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FedEx Hold-at-Location option and the wine industry

Delivery option at point-of-purchase may benefit wine sales and consumer retention
by Stacy Briscoe
February 22, 2019

ShipCompliant by Sovos, which provides automated compliance software to the beverage alcohol industry, along with their integrated partner Commerce7, a direct-to-consumer commerce platform, have announced they are now partnering with FedEx.

Customers of ShipCompliant will now have the ability to populate FedEx’s Hold-at-Location options during their website’s checkout process. This feature is intended to enhance the customer service experience of those purchasing wine and other alcoholic beverages online as well as ensure compliance with the latest direct-to-consumer wine shipping regulations.

According to a press statement released in January announcing truvi commerce’s inclusion of FedEx HAL, the delivery company recently conducted a consumer survey that stated 50% of consumers have abandoned an online shopping cart because they didn’t like the delivery choices. Specific to deliveries of wine and other alcoholic beverages, customers are further inconvenienced due to the adult signature required upon delivery—FedEx estimates about 15 to 20% of failed first attempts in the wine industry; return rates range between 2 to 3%.

Larry Cormier, general manager of ShipCompliant by Sovos, said that the timing between ShipCompliant’s technical roadmap and FedEx’s developmental roadmap provided the perfect opportunity for the two entities to connect, develop and test their integrated service.

“This decision was based around our joint customers. A big part of the success of out DtC wine shippers is in retaining customers, whether club members or online purchasers,” said Cormier in an interview with Wine Business Monthly. “In this post-Amazon world, people expect fast, painless delivery.”

Integrating FedEx’s HAL delivery options into an ecommerce platform provides customers of the website with a message reminding them about the needed signature and a suggestion to select a FedEx HAL for delivery if they’re uncertain they’ll be able to receive and sign for the wine themselves. “With FedEx’s third-party locations, people have a choice besides a second or third delivery attempt,” Cormier said. “Those missed deliveries have an impact on revenue. If anything, it’ll cost them in customers.”

The third-party locations include FedEx offices and authorized shipping centers as well as common retailers such as Walgreens, Krogers and Albertsons. Cormier estimates the delivery company has about 18,000 pick up locations around the country.

What ShipCompliant offers in the relationship is the assurance that all deliveries made — whether to a FedEx location or a private home — is in accordance with the specific state’s DtC laws. Customers purchasing wine enter their home address (even if shipping to a HAL location) for age verification, resident validation and for any tax regulations. “Carriers are under constant scrutiny from the state regulatory boards to make sure everything is compliant,” Cormier said. “By partnering with us, they are able to keep that compliance and make state regulators happy as well.”

Ryan O’Connell, co-owner of NakedWines.com in Napa, Calif., said his company’s been using the FedEx HAL service since 2014, integrated through his ShipCompliant platform. “It wasn’t something that necessarily automatically connected back then, but we had the resources,” O’Connell said.

When asked, Cormier confirmed, saying, “Naked built their own link between ShipCompliant and HAL. What’s new is we’ve made that capability available to other producers who don’t have the extensive IT resources available to them as Naked does.”

According to Elizabeth Meyer, vice of operations, people and business transformation for NakedWines.com, over 120,000 of their roughly 165,000 US customer base regularly take advantage of the FedEx HAL options listed at checkout. “We’re proud that we helped pioneer this process,” she said. “And that more small wineries will be able to offer this service to wine drinkers around the country.”

While ShipCompliant does offer integration with UPS’s version of an at-location-pickup, called Access Point, Cormier pointed out that, as of right now, the options are not as vast: most locations are UPS-specific locations, and their total number of pick up points is about 5,000 (compared to FedEx’s 18,000).

When contacted by WBM about delivery options for wine shippers, a representative from UPS stated: “A customer could potentially use a UPS Access Point as all The UPS Stores are approved UPS Access Points. However, the wine shipper would need have an established UPS Agreement for Approved Wine Shippers in place. If customers are using an approved wine shipper, they can select UPS Access Point delivery when placing the order. The other option is for any customers who have a mailbox with The UPS Store may use their address for shipping and The UPS Store will hold their package. Regardless of delivery option, UPS Access Point or The UPS Store mailbox, an ID will be required to release the package.

Two caveats: We can’t ship to every state because of their state laws. In states where we can ship, the Access Point locations need to have opted in to receive these shipments.”


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