What a wonderful service spearheaded by Rob McMillan, Founder of Silicon Valley Bank Wine Division as he joins forces each year with Cyril Penn, Editor at Wine Business Monthly to survey tasting room managers across the nation and now includes respondents from Canada and Australia. There were 1179 respondents, a significant increase from the 839 total responses in 2016.
I am encouraged by the results of this years survey as consumer demand continues to show us that high-touch reservation style tastings covert at much higher rates by both average order values and conversion to club stats. There’s a lot of information to review in the one hour replay provided below so I thought I would take a moment to share with you what I think the top 7 NUGGETS are from the 2017 Silicon Valley Bank/Wine Business Monthly Direct to consumer Survey. This is actionable information that I hope you find helpful in successfully executing a direct wine sales strategic plan.
- According to the survey respondents, 61% of sales fall within the direct to consumer sales channel. This is a significant number and may indicate that most respondents represent small to mid-size wineries where we tend to see more focus on direct wine sales initiatives. How does this compare with you numbers for the past year?
- 80% of direct wine sales come through tasting room and wine club. Not completely surprising as this is where the magic happens BUT there is a lot of room for growth in e-Commerce sales throughout the year. I would like to see this number more like 40% (online repeat sales form connected consumers) and 60% tasting room and club as this is where you have already connected. Getting club members and super fans to reengage throughout the year in you online store is going to be key in not only bottom line growth but also customer retention.
- Average order value of a Reservation Tasting (private or formal) is $461 verses $75 at the tasting room bar. This is HUGE! This number increased from an average value of $395 according to the 2015 survey results just two years ago. Consumers continue to demand MORE high-touch interactions with your wine brand. Are you giving them what they want?
- What about club conversion from the same style Reservation Tastings above? The numbers are shocking at 23% on average verses 6% at the tasting room bar. If you are not providing some sort of option for a reservation style tasting, now is the time. Get creative and start small if needed. Space and the right talent are two requirements to successfully provide elevated tasting experiences. This is something I am truly excited about so if you have questions, contact me at: email@example.com.
- Average length of a club member is now 30 months. This is an increase from 26 months last year and 24 months in 2015. WHY? I see winery teams throughout the nation embracing CRM (customer relationship management) tools and staying better connected in between visits. Building 360 Degree Customer Views for loyal and long-term customers is paying off.
- Average club growth rate came it at 30% with Sonoma taking the cake at 33%. I think this is a direct correlation to the winery teams offering more high-touch experiences. Is this true for our respective winery?
- One of the most significant nuggets of information from this year’s survey is around Member Lifetime Value. This number came in at $1881 average lifetime value verses $1280 from last years survey. Now there are quite a few variables to consider here around respondents makeup so we should look at this as a simple baseline. I encourage you to look at how this compares to your numbers for the past two years.
I could go on and on about key findings from this year’s survey and compare that information to real-time data from my clients throughout the nation, but who has time for that? Enjoy the VideoCast replay below. If you are ready to build a successful Direct to Consumer Strategic Plan for 2017 onward, let’s connect.
Wishing you continued success!
Sandra Hess, founder DTC Wine Workshops