A look back at Direct to Consumer for the wine industry but others take note

I published a blog post titled “DTC Wine Shipments are growing at a record pace. How long will it last?” in April of 2017. In it, I wrote about the euphoria around a 17% increase for DTC shipments the previous year. Several years before the pandemic, DTC was growing rapidly and Covid-19 gave it additional fuel as drinking at home became the norm. According to Sovos Ship Compliant, the value of DTC shipments grew nearly 15% in 2020 and then another 13.4% in 2021. Wineries built up their DTC departments and email marketing turned into an absolute blitzkrieg upon wine-loving consumers. Sales flattened out in 2022, declined in 2023 and another decline is predicted for 2024.  While some prognosticators are believing a comeback is upon us, long-term evidence has yet to arrive. 

What happened?

I think we can attribute the flattening and then decline to three factors:

1. The end of the pandemic saw consumers returning to retail stores and we now see more mixed-channel buying than before.
2. A changeover from Baby Boomer dominance among consumers to Millennials and increasingly Gen Z who are cross-category drinkers (i.e. they switch with ease from wine, to spirits to beer to low or no-alcohol drinks).
3. The increasing volume of email and its declining performance. There are 350 billion emails sent globally every day, up 30% since 2017 and expected to grow another 14% by 2026. Of course, not all of them are wine-related but you get the picture.

I was thinking about these factors and went back to look at the article from 2017. I gave two examples of typical cases where people initially bought wine online but didn’t return for a follow-up purchase and offered five steps to ensuring that wineries pay attention to building consumer relationships versus constantly pushing transactions in multiple emails. Those five steps are even more relevant today. They’re not complicated. They require a few small changes in processes and now as opposed to then, some platforms can deliver. Ours is a 1:1 marketing at scale platform that does all of them.  

1. At every point of contact with your customers, ask for an email address. That includes social media and digital advertising which should link to a landing page where the information automatically appends to digital files and measures each tactic’s performance.
2. In addition to asking the usual on landing pages. Ask two or three questions that will help you determine each customer’s specific interests in your wines. You’re getting them at their peak interest in you. Now show that you’re interested in them. You can’t build a relationship with them unless you know  what they want and why they signed up. 
3. Every person who signs up should receive a thank-you email with one or two more questions in it. Think about getting to know a new friend. What do you want to know that’s going to better inform you and help them get more from your winery? Anything you learn should append to their database file.
4. Segment your list by customer interests and other information you’ve gathered. Rethink your process to be (1) Recruit, (2) Educate, (3) Convert, (4) Retain.
5. Measure your relationship with tools like Net Promoter Scores (NPS) that can tell you if they’d recommend your brand to their friends. NPS questions also gather language which should help build out their personas.

Our clients do all of these things on our platform. It puts 1:1 marketing at scale into practice and makes all of the above easy. There are ways to cobble together custom systems that do little bits of each process but they are time-consuming and inefficient. Why clutter things up? You’re not a data expert. You’re building relationships that will build sales.

The euphoria of previous DTC growth has become more sobering today. It’s hard work but it doesn’t come from just communicating more. It comes from communicating smarter. 

Lastly, take a look at my old blog post. If you think I’m wrong, I’d like to know. If you’d like to see what our platform does, I’d like to know that too.