If you have a winery, the odds are very good that you are collecting data. But if no one is looking at the data then it might as well not exist, says Crimson Wine Group’s Chief Marketing Officer Lisa Kislak.
Kislak connected with Rob McMillan, Silicon Valley Bank’s wine division executive vice president/founder, for his annual deep dive into data, trends and opportunities for producers. Joining the pair were Tammy Boatright, president of VingDirect—a company that helps family wineries build and maintain wine clubs—and Cyril Penn, editor-in-chief of the monthly magazine Wine Business.
McMillan’s statistics were derived from the 1,000 or so wineries that answered his annual survey. He concluded that, for the average winery, direct-to-consumer accounted for 59% of sales while wholesale distributors accounted for only 34%.
The panel focused on marketing techniques in an effort to better understand why Millennials still have not turned to wine with the enthusiasm of their past generations.
Collecting Data
Since a majority of United States’ wineries have websites and have likely collected the names and emails of visitors. The panel said if these wineries want to reach Millennials, they must go where Millennials are.
But “66% of the wineries don’t have anybody looking at their data,” says McMillan. “If you don’t measure it…”
“You don’t have data,” finished Boatright.
Most wineries already have data, Boatright said, but to make it worthwhile they should go beyond just segmenting it into club- and non-club members. She suggested the Recently, Frequently and Monetarily (RFM) model.
“Recently: When did they last [visit the website]? Frequency: How often do they come? And monetary: How much do they spend?” says Boatright. “So, when was the last time they were here? How often have they come in the last six months? And how much money do they spend?”
The findings allow wineries to tailor experiences to their customers. And with Millennials, that includes adjusting the cost.
Younger generations tend to not have the same purchasing power that baby boomers did when they were in their 30s. Also, in just a few years, almost all the baby boomers will be in retirement age and their spending will likely be affected by living on a fixed income, says McMillan.
The power of Instagram
Wineries must expand their social media offerings, the panel said. This is where Instagram comes in.
Wineries should have the photo-sharing app illustrate the kind of experience visitors will have at the estate by sharing shots of their property, activities and the staff in action.
Producers taking advantage of the platform have a better shot of drawing Millennials to the winery’s doorstep.
“[Millennials] look at the experience as what they’re spending money for. It’s not necessarily the bottle of wine they walked out of the tasting room with,” says Kislak. She adds that these consumers also tend to look for “communal experiences.”
But time is a crucial element as well for this younger demographic, many who have now started families and may not have a few hours to drive to a winery for a tasting that has a high-cost of entry.
Boatright suggested drawing on the Blue Apron or Stitch Fix model, which delivers to the customer’s home.
“We all know how popular those models are right now among that demographic, but they’re not asking for $120 a month, they’re asking for $40 a month,” says Boatright.
McMillan said wineries need to be better at consumer trial, and having success collecting and examining data is vital.
“We just can’t keep doing what we’ve been doing,” he says.
Published: May 28, 2019
