Draw on Data for Efficient Wine Sales

Experts reveal how best to use sales and customer data at revamped WITS show

by Andrew Adams
wine industry technology symposium dtc direct wholesale sales
Attendees prepare for a session at the Wine Industry Technology Symposium in Sonoma, Calif. Photo: Scott Summers
Sonoma, Calif.—These days, companies have the means and the power to use data to their full advantage.

Data collection and analysis was a recurring theme at the recent Wine Industry Technology Symposium (WITS), which took place June 14 in Sonoma. Organized for the past 11 years by co-founders Lesley Berglund and Smoke Wallin along with the Wine Symposium Group, the annual event was acquired by Wine Business Monthly in June 2015, and the show has been refocused to serve as a networking and educational opportunity for primarily winery employees.

The event, held at The Lodge at Sonoma, drew more than 200 people who attended seminars, met with vendors taking part in a “sponsor showcase” and participated in small roundtable sessions focused on specific subjects related to technology.

One of the day’s general sessions concerned data and how analysis can be used to increase direct-to-consumer (DtC) and wholesale wine sales. Jon Moramarco, founder of the market-research and data-collection firm BW166, moderated the panel discussion of experts from different sized wineries.

The panel included Lesley Russel, general manager of 2,000-case Saint Helena Winery; Russell Joy, president and general manager of 30,000-case Patz & Hall (recently acquired by Ste. Michelle Wine Estates in Washington), and Dan Leese, co-founder and CEO of the Sonoma-based sales and marketing firm V2 Wine Group. While the panel members did not spend much time discussing the specific software they use to manage and track business data, all stressed the importance of collecting and using it.

For DtC sales, Russell said there are three key metrics: how many customers you have, how many are buying, and how much each is spending. These metrics can be applied to the tasting room, online sales or the wine club. Several suppliers offer dashboard technology so managers and staff can track these numbers from the tasting room, winery website or wine club. “The bottom line is you need to know your numbers so you know how to improve those numbers in the future,” she said.

Leese said V2 tracks shipments, depletions and accounts sold, which is almost universally tied to depletions and pricing. He said with distributors and retailers consolidating, getting one’s wine onto retail shelves will only get more challenging, and mastering sales data can provide a competitive advantage. “We think data can be an equalizer,” he said. “Even a smaller company like us can compete better against the Gallos of the world.”

He said V2 deployed a price-maintenance system (at great expense) for every SKU with every distributor to see where sales could be improved on the local level. Even if they have store approval for placement, Leese said the company can now can pinpoint which location managers haven’t actually purchased cases and fill those gaps.

Demonstrating such awareness of how one’s brand is performing in the market can make a winery more attractive to the shrinking number of distributors looking to bet on a new brand.

Joy, with Patz & Hall, said it’s important to collect data for key performance indicators and have that information ready when needed. But he cautioned small wineries to consider the expense of premium data collection and analysis, given the importance of investing in the consumer experience. 

When asked about using data to adjust pricing, Russell said the DtC channel offers a little more flexibility to make adjustments, but she that better question to ask is: “How do we give away less to get the sale?”

Using free shipping as an example, she said if you offer it too often, you’ll give the bonus away to people who don’t need it or care about it. A better strategy, Russell said, is to track buying behavior and use targeted comps to get customers to buy up.

Good data enables the winery manager or owner to pinpoint exactly where DtC sales may be lagging and how best to improve them. If tasting room numbers are down, you should be able to determine if it’s from a lack of visitor traffic or from low conversion rates because of poor-performing staff.

Russell also stressed the importance of collecting data from every tasting room visit or sales trip by winery staff. Improved customer relationship management software for email marketing has made a good database invaluable. “You can quantify the value of a database member if you look at your numbers over time,” she said.

Leese said it’s crucial to preserve your margins as retailers and distributors definitely compromise theirs. He said a winery needs to have its product at the right price for the product type and market. “You don’t want to land in a dead price point or category,” he said.

Wine Business Monthly
and Wines & Vines magazine are both owned by Wine Communications Group.

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