BACK
Wine Subscriptions: Leveraging market trends to attract more customers

WINE SUBSCRIPTIONS: LEVERAGING MARKET TRENDS TO ATTRACT MORE CUSTOMERS

A famous sign bearing Robert Louis Stevenson’s famous quote, “Wine is bottled poetry” welcomes visitors to the Napa Valley wine region. It’s a quote of few words for such a prolific author, yet many have tried to interpret precisely what Stevenson meant.

Whatever he meant, one thing is certain–when a consumer discovers a winery brand and varietal they genuinely love, it’s much like how one finds a poet, author, or musician who inspires them. They are likely to seek out and purchase that wine repeatedly–in large part, of course, for the taste and quality. Yet many also seek to recapture their experience when they first tasted one of your wines.

Offering an online wine subscription service or Smart Order Refill (SOR) can help you build your client base, foster a loyal community, and take “friction” out of the buying process. Friction, like wandering store aisles, looking for a wine to delight their palate. Or, as we all experienced during the pandemic when purchasing from a retail store isn’t safe, convenient, or feasible.

Whether you are looking to digitally transform your wine club subscriptions into an online service or make your first foray into building a wine subscription model, it helps partner with a digital solution provider that has helped other vintners succeed.

The wine subscription business model is booming

As wine drinkers became more accustomed to buying wine online, WineIndustryAdvisor.com reports direct-to-consumer wine sales (DtC) increased by 13.4% in 2021, with smaller wineries seeing increased shipping value over the year before. There are wine club subscriptions for single varietals, price ranges, regional clubs, or specialized diets, such as vegan or keto.

Of course, individual wineries, like California sparkling wine producer Domaine Chandon, have been very successful by investing in ecommerce platforms that can support one-time transactions and SOR subscription orders. That winery increased its transaction volume by 256% and its net sales by 259%, in large part due to recurring subscriber sales.

WineBusiness.com research found that online wine sales grew by 12% in 2019 in leading markets, and by another 43% in 2020 during the height of the pandemic. They found that 15% of U.S. adults have joined a wine subscription service over the previous couple of years.

Top online stores in wine and liquor segments in the U.S. in 2020

According to data from Statista and ecommerceDB.com, the top five online stores in the wine and liquor segment achieved nearly US$845 million in sales in 2020. They included:

  • Wine.com ($355 million)
  • NakedWines.com ($207.5 million)
  • TotalWine.com (130.2 million)
  • NapaCabs.com ($94.2 million)
  • MasterofMalt.com ($58 million)

Four out of these five online merchants are primarily wine marketplaces, although Wine.com now sells spirits and Master of Malt sells wine, beer, and spirits.

Modern and evolving wine consumers

The top three countries leading the world in wine consumption in 2020 (by millions of hectolitres) were:

  • The United States (33)
  • France (24.7)
  • Italy (24.5)

Understanding where the largest concentration of wine consumers live, their age range, and other demographic information is vital.

Here’s how wine consumption by generational cohort trended between 2017 and 2020, according to a Silicon Valley Bank survey:

  • Baby Boomers consumed the most wine but decreased by about 4%, finishing at 36.4%.
  • Gen Xers consumed slightly less wine, although consumption increased by 1.3% to 34.8%.
  • Millennial wine consumption increased by just under 4% to 20.3%.
  • Matures (over 75) consumed 3% less wine over time, ending 2020 at 5.4%.
  • Many Generation Zers were too young to legally consume wine in the USA in 2017, but 2.9% did by 2020.

During pandemic shutdowns, wine enthusiasts of all ages grew accustomed to buying their wine online, from chardonnay and sparkling wine to pinot noir and red blends.

Reasons to implement wine club subscriptions

Wine box subscriptions and other models such as glass-of-the-month clubs can help you gain traction with wine drinkers who have experienced your product. Many others are gifted a subscription or subscribe based on recommendations from influencers, friends, or family.

Brand advocacy is essential for any consumer product, and wine is no exception.

Subscriptions increase customer engagement through the distribution of personalized content and word-of-mouth marketing. Branded apparel or glassware can be bundled with monthly wine subscription orders, providing your members with motivation and the opportunity to share their enthusiasm for your product with their family and friends. Your subscriber base is often the most receptive part of your audience to promotional offers, events, and cross-selling of other varietals.

According to wine industry business analyst firm IWSR, online sales of off-trade beverage alcohol volumes should increase to 6% by 2025. American online wine sales are expected to increase by the most significant percentage.

Recurring wine box subscriptions for your existing brands can also give vintners the research and development funds to develop new products or upgrade their processing equipment.

What to consider before launching wine club subscriptions

Like other subscription services, signing up for new wine subscriptions is only the beginning. It’s critical to retain those subscribers and motivate them to share their love of your products with their nearest and dearest.

To effectively prepare to launch your wine club subscription service, you must:

a) Define your core objective–do you want to drive awareness or long-term revenues?

b) Set your wine club subscription structure and club tiers for novices and connoisseurs.

i. Can you support buying online, pick-up in-store, or will you ship all products to members’ homes?

ii. Will you charge for shipping, or will a monthly fee cover it?

iii. How can you drive engagement and retain members over the long term? Should you hold events, distribute a newsletter, or create content such as recipe pairings?

iv. What communication channels will you establish to be responsive to customer demands and market changes?

c) Choose an ecommerce implementation partner and a secure, reliable, innovative ecommerce platform that can support customers to buy wine online or sign up for a monthly wine subscription.

Start uncorking your own subscription wine clubs

A wine club subscription can help you get more customers, provided that your winery offers quality products that appeal to a diverse audience of wine enthusiasts. To gain and maintain a competitive edge, you should offer varietals that align with consumer demand, quality, and safety guidelines. In today’s fast-paced, information-rich economy, earning and sustaining consumer trust and engagement can be challenging. Wine ecommerce success starts with creating an innovative, engaging, on-brand online presence.

To nurture your wine box subscription business, you need to foster multi-channel communications between your winery, customers, and strategic partners. Your member subscribers often look to participate in onsite or virtual tastings, tours, or entertaining events to foster customer loyalty. OSF Digital’s Quick Start program can help you get a running start.

Discover proven strategies for deploying and managing your online wine club subscription service in our recent whitepaper,
Wine Subscriptions: Attract, Engage and Delight Your Ecommerce Customers.