer Survey is Open now through March 18th

This time of year, I get my hands dirty by surveying U.S. wineries and digging into the direct-to-consumer channel to produce benchmarks so the industry can make informed decisions and answer questions like the last one above and many more.

The 2022 DtC survey is now open and will close on March 18th. I hope you will join the other 600 to 1,000 U.S. wineries and avail yourself of this opportunity to improve your company.

In May, all respondents who complete the survey will receive high-level analysis, benchmarks, the videocast deck of slides, and the complete sanitized respondent data, anonymized of all personal and business identifying information. 

You Can't Get The Survey Results or Presentation Slides Without Participating

Only survey participants will get this information. It can't be purchased. At the end of May, we will broadcast a two-part videocast to the industry and go over the new findings with other industry experts, but we will not be releasing the slides from the show - unless you participated in the survey.

All of our efforts are done on a gratis basis to help the industry make decisions, but it's a partnership with you. If we don't get survey responses, we can't produce this industry resource. So please make this a personal goal to participate. The choice you make regarding your participation in the survey will have an impact both on your operation and the industry as a whole.

This year the survey has between 24 and 33 questions, depending on your business model. It should take you between fifteen to twenty minutes to complete and even less if you are a little prepared. If you would like to see the questions in advance, you can download and print them here.

Are you ready to participate in the survey this year?

Please promote this post on your favorite social media platform, or even better - please forward [this link] to your winery colleagues and ask them to participate. It does take everyone's effort to make this outreach a success.

If you would like your AVA to participate, we will also send the participating AVAs free regional benchmarks for their own use, presuming we have a statistically significant sample size to analyze.