The Club is Dead - Long Live the Subscription.
Written by Zach Kamphuis
The wine club is dead - not even user choice can save it.
The wine subscription is here and is the path forward for driving online sign ups, retention, and member experience.
The past few months have been challenging for many wineries, but through all the challenges, there has been a ton of opportunity.
- Our internal data as well as data shared by WinePulse outlined that overall DTC wine sales were up during Covid19.
- Ecommerce sales were up dramatically for our clients (4 - 5x compared to previous months).
Despite the growth in wine sales and specifically wine e-commerce sales, wine clubs suffered. Both our internal data as well as data shared by WinePulse show a decline in wine club sign ups during Covid-19 compared to months and years previous.
This decline in sign ups becomes even more disappointing in the context of the results other subscriptions saw in different industries. A report published by Zuora outlined that 35.3% of subscription companies were reporting growth during Covid-19 (22.5% stating that their growth was accelerating while 12.8% reported they were still growing, but growth was decelerating). Only 11.4% of companies reported their churn was outpacing their acquisition (which is the trend we saw in the wine industry during this period).
This lack of growth can’t be blamed as an industry specific problem - Winc saw a 578% increase in sign ups during the week ending March 21st.
Consumers are wanting to buy more wine online, there is huge growth in sign ups for wine subscriptions, yet clubs are stagnant - why?
It’s because the wine club fails to provide the two most important elements that drive subscription sign ups and retention.
The wine club is not convenient, and the wine club is not personalized (curated)
According to Mckinsey & Company, the two most important factors that impact the experience of a subscription and whether or not the consumer stays subscribed, are convenience and having a personalized experience.
The wine club is not convenient. When does a consumer purchase alcohol from a brick and mortar location? 2-4 times a year - except when it’s hot out (then they delay purchase for 2 months)? Of course not. Purchase, just like consumption is based on context. Alcohol is purchased when a consumer needs it, when they’re having a party, having people over, when they’ve run out - purchase is driven by the context of their personal life. This is the exact opposite of what a wine club provides.
The wine club is also not personalized. Yes you can have a user choice club where members can personalize their own selection, but there is no curated personalization. There is no surprise and delight in adjusting your own package compared to Winc building a curated and fully personalized package for you based on your unique preferences.
The Path Forward
We need to reimagine and reengineer wine clubs in 2020. The future of the wine club is the wine subscription - more convenient, more curated, and more customer centric.
The wine subscription is convenient. The member controls the frequency of the packages, as well as the specific shipment dates for each package. Have an event coming up? Ship your package early so you have wine in time. Cellar getting full? Change your frequency from monthly to quarterly.
The wine subscription is curated. User choice is a good step towards personalization and some members may prefer to select wines on their own, but true personalization and curation services the customer rather than relying on them to know your products. The wine subscription builds unique packages on a per member basis, based on their unique preferences and purchase history.
Get started with subscriptions today, and start driving revenue and a better member experience.
Thoughts or comments? Email me at firstname.lastname@example.org