On Tuesday, February 20, ShipCompliant hosted a webinar, “eCommerce Trends to Watch in 2018.” In the webinar, we were joined by Jim Agger, VP of Marketing and Business Development for WineDirect, who gave an overview of the complicated eCommerce arena, providing tips and solutions that wineries can use to maximize their direct-to-consumer (DtC) sales. Customers are increasingly deciding to make purchases based on their at-sale experience. To help wineries with this, Jim discusses many ways they can improve both the online and tasting room experiences.
The webinar also featured ShipCompliant’s own Alex Koral, who discussed compliance issues affecting the eCommerce arena, and for DtC wineries in particular. This included an overview of the current state of online sales tax regulation, and a look at Alternative Delivery Solutions (ADS), which some carriers are offering to ensure a safe, compliant, and timely delivery experience for their customers. These ADS include storefronts and warehouses, where the carrier can hold packages until the customer is ready to them pick up.
The webinar has been posted online, and is available for your viewing here. Below we have compiled answers to some of the more common questions that came from the webinar’s audience, plus some that we weren’t able to get to in the webinar — the responses were provided by both WineDirect and ShipCompliant.
How can we best manage our customer expectations when it comes to delivery costs? Are there any tips you can suggest we can use to explain why something like “free shipping” is not something we can offer?
We see the best success with clients who offer shipping included or flat rate shipping. Consumers just aren’t used to paying over $10 for shipping anymore, and we see conversion drop sharply at that price point. Many wineries set minimum quantity thresholds to qualify for reduced or lower rate shipping – e.g., $5 shipping if you order 12 bottles. No matter what, we recommend being very transparent and up front about the shipping costs. Add language to your store, product pages, your shopping cart page (before checkout) to reduce confusion and sticker shock at checkout.
From a compliance perspective, you should also be aware of any limits on what you can offer your customers. Some states, California in particular, may see something like “free shipping” as an improper inducement, and would prohibit you from offering that outright. While it may be complicated to explain this to your customers, it is something to consider.
Do you have any best tips or tricks on collecting customer data? What are the most important data points we should collect, and what are the best methods for getting that data in a useful format?
The best place to collect data is in the tasting room, and the email address is the single most important data point to collect. Without the email, you can’t get in touch with them again.
Ideally you should be using a POS system that integrates with your Customer Relationship Management software (like WineDirect), that way all transactions will be reflected in the customer profile, and you can easily capture and associate data in one step. If you’re looking to survey customers or club members, tools like SurveyMonkey are free (or very low cost).
Do you have any thoughts on how non-winery subscription services, like the NPR or WSJ wine clubs, are affecting winery-based DtC sales?
Certainly clubs like this compete for consumer wine dollars. As modern clubs proliferate and offer more choice, flexibility and (of course) free or heavily discounted shipping, consumers begin to expect those things as the norm. This is why we say rising consumer expectations are the biggest challenge facing wineries today.
Can you share any specific data on what strategies and activities succeed for wineries setting up online markets (such as how often getting an email leads to further sales)?
In general, emails on the WineDirect platform convert at 2.75%. That means for every 10,000 emails you send you will get 275 sales. Our “Thank You for Visiting” email converts at 7.5%, almost triple the average rate. This is the single most effective email you can set up to send to every new person who visits your tasting room. Implementing a loyalty program is also a great way to encourage customer loyalty and keep them coming back for repeat purchases. WineDirect recently launched a Loyalty Points program that enables wineries to easily do this, and we’ll have case studies soon that illustrate how it’s working for wineries.
How can I begin using Alternative Delivery Solutions? What options are out there, and where are they available? How about using the postal service (USPS)?
The first step in using Alternative Delivery Solutions (ADS) is talking to your common carrier, who can detail when and where they offer such a service. Even if your carrier offers an ADS, it may not be available everywhere you ship to. For instance, If the carrier works with an independent storefront for their ADS service (for instance, with FedEx and Walgreens), you’ll need to confirm that those stores are set up to handle your packages. Carriers working with the DtC market are well aware of your compliance needs, but it’s always best to talk it out with them before you begin using any new service. As for USPS, it is currently illegal for them to accept any packages containing alcohol — there is a bill before Congress to change this rule; however, it is uncertain that that bill will go anywhere soon.
How should I report orders that involved an Alternative Delivery Solution? How should I set up my order management tools to capture all the information I need?
When using an ADS, it is important to note that the delivery is not complete until the package makes it to the customer’s home. The ADS is there as an expedient, allowing the customer to affect the last leg of the delivery on their own. Therefore, for compliance needs, the customer’s home address should be used as the address of record. This applies to such issues as what is the proper tax rate, whether any purchase limits are triggered, and what address to report. It is vital, then, to always capture your customer’s address with every order you make. This could be made part of setting up an account, or could come from other data you collect (perhaps the bill-to address). At worst, it should just require asking your customers to provide a little more information at checkout. This may be a bit of a pain point for them, but it is critical for your compliance needs.