The Formula For Selling Wine Online
Selling wine online at scale requires a proven strategy. DTC online wine sales have steadily increased, especially with the pandemic, but competition is growing and other channels remain strong. In order to increase your winery’s ecommerce revenue, you first need to understand a simple formula:
These metrics are easily trackable via a platform like Google Analytics. (If you need assistance setting up Google Analytics, we can help! Click here to learn more.) Once you establish a starting benchmark for these metrics, all you need to do is make incremental improvements to see an exponential increase in revenue.
Let’s walk through what each metric means and how you can make incremental improvements.
Visitors
Start by tracking the number of visitors on your website each month. Keep in mind different marketing activities will affect site traffic. For example, you will typically see a big increase during club shipments months when members login to customize their shipments.
Sending sales emails is the easiest and most cost effective way to increase qualified visitors to your website. Your email list should be full of warm leads and repeat buyers who happily purchase new releases and offers. However, if you send too many emails within a month you might tap out your loyal buyers. To create a sustainable ecommerce channel you will need a constant influx of new qualified visitors.
Qualifying visitors is the hardest part. You can spend money on Facebook and Google ads and send thousands of new visitors to your website each month. The key is to make sure you are targeting the right keywords on Google and building the right audiences on Facebook. We don’t suggest jumping right in if you have no experience running digital ads. At our wine marketing agency we have one employee whose sole job is running digital ads and building audiences. This level of expertise and focus is critical. It can take months to hone in on the right audience for each client.
Another way to increase qualified visitors is through PR. If you can land placements in the right publications, interested readers will look up your website. A notable example is this past December when one of our clients was mentioned in a New York Times article. Through Google Analytics we were able to see tons of new visitors from the article click through to their site. Better yet, 25% of them joined our client’s email list.
When brainstorming how to increase visitors on your website, always go for a quality lead with high interest in your product over a high quantity of visitors likely to bounce.
Conversion Rate
Your website’s conversion rate is the percentage of total visitors that have converted. Different studies provide various benchmarks and we’ve seen averages range from 0.50%-2.50% for winery websites.
Qualified visitors directly affect your conversion rate. If you send 1,000 new visitors to your website but only 5 purchase, then your conversion rate will be an upsetting 0.50%. It’s better if you send 250 visitors and 5 purchase resulting in a 2.00% conversion rate.
Increasing your conversion rate is the most important way to increase your ecommerce revenue. Better you have the same amount of visitors, but increase your conversion rate than investing in more visitors.
There are so many ways to improve conversion on your website and it all starts with a thoughtful conversation with your web designer. Your website’s design and user experience has a massive impact on conversion. A complicated, unclear, or slow web store will certainly hurt your conversion rate. While it may be tempting to build your website once and assume you are all set for a few years, this is not ideal. You should constantly monitor your conversion rate, make small tweaks to the website, and see how the metric changes.
We’ve found simply changing the design of a button or reducing the number of clicks to get to checkout can increase your conversion rate. Sometimes pretty designs can get in the way of function so be cautious.
The easiest way to increase conversion rate is to offer a discount. We have seen free shipping or 20% offers send conversion rates as high or 20% or 30%. Unfortunately, this does not then mean increased revenue and it will lower your average order value.
Average Order Value
If your site traffic and conversion rate were to remain constant, all you need to do is increase your average order value (AOV) to increase revenue. Your AOV will be specific to your pricing so don’t worry about industry benchmarks.
With wine you can measure your AOV in dollars or bottles. To increase the dollars spent per order, you can increase the price of your wines for a quick win.
We suggest using bundles to get customers to spend more. If your average order is 3 bottles for $150 online then put together a 4 bottle bundle for $200. Send this offer via email, social media, digital ads, etc and see how much you sell. Focus on small incremental increases instead of trying to upsell customers beyond their comfort level.
Another clever way to increase AOV is to use cart carrots on your checkout. We worked with Commerce7 to create this functionality on their platform a few years ago and love seeing how wineries use it. The two most popular types of carrots are a progress bar graphic that fills in as customers hit your target cart size or a product upsell.
Cart carrots we designed for Wente Vineyard’s and William Chris Vineyards’s websites
For the progress bar, you would offer a discount if the customer hits a threshold such as free shipping on 6 bottles or 10% off a case. The cart carrots encourage the customer to hit the goal and gamify the experience. A product upsell uses logic to suggest a specific product in the customer's cart based on what’s already in there. With both methods, it becomes the digital equivalent of McDonalds famously asking “Do you want fries with that?” (The answer is always yes!)
Force Multiply Your Growth
Improving each one of these metrics can have a noticeable impact on your total ecommerce revenue. Improving all of these metrics at once though, will have an exponential impact on your revenue.
Let’s revisit the formula from the beginning. Below shows what happens if you were to just change one of the metrics. Notice how the revenue changes!
Now, look at this hypothetical: if you could double your traffic, double your conversion rate, and increase your AOV by $50, your revenue will increase by 480%!
Do not be distracted by trendy ideas or gimmicks when it comes to increasing your online wine sales. Focus on increasing your qualified visitors, conversion rate, and average order value and the rest will take care of itself.
Simon Solis-Cohen is the founder of Highway 29 Creative, a leading digital and creative agency serving the wine industry. He challenges clients to think about the future and constantly innovate. The agency chases data, not fads, and provides one-stop shopping for wineries looking to enter or jolt their direct to consumer sales. Their approach starts by designing and building a website focused on conversion (wine sales, club sign ups & tasting room reservations) and then dives into each digital channel with consistent and effective content and messaging. What to learn more or looking for advice? Shoot Simon a message at simon@hwy29creative.com.