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Susan DeMatei
January 30, 2018 | Susan DeMatei

2018 Predictions for Winery DTC Businesses

We've turned the page on the calendar, and are already plunged into another year. Here are my predictions for changes to the winery direct marketing landscape this year.

Shipping will continue to morph into an absorbed COG

Amazon has universally changed the online retail business model by encouraging free shipping. And now, it seems that shipping is expedited on most orders, so free shipping now arrives within 1-2 days. It's hard to compete with "free" and a frequent question from wineries is how often, or how much, they should discount shipping. Here's the problem with that question: Amazon takes a loss on shipping. The amount of money that Amazon lost on shipping — a.k.a. the net cost of landing all those brown boxes on your doorstep in record time — reached an all-time high of nearly $7.2 billion in 2016.

In fact, they only cover half their costs. Why do they do this? For volume and loyalty (Amazon posted an overall profit of $2.4 billion in 2016).

So, what does this mean for wineries? It means that shipping is becoming a cost of good (COG) just like your glass, your labels and packaging. You don't pass along costs for the cardboard shipper box, or the glass the wine is in, so why do we have a culture of passing through the shipping charge?  Maybe your MSRP has a slight increase, or the profit margin takes a slight hit, but the wineries that figure out how to manage shipping charges for their e-commerce and club businesses while keeping it out of the consumers' sight will be the ones on top.

Facebook is the dominant advertising vehicle

One out of every five pages served up on the internet today is a Facebook feed or page. 83% of Women & 75% of Men Use Facebook and they spend an average of 35 minutes a day on the platform, visiting it around 8 times a day. Not since the 1950's when there were just three TV networks has there been one, single location to target an audience with this massive reach. But it gets better. Facebook knows what you like, and where you live, and what your friends do, and what you talk about. Facebook knows you. Creepy, but data nerds like us just love the targeting capability. So, not only is there a large pool to choose from but for a relatively modest amount, you can get your message to a precise target with very specific geographic, demographic and psychographic criteria. 

So, what does this mean for wineries? It means that your "social media marketing" isn't just remembering to post on your page twice a week. If you're not taking advantage of custom audiences, retargeting and other Facebook ad tools, you're missing a massive opportunity to get your message out.  Marketing campaigns that use mail and 1 or more digital media often experience up to 118% lift in response rate. So, the smart wineries will be the ones with integrated campaigns, and who upload their lists into Facebook and target accordingly.

Mobile is the dominant online channel

We've been talking for a while about the importance of mobile - but in 2018 it literally will take over. In this year, 80% of internet users have a smartphone and they'll spend 69% of their online time on the phone. 79% of emails will be read on a phone and 80% of social media time is on a phone. Having your online content optimized for mobile viewing is no longer a suggestion, it's an imperative. 

We are seeing this demonstrated online everywhere. The mobile "hamburger" three bar expanding navigation is now becoming more prevalent on websites. There is no more "above the fold" so scrolling websites are the preferred content layout. And, column and table layout is a thing of the past. Most dramatically is the move toward graphics and away from text. With smaller screens and shorter attention spans, our communication preference has overwhelmingly swerved toward pictures. (Research suggests visuals are processed 60,000x faster than text!) 

So, what does this mean for wineries?  Images matter in social and digital media. This means stop taking poorly lit photos of your wine. Stage the shot so that it entices the viewer to click and interact with your content in a 2" space. Make your headlines large and graphic, and shy away from tiny silhouetted shots with labels you'd need a magnifying glass to read.

So welcome to 2018 - we hope these ideas are helpful to you and that you have a great year!



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