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8 Things We Learned at the 2019 DTC Wine Symposium

Every year, the DTC Wine Symposium addresses the timely issues affecting direct to consumer marketing and sales. Group panels and keynote speakers zero in on what managers need to know now in the context of a rapidly changing sales channel.

Our team identified several actionable takeaways from this year’s symposium. In no particular order, here are eight.

Micro-influencers are misunderstood

At Benson, we engage influencers in “wine-adjacent” lifestyle topics such as home entertaining, décor, and travel to pull new consumers into our clients’ digital ecosystems. So while our clients have had success with these programs, it was fascinating for us to hear DTC managers’ perspective – many complained that micro-influencers are always asking for comp’d tastings! Our suggestion: shuffle influencer inquiries to the PR team or your PR agency for vetting to ensure that consistent brand messages are shared and the most is made from their visit.

Rules governing social media are evolving

Making the wrong move on social media, even accidentally, can result in loss of license or severe fines. Thankfully, Tracy Genesen at Wine Institute shared some important rules and best practices for staying legal on social media. These are the key lessons we walked away with:

  • Put your social media in the hands of industry-savvy professionals you trust
  • Get all stakeholders on the same page on what is and isn’t legal before starting social media program.
  • Don’t assume previous rules are still in effect.

At Benson, our team stays up to date on regulations in the wine and spirit space, better protecting our digital marketing clients. Should you have specific questions about what is and isn’t legal in your marketing campaigns, we recommend referring to The Wine Institute for more information.

Social media is often overlooked

Social media is not always valued as an important part of the overall marketing communication strategy. We heard that some DTC managers of smaller wineries view social media as an optional extra that might be tacked onto an employee’s existing job duties. With this mentality, social is simply not used to its full potential – as part of a comprehensive marketing strategy. Social media can be utilized to strengthen bonds with your existing fanbase, to share time-sensitive information, to encourage online sales and in-person visits, and moreover, to communicate your brand story to a new audience. In planning out your brand’s social media content and putting attention into community management, your holistic marketing strategy is immediately strengthened – as well as your ability to reach a wider (and often, younger) demographic.

The wine industry is overlooking female consumers

… and missing out on the 7 trillion dollars they spend in the US each year. The previously dependable “older male, wine collector” customer persona is increasingly becoming a relic of the past. To keep up with the times, Kristi Faulkner of WomenKind urged DTCWS attendees not to underestimate the buying power, and wine interest, American women possess. If you’re ready to take the jump, don’t assume marketing to women will be similar to your previous tactics. Kristi recommends to:

  • Create an immersive/engaging experience in your tasting room
  • Draw your female customers into the story of the brand
  • Create an emotional experience for her, as it is more likely to be remembered

The key question tasting room managers should be asking themselves is: When a woman walks into your winery, what senses can you engage in the first five minutes?

Creating a personal online experience is key

Commerce7’s sponsor session “3 Transformational Changes Impacting the Digital Customer Experience and How to Apply them to Your DTC Program” hammered one key point home: consumers want to build a relationship with your brand. Some digitally savvy wineries achieve this online through smart member dashboards and segmented email lists. Our take: don’t overlook community management. One of the most direct ways to build camaraderie with your fans is through social media engagement, this includes:

  • Respond to questions or comments received on your social pages
  • Find and engage with social posts where your wines or winery have been tagged
  • Recognize and build relationships with highly engaged fans
  • Support sommeliers that love your wines
  • Pay attention to adjacent topics your fans are interested in besides wine, and work that into your communications

Through well-executed community management, we’ve seen fan growth on social media pages of up to 10% month over month, without any advertising spend.

Winery DTC is maturing

The much-anticipated Wine Direct to Consumer Shipping Report compiled by Sovos and Wines & Vines was released in concert with General Manager Larry Cormier’s keynote speech this year. Larry pointed out that legal winery DTC states comprise 95% of the US population, and the remaining 5 illegal states will not add much to sales growth. So while the growth rates are still in the double digits, future rates are likely to slow.

But there’s still plenty of room for expansion

One could assume that as the DTC category matures and grows at somewhat less-torrid rates than year’s past, the average bottle price would drop. Not so; it rose 2.4% to nearly $40/bottle, which is about 4x the average bottle price sold through the retail channel. And there appears to be a lot of upside outside California, which comprises 12% of US population but a robust 30% of DTC winey sales by volume.

What form will competition take?

While many, if not most, wineries invest in creating experiences for guests, average visits per winery are dropping. Future revenue growth is likely to be less correlated with onsite visitor counts. What does this mean? Probably more flexible and personalized subscription benefits, better digital marketing, and possibly more “in-market” activations such as wine dinners and consumer events.  Certainly it will help to further professionalize the use of existing tactics (email, SEO, etc.), but we believe it will take broader marketing strategies to really move the needle for brands, such as a tighter integration of 3-tier and DTC marketing strategies.

BAM

Brand Awareness vs. Consumer Recommendation: Which is More Important?

If awareness is the #1 driver of brand “power,” and if awareness is driven by shelf placement, what happens to brand power if your brand isn’t on retail shelves?

This was just one of the questions inspired by Wine Intelligence’s presentation this month at Prowein 2018. CEO Lulie Halstead’s research identified and measured the effect of three criteria on brand “power”:

  1. Aided Awareness: % of wine consumers aware of a brand when shown its logo and name combination;
  2. Purchase frequency: number of times the consumer bought the brand in the last 3 months; and
  3. Recommendation rate: % consumers who would recommend it to a friend.

The rise or fall of these three criteria were measured for specific volumetric brands and, over a decade, the rise in aided awareness was dramatically higher than the rise in purchase rate and recommendation rate. Let me say that again: for successful, volumetric brands, awareness grew much faster over time than did purchase frequency and recommendation rate. In the U.S. between 2007 and 2017 Barefoot’s aided awareness rose from 27% to 71%, while its purchase frequency (31% to 37%) and recommendation rate (40% to 43%) rose more slowly.

The findings for power brands held true across thousands of consumers and 15 countries.

So what’s going on here? I’m afraid we have more questions than answers, but bear with us.

It’s not surprising that awareness drives sales. Duh. But conventional wisdom and a lot of research claims that peer-to-peer recommendations are the #1 driver of purchase, or at least intent to purchase (what people say in surveys and what they actually do can differ). Wine Intelligence’s research contradicts this notion: it claims that visibility has a larger positive effect than other factors for power brands like Yellowtail, Barefoot or Woodbridge. The other factors, purchase frequency and recommendation rate, are important but grow less than awareness does for these successful, volumetric brands.

So what drives brand awareness? At Benson, we grapple with this every day. We would posit that wine brand awareness is a function of press coverage, digital presence, advertising, shelf placement and ACV, and packaging, among other factors, and in no particular order.

Now, back to the original question: how are these drivers of awareness changing in a dynamic marketplace?

  • Imagine if 15%-20% of off-premise sales move to the home delivery model. That would decrease the potentially positive effects that shelf placement, ACV and packaging have on brand awareness, even if the delivery platforms offer brand advertising.
  • What about digital? If awareness trumps recommendations, digital spend should maximize reach and frequency at the expense of engagement (think Facebook ads versus clever boosted posts). That conclusion will be sacrilegious to many.
  • What about DTC brands? Of course, this study doesn’t directly address DTC, but it suggests what we all know: DTC brands rely very heavily on creating consumer connections, or “affinity,” as Wine Intelligence calls it.

And a final, humbling note: Even when prompted with a wine logo and name, the average number of wine brands a US consumer could identify was only 17, and for France the number was 8. Time to roll up our sleeves and get to work.

Taken from the presentation, “Global wine brand power and consumer trends,” Lulie Halstead, CEO, Wine Intelligence. www.wineintelligence.com