by Pam Strayer
Aug 10, 2023
Selling wine online got a boost from the pandemic, but it’s not a forever favor, according to digital marketing and sales leaders. Three seasoned experts from LibDib, Vintage Wine Estates and industry giant Southern Glazer’s shared their tips on how to get the most out of digital platforms July 26 at the International Bulk Wine and Spirits Show in South San Francisco.
The panel featured Cheryl Durzy, Founder & CEO of LibDib, a growing distribution company; Jessica Kogan, Chief Growth & Experience B2C E Commerce, Vintage Wine Estates, a company with a 34 brand portfolio; and Robyne Eldridge, Vice President of B2C E-Commerce, Southern Glazer’s Wine & Spirits. The country’s largest distributor, Southern Glazer’s is a $22 billion, privately held company where wine is 45% of its business.
Each came from a different discipline before working in the wine industry, but has spent years learning how to leverage the world of digital platforms to grow revenues.
Among their insider tips: leverage your customer email list to get into new states, make sure you get those content assets out to partners, and tweak digital platforms to upsell during the holidays.
E-Commerce, Email Lists and Distribution Go Hand in Hand
LibDib started from humble beginnings, serving suppliers who had no distributors to build the company. It’s no longer a junior league player, but an industry contender.
”We have probably about 1,200 brands amongst all of our 14 markets or 14 states now,” said Durzy. “My goal is to be in all of them.”
The company is targeting five more new states in the coming year.
“My goal is that any buyer can purchase one case at a time for any brand,” she said, adding that LibDib and others like it have made distribution “almost like a la carte.”
Formed in 2016, LibDib dramatically upped its potential in 2018 by partnering with Republic National Distributing Company, LLC (RNDC), the country’s second largest distributor. RNDC wanted increased access to smaller brands and specialty products.
“The bottleneck [of distribution] doesn’t really exist anymore,” said Durzy, “because now there are options, like us…and so you can get to market,” she said. “You pick and choose the services that you want outside of sales. Sales at this level is entirely on the supplier. So you want to go out and build your sales relationships.
Her advice? “You need to be online, but you also need to be working in the stores.”
How to get there? Gather customer email data by location to leverage it to help you get into new states, she said.
“When you’re doing your ecommerce strategy, especially if you’re just a smaller supplier, you need to also be finding a way to gather your customers’ data,” she said. That will help both with direct to consumer (DTC) sales and with helping retailers see the value of your presence, she explained.
“That consumer data is going to help you to learn where to go next…because you have to go state by state, and you have to decide what states are going to provide the most opportunity for you…And if you already have a customer base, then that’s certainly going to help you expand your footprint, whether it’s on premise or to some of the bigger retailers.”
Example: “If you go to Texas, and you go talk to prospects without having anything in Texas, they’re gonna say, ‘No, thank you.’ But if you go to Texas, and you talk to prospects, and you say ‘I have 400 customers buying my product online in Dallas,’ they’re gonna be very much more interested in talking to you.”
“You need to have your digital strategy and collect your data. You need to know who’s buying your product and where, and then you take that out and use that as your selling point to retailers and distributors. You go to sellers to say the same thing. You say, ‘Hey, I have 500 customers in the state of Georgia, and we just need to do this.’ That’s gonna give you a little bit more leverage.”
Durzy said she never expected to be working with any of the big chains initially, but that’s changed.
“The chains were definitely something that I didn’t think that we would be working with. But we’ve worked with all of them…they do want local small production and products that are that are limited and hard to get…so that’s been kind of a cool discovery.”
Optimizing digital marketing means collecting data to evaluate performance metrics, called Key Performance Indicators (KPIs).
Said Vintage Wine Estates’ Kogan, “The simplest KPI in a direct to consumer business is how many people are visiting my website. You have to think of your URL as your 24/7 piece of advertising. So it doesn’t have to be e-commerce, it doesn’t have to be transactional. But having something out there that is easy to read, and easy to connect with a customer can make all the difference for you. You might have a buyer stop by.”
For her, average order value and cohort data are the biggest KPIs. “We’re always looking at cost per click and the cost of advertising,” she said. “But I would say ultimately, if you are sincere about your transactional site, you have to put the proper thinking and the proper support against it.”
In her world view, digital is do or die.
“Essentially, what digital transformation means is that every company in the next 10 years, if they have not figured out how to build systems for their workers that are seamless, and easy–as easy as Amazon to use internally, as it is for a customer to buy on their site or retailer site–they’re gonna lose. It’s just really simple,” she said.
That’s not only DTC but B2B, she added. Seamlessly providing digital brand assets to retail partners is a must.
“If you are a medium sized brand, and you are selling your product to a Target, or Safeway, you better be publishing your information to their systems. So that you’re supporting your product information is showing up in their systems, that is part of digital transformation,” she explained. “It’s about enabling your people to send information to all of your vendors, all your suppliers, all your partners and your buyers and customers in a digital format.”
Fish Well and Upsell
Robyne Eldridge was recruited to Southern Glazer’s after a stint at Peet’s Coffee, where she and her team grew online sales in two years from $10 million to $40 million. She joined Southern before the pandemic; three months later, online selling became a huge priority and her team grew dramatically, increasing to 35 employees.
“We’ve been tasked with figuring out what is that toolkit we need to support our small, medium and large suppliers. They have different needs. Some of them are using us as a ‘go to’ to really get started, some of them only need advice,” she said.
Eldridge agreed that syndicating content assets to partner assets is critical.
“Certainly as someone who’s been on the marketing side, you want to be excited by the dazzling social media campaign or the sexy brand campaigns. And the reality is, though, that without those basic building blocks, that product content that she [Kogan] talked about, you’re not going to get activated on the physical or on the digital shelf. In fact, Walmart will not turn you on, if you don’t have that basic bottle image,” she said.
That all depends on having a marketing services team that builds that product content, she said.
“[They’re] making sure that you have model shots, label shots, front and back labels, that show the number of ounces–’is that 750? Or is that a 1.5? What flavor is that?’ Because every piece of data that we have, all the stats say if consumers don’t really know what they’re buying [they don’t]…E-commerce isn’t about getting back in your car or driving to another store. It’s so easy to click…in 10 seconds, if you don’t have those pieces, they’re just not going to sell.”
For Eldridge, it’s all about cost per conversion, a number that can change quite dramatically during the holiday season.
“If you understand your customers very well, and you know exactly where to fish for them, cost per lead is the most cost efficient way you get. So on Facebook, throw some ads out, get some email addresses, and it is very highly likely that the return will be great.”
“If you have a group of people, customers who buy your product, fish within their network–that’s how you start…A beautiful thing about Facebook and Instagram and digital is that you can connect to people who know you that’s like think of that as first party, and they start buying your product, and you can see their habits.”
“And once you understand their habits, you then send out ads towards people who are part of their network. So you pick up their chatter and discussion. In my mind, that is the best use of dollars starting out.”
Upping the Ante
“As a distributor, I kind of have two customers, I have a retailer and I have a brand partner,” Eldridge said.
One of the new tactics she’s using for the holidays is to tweak online recommendations and featured products to showcase higher ticket items.
“One of the things…we’re doing over the holidays is really helping retailers figure out how to sell more premium products online…the problem with an algorithm is that it’s just based on…sales velocity, profitability, margin.”
“But what ends up happening is around the holidays, retailers know that sparkling wine should be popping, but their algorithm would naturally serve up those [regular] sparkling wines…but one of the tactics we use kind of break the retailers, like, ‘Hey, you’re leaving money on the table around the holidays, if you’re relying on your algorithm.’”
“[We’re saying] ‘Hey, you have to go in and manually include some of these items like bring in more premium champagne and sparkling wine…[or] you’re missing out on this whole gift thing. Or just boost them more and search manually. Or run more banner ads and advertising.”
As OND (October November December) approaches, Eldridge had some simple advice anyone could use.
“There’s no reason that you shouldn’t be throwing it out there and going crazy because everybody is online looking for gifts,” she said. “And they [retailers] are looking to sell, they’re [customers] looking to buy wine to give people. A very simple tactic…wine bags cost like $1. [Giving] free wine bags, do you know how much wine that sells online?”
Original article can be found here.