Driving Personalization in Wine Retail w/ Addie Wallace, Wine.com

As the largest wine e-commerce site globally, Wine.com has been a leader in leveraging technology to sell wine. Addie Wallace, Director of Brand Marketing, gives us insight into how wine.com leverages the marketing funnel to drive awareness and conversion, has built a differentiated offering online, and is pushing the boundaries of customization with their new personalized wine club Picked. There’s a lot to learn about the future of retail in this episode of XChateau! 

Detailed Show Notes: 

• Addie’s background
  • She started her career in finance
  • In business school, led the Wine & Cuisine Society and created a wine recommendation app
  • Completed her WSET Level 3
  • Pitched Wine.com an idea to have a personalized wine club, which she launched
  • Manages brand, customer insights, and subscription businesses for Wine.com
• Wine.com’s history
  • It started as evineyard.com in 1998
  • Acquired wine.com URL and brand in 2001 when original wine.com went bankrupt
  • Key milestones
    • The most extensive assortment of wine in the world, over 17,000 wines vs. ~2-3,000 in a typical wine store
    • Live chat functionality w/ sommeliers (started 6-7 years ago, one of the first to use the functionality) - replaces people in aisles helping you in a wine store
    • Building out physical presence - serves 42 states and DC, can reach 80% of customers in 2 days
    • Working on personalization
    • $355M in revenue in Fiscal Year 2021
• E-commerce trends
  • Believes e-comm growth will continue, but not at the same pace in the pandemic
  • Pandemic showed people they could shop for wine online (built awareness)
  • 2016 study - showed e-comm only ~3% of alcohol shopping
• Wine.com core differentiators
  • Variety / selection - leads to continual discovery
  • Live chat - people are not commissioned, only there to help you find the best wines
  • Convenience - including StewardShip for free delivery
  • Personalization - with Picked, the personalized wine club, and building more personalization into the website
• Marketing channels
  • Uses different channels for different parts of the marketing funnel
    • Top - get people to know the brand
    • Middle - get people familiar with how the brand is differentiated
    • Bottom - use promotions to get people to convert
  • Wine.com does a lot of digital advertising - social media, affiliate marketing, search, Google shopping
  • Each channel is effective for different customer needs
  • E.g., - Google Shopping - good for when customers are looking for something specific
  • Podcasts - for educating people that they can buy wine online and get them to shop at wine.com
  • Search/Google Shopping - has the largest # of eyeballs
  • High ROI - direct mail, the non-digital marketing Wine.com does
  • Discounting / coupons - help with getting customers to convert, promotions need to be structured to attract the right audience
  • Social media - has been challenging, changing regulatory landscape, privacy restrictions, and constantly changing algorithm, as well as lots of competitors using it makes it hard to be winning at it and need to evolve continually
  • Some marketing channels are hard to measure results - e.g., - print media (can use QR codes or promo codes to help track)
  • New channels - spending more time on podcasts, new social platforms (e.g.,-  Snap, TikTok) don’t currently allow alcohol ads
• StewardShip Program
  • It started as a free shipping program, for an annual fee (currently $59/year)
  • It gets consumers to shop more frequently
  • Becoming more comprehensive, like Amazon Prime, more perks to feed the wine lifestyle
    • e.g., -  free tickets to events, both in-person and virtual (gave away 100 free tickets to James Suckling tasting events, 1:1 virtual tasting with the Gaja family)
    • Special promotions and early access to some wines
  • ~60% of revenue is from members
  • Drives high retention rate for members
  • The annual fee pays for itself if you buy 2 cases/year
    • ~$40/case, ~$30/6 bottles to ship normally
• Picked - personalized wine club
  • Launched in 2020
  • Tell them wine preferences, get matched with a personal sommelier
  • Select 6 wines every 1-3 months
  • No two customers get the same thing
  • Leverage tech to make sommelier selections more manageable and more diverse, but lots of human judgement
  • The sommelier writes a personal note for the wines
  • One sommelier could theoretically support thousands of Picked customers
  • Club differentiation
    • Personal element
    • Selection - a lot of new discoveries
    • Only sell “real” wines, no private labels
    • Level of control/customization - price points, frequency, feedback, amount of red vs. white
  • Some overlap w/ StewardShip but primarily targets different segments
    • StewardShip - more self serve customers
    • Picked - people who want more help in selecting
• Other wine.com personalization initiatives
  • Making the largest wine store curated just for you
  • Elevate recommendations and put them in context
  • Use prior purchase data, ratings, and if a wine was added to the shopping cart
• User ratings
  • StewardShip members rate more frequently
  • Send emails to encourage ratings
  • Wine.com App - users more likely to rate
  • Picked members provide ratings to help personal somms
• Leveraging technology to elevate the wine retail experience
  • Recommendation engines, email programs
  • Wine.com App - the store and wine encyclopedia in your pocket
  • Virtual tastings
• Wine.com is likely never to go brick & mortar
  • Would limit the selection available
  • Would limit personalization of experience

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