Direct To Customer for Small to Medium Australian Wineries

The Wine Australia Direct To Customer Report 2024 by Georgia Rasmussen has some interesting advice for wineries. It highlights that while growth is slowing, key areas like cellar doors and wine clubs are driving revenue.

What are the key points Wine Australia raise that wineries can build into their direct-to-consumer (DTC) strategy? Let's have a look.

Prioritise cellar door and wine clubs as core revenue drivers

Cellar doors and subscription wine clubs remain the powerhouse duo, accounting for 46% and 34% of total net sales, respectively, in the period 2023–24. For smaller wineries with limited resources, these channels offer high margins and direct customer interaction to build a customer list and loyalty.

• Maximise cellar door conversions: Focus on turning wine tastings into sales, list sign-ups, and club memberships. Your vineyard and your unique regional perspective are your selling point over urban retailers. What starts as a one-time experience can grow into a long-lasting, loyal customer base.
• Strengthen wine clubs: Club members spend more often and generate a higher lifetime value as a customer. They are worth looking after. Club member spending outperforms other customers, even when club growth slows as the club matures. Keep your club members' attention with personalised communications and perks. On this point, make sure that your wine club is easy to explain and that your cellar door staff are confident and enthusiastic to encourage club sales.
• Test dual strategies: Consider supplementing traditional club subscriptions with spend-based loyalty programs. They can be attractive to high-value customers or those who want to cancel a regular subscription. Younger age groups are showing a preference for rewards and benefits earned when spending more.

By doubling down here, you'll build a loyal base that weathers economic fluctuations better than wholesale channels.

Activate under-utilised channels and combat fragmentation

With increasing competition from retailers and other online outlets, telemarketing holds latent potential for high-margin customer outreach. The report shows telemarketing declining to just 1% of sales, yet it holds great potential.

• Reignite telemarketing in-house: Bring this channel back with personalised calls to your list, particularly during slower months. Avoid using third-party telemarketing providers. Calling your own customers maximises your margins and lets you build rapport directly with your customers. Telling your own story safeguards your winery narrative and keeps product details accurate. One winery calls each of its wine club members in the lead-up to Christmas to check in about their Christmas order – customers appreciate this personal attention.
• Optimise website and email: Web and email sales stabilised at 14% post-COVID. These avenues are vital for non-club growth. If your winery has the resources, tailor offers to customers and drive sales in off-peak periods like EOFY or holidays and special events like Mother's Day.
• Explore events: Support events in your region, or collaborate with other venues and host wine dinners. These promotions can boost interest and foot traffic for your vineyard during quieter months. Many people are looking for reasons to get out and about, especially if food and wine are involved.

Activating all possible sales channels diversifies revenue, countering what Georgia Rasmussen states is a 5.8% decline in unique customers.

Leverage demographics and preferences for targeted marketing

The report reveals stark demographic trends: Boomers (born between 1946 and 1964) and Gen X (typically born between 1965 and 1980) drive 77% of sales volume. Millennials (15%) show different behaviours. Gender splits also matter – males buy more reds, females more whites and sparklings.

• Tailor by generation and gender: Gen Z buys heavily at cellar doors and is less likely to join clubs. Target your Gen Z customers with affordable offers sent to a mailing list. For Millennials, focus on a lower average order value for females with value-driven whites and a higher spend with premium reds for Gen X males.
• Balance your portfolio: Diverse varietals will appeal across the widest range of preferences and age groups. Use your data to segment your communications and offers, e.g., red-focused campaigns for males, rosé-style wine offers for females.
• Address the premiumisation slowdown: Use more personalisation strategies to match the expectations of various demographics, such as Gen Z. Although this younger generation may not be drinking as much as older generations, they are willing to spend just as much on premium products and experiences. Elevate your digital strategy with an omnichannel approach using reviews and endorsements to highlight the value and exclusivity of these premium wines.

Personalisation based on these insights can lift conversion rates, increase average order value and extend customer lifetime value.

Invest in data, technology, and resourcing for growth

Wineries that spend money on data tools and tech setups get better results from their direct sales to customers, according to the report. This approach is important for smaller and mid-sized wineries, especially since it can be tough to hire skilled staff in country areas.

• Get into data tracking: Use a simple system called RFM (recency, frequency, monetary) to group your buyers and send them custom deals. Consider how recently, how often, and how much customers buy to shape special offers. This approach can help win back customers who haven't shopped in a while. Customers increasingly expect personalised offers – someone who always buys reds will expect to see offers aligned with their preferences.
• Update your tech: Look for tools that link up all your sales channels without hassle. Keep track of why people are quitting clubs (cancellations increase as clubs get older) and how many are joining (up 3.2% on average), so you can adjust your approach and your offers accordingly.
• Boost skills and stay focused: Have team members focused on direct sales. Map out your business growth path to set practical goals and decide where to invest time and training. These moves can help you handle fewer visitors and tough financial times by turning your customer information into tools for a more targeted marketing effort.

Navigate macro headwinds with proactive strategies

Dips in global consumption, alcohol moderation, and competition from retailers are barriers to growth, but DTC sales show resilience (4% net sales growth) and offer tailwinds like premiumisation and e-commerce normalisation.

• Drive traffic creatively: Boost vineyard visits by offering experience-led events and tourism tie-ins, especially during shoulder or off-peak seasons.
• Cost-effective acquisition: Your winery-generated list is your best asset. Focus on this asset over any broad digital spends. Test occasion-based selling to capitalise on online wine buying trends.
• Prepare for tariff relief: With China's tariffs lifted, monitor for supply stabilisation that could ease pricing pressures.

Staying agile helps your winery thrive in a maturing market. If you'd like to read the full report, check out Wine Australia's Direct To Consumer Report 2024.

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