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Are Subscriptions the New Wine Clubs?

Wineries large and small consider a new way of providing wine to consumers
by Erin Kirschenmann
May 03, 2021

FROM BAKING BOXES TO bath essentials, Americans have found subscription boxes to be an enticing offer. Companies like Stitch Fix (a personal styling service), HelloFresh (meal kit delivery service) and Dollar Shave Club (grooming products) have been some of the most prominent subscription boxes nationwide, but you could easily find a box for just about any product or service you wanted. Subscription clubs like these offer flexibility, frequency, discounting and discovery of products—and it’s very alluring to a growing variety of consumers.

The model has seen even more interest since the beginning of the coronavirus pandemic, as consumers chose to have frequently purchased products, such as pet supplies, food/drink and health/wellness items, delivered to their doors each month, rather than brave a trip to a brick-and-mortar. Clothing/accessories and leisure/hobby boxes haven’t seen as much interest during this time, according to a CivicScience study, as sweatpants and in-home activities became the norm.

Overall, that study showed 15 percent of U.S. adults have joined a new subscription service in the last year, and the main driver was to obtain savings—discounts on frequently purchased items were the real draw.

More importantly, the CivicScience study backed up the continuation of the subscription trend. A 2019 Clutch survey showed that 54 percent of online shoppers were willing to join a subscription service. In its report on the survey, Clutch stated that “the industry became popular thanks to e-commerce’s growth, social media, and consumer comfort with paying for value over time,” and that subscription boxes are likely to grow in tandem with e-commerce.

Now, if the spring of 2020 was any indication, Americans aren’t afraid to stock up on wine. From pantry-loading and curbside pick-up to first time e-commerce purchasing, legal-drinking age consumers bought a lot of wine. While that increased spending trend has ebbed and flowed over the last year, the fact remains that many consumers are now aware of shopping for wine online, possibly for the first time.

If interest in subscription services has risen and awareness of wine e-commerce has risen, can wine subscription boxes also work? If you ask Winc, First Leaf or Bright Cellars, the answer is a resounding “yes.” All three (and other services) source wines from producers across the world or develop private labels, and send an assortment of wine based on each consumer’s drinking preferences with measurable success. 

To bring in new customers, the three have mastered the art of digital advertising, and regularly appear in ads or sponsored posts on websites and in social media. They offer deep deals on the first box or on a time-in-club basis and offer a wide variety of SKUs. They are essentially wine aggregators—but that model won’t necessarily work for a winery, particularly one with fewer SKUs. Can wineries compete? There are an enterprising few testing out subscription models now, and their hope is that they can complement, or possibly even replace, the traditional wine club.

This article will focus on the ways in which wineries have made strides into the subscription box world. While the models share some similarities, it seems that no winery subscriptions are exactly the same. Each winery has found a unique solution that worked for them and, importantly, for their target consumers. This piece will look at what the club is, how it works, and what differentiates it.

The Pros and Cons

Before we begin, it’s important to note that moving to this model, like any major decision, has some benefits and challenges.

BENEFITS

At the heart of this type of club is personalization: the ability for a member to completely customize shipments to what type of product they want, when they want it. At the same time, curated subscriptions (those that choose the products and extras for you) offer a sense of discovery, providing a customer new and exciting items that are tailored to their preferences. It’s a delicate balance between the two, but one that, if done properly, can make a customer feel like their needs are being met or even exceeded.

“They want to feel special,” said marketing consultant Jennifer Leitman, who said that small to medium wineries shouldn’t feel that they can’t imple- ment this type of program because of limited production. “A big part of this is to get beyond the product. Once you know more about your customer, you can think about what else they are looking for and the partners you can bring to that subscription program.” Are you customers also music fans? Maybe your subscription box also includes access to a Spotify playlist, or limited access to a live/virtual concert, she added.

In a COVID era, subscription boxes can be an interesting way to bring in new customers who wouldn’t be able to visit your tasting room in person. By providing an add-on benefit, such as a discount or non-wine items, they are more engaging than a one-time shipment and, importantly, appear to provide less of a financial commitment to a new consumer than a traditional wine club.

Leitman said that subscription clubs can also help deliver a sense of belonging and entertainment, without anyone needing to physically be present. The smart clubs, she said, are constantly evaluating how they can best deliver on that promise between shipments. With the increased frequency of shipments, there are extra opportunities to communicate with the member, to tell the story and convert more sales.

Subscriptions are also appealing to youger consumers in urban markets, who may not have the chance to visit wine regions. “There’s a lot of pent up demand for this kind of a flexible service that really puts the consumer at the helm of their experience,” said Miia Suortti, director of digital and e-commerce marketing at Ste. Michelle Wine Estates. “The younger generation is either just discovering or has begun to discover wine. They might be still building their taste preferences, so they want to have the ability to discover new wine.”

CHALLENGES

Implementing a subscription club is no easy feat, as many wineries have attested to, though all are excited by the early stages of the program. It is a serious commitment of time and resources, and everyone in the business needs to be on board.

Continue reading "Are Subscriptions the New Wine Clubs?" in the May 2021 issue of Wine Business Monthly. 

by Erin Kirschenmann  

Erin Kirschenmann is the managing editor for Wine Business Monthly and has been with the company since 2012. In addition to production responsibilities for the monthly trade magazine, she writes about business, technology, sales and marketing, and also oversees content and programming for WBM’s symposiums. She speaks on industry trends at numerous conferences, including the Unified Wine & Grape Symposium and the World Bulk Wine Exhibition, and guest lectures on wine, media and public relations. Erin has served as a judge in the international Concours Mondial de Bruxelles wine competition since 2016 and at several regional competitions. She earned her Bachelor of Arts in communications with a journalism emphasis from Sonoma State University. Reach her at erin@winebusiness.com or @erinakirsch.


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