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Instant Context:  Wine News from Around the Web Pt. I of II

Quick thoughts on wine news from the last week…

Displaced Leadership at WineAmerica

It is unfortunate that industry association WineAmerica is undergoing a Board of Directors led leadership change with its Executive Director position. 

However, what cannot be discounted in this renewal process is the fact that the organization is headquartered in Washington, D.C. and hangs its hat on a mission of, “Encourag(ing) the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.” With that as a mission, they were caught positively flat-footed on HR 5034 – a piece of potential legislation that, if nothing else, is entirely about “sound public policy,” or the lack thereof.

“ … Don’t get caught watchin’ the paint dry” is an oft-quoted sound bite from the basketball movie, Hoosiers.  Simply put, WineAmerica got caught not only watching the paint dry in regards to HR 5034, but also watching the grass grow.

In fact, WineAmerica was caught so flat-footed that other organizations showed themselves much more in tune with and proactive regarding the danger HR 5034 represented to its constituencies.  The Specialty Wine Retailers Association (SWRA), in particular, mobilized outbound mindshare building activity along with a consumer campaign with a great deal more efficacy than any response from WineAmerica.  Since April, everybody but WineAmerica continues to provide visible thought-leadership around the necessary reversal of HR 5034.  They have been significantly outworked in effort and influence.

HR 5034 reminds us that when crisis strikes, enemies come in two forms – the enemy we know and the enemy within.  The enemy within is the competing forces for the same good that expose ineffectual activity.

It may be true, as suggested in a Wines & Vines magazine article, that this personnel change with WineAmerica is about “cutting costs,” but it’s hard not to wonder if the change in leadership at WineAmerica isn’t related to its impotent advocacy when they needed to rise to the occasion.

Southern Wine & Spirits in Indiana

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Here’s one clue that a press release from Southern Wine & Spirits trying to ingratiate itself into the state of Indiana was written by a public relations person who doesn’t have the wherewithal to Google, “Indiana state nickname.”

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I’ve lived in the state for all of my 37 years.  Never have I heard the word “Indianans.”  Note reference above to Hoosiers.  And, the bonus is “Hoosiers” rolls off the tongue a bit easier.

As a sidebar, one insider at a large competing distributor in the state noted, “We’re not going to make it easy on them.”

Facebook and DTC for Wineries

With IBG (formerly Inertia Beverage Group) licensing use of the ecommerce software from Vin65, presumably replacing use of their homegrown product, The ReThink Engine, one wonders what business direction they are headed in. 

After acquiring the assets to the former New Vine Logistics last year, IBG used to be a “software as a service” ecommerce platform provider for wineries.  Now, they are looking like a next-generation, full-service logistics provider, which is probably a good idea given that the game for ecommerce software looks likes its over, having been fully commoditized.

Secondarily, with Facebook making radical advancements in providing capabilities for brands to engage with customers, you wonder how long a winery having its own website for ecommerce even makes sense.

The game isn’t about the actual transaction, the game is about engagement with a customer, or potential customer.

Facebook’s ability to cultivate, know and engage with fans of your business on a one-to-one basis is tailor made for wineries.

Throw in the ability to incorporate ecommerce and build inexpensive interactivity and I wouldn’t be surprised to see the first of several wineries go Facebook-only this year, with a more significant movement happening next year.



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Posted in, The Week in Wine. Permalink | Comments (13) |


Comments

On 07/05, Thomas Pellechia wrote:

“...impotent advocacy when they needed to rise to the occasion…”

Jeff, your prowess is developing.

Soon, you’ll be the largest on the blog block, and next year you might get the Best Blog Writing Award, too, if they go back to giving it out to bloggers. wink

On 07/06, Andrew Kamphuis wrote:

Jeff - another thought provoking piece, especially the Facebook part.
Facebook is slowly absorbing the internet, and it’s a great platform, but I personally feel (and maybe I’m biased) that wineries will need their own website for a long time yet.
We’ve seen e-commerce before on Facebook (I think 1800Flowers was one of the first) and we’ve seen one or two major brands experiment and use Facebook as their homepage, but it’s not a strategy I would encourage a winery to adopt.
I look at a hub/spoke model and Facebook and other social media are spokes that should direct customers back to your website which is the hub.
Wineries and websites should embrace Facebook and other other social mediums, but I wouldn’t encourage a winery to use Facebook as their homepage.  They give up too much control, too much branding, etc.

On 07/06, Jeff Lefevere wrote:

Andrew,

Thanks for the comment.  I don’t think wineries are going to abandon their web site or their ecommerce en masse, but I do think it’s a consideration when you can see and touch all of your fans on a Fan Page and sell to them on a one-to-one basis.

This coupled with the fact that wineries are notoriously bad at list segmentation in the first place and it’s got to be a consideration for some.

That said, club shipments, email blasts and the like will remain a “stay” factor for most wineries.

I just wouldn’t be surprised to see a winery go with a blog platform and Facebook experimentally, because the failover is always a traditional web site, so there’s little risk involved in trying something new.

Jeff

On 07/06, Jonathan Elliman wrote:

I agree with what Jeff and Andrew are saying. The wine industry eCommerce “space” is overcrowded with suppliers- with Submerce being one of those companies. I’m happy to see that IBG finally gave up on their “BigE” platform that they were working on for 2-3 years now. The last few tests I heard went horribly wrong and good to see that they are working on Andrew to sort it out.

I still see plenty of opportunity for consolidation as there are still too many players in this market are allowing the wineries take advantage of this which is driving down fees down to the point where it no longer makes sense from a ROI standpoint. Any other industry, companies would be paying 3-4X as much as what the wine industry is willing to pay for. We know this because we have far more clients that are non-wine than wine.

I just don’t think wineries understand how expensive it is to build a platform, continue to maintain and build upon it while continuously adapting 3rd party interfaces. So many wineries also want “custom” but don’t understand that custom requires a lot of programming and consulting which equates to a much bigger budget. Custom configuration is one thing, but a custom app is an entirely different project. Writing an FB, let alone an iPhone app can be easily done, but there’s restrictions with what you can do based on their rules, what their code will support and the certification process has a long lead time, but is also time consuming and frustrating at times.

I know FB has dabbled in the eCommerce element over the last year, but since wineries need so much more than a company selling clothes or widgets on FB, it would take a large investment from FB to support it for little ROI when 99% of the online marketplace doesn’t need to deal with state blocking and compliance management like the wine industry does.

I’m sure the next 6 months will show another wave of evolution in this space and we look forward to it.

On 07/06, Larry Chandler wrote:

Facebook can’t do the job now (of handling winery ecommerce), but down the road it (or something else) may replace or enhance their sites. This does have implications for those companies that develop winery ecommerce sites.

The same thing happened to another industry years ago, an industry I was part of then and saw much of it disappear. Those companies that adapted to new realities survived. Those that did not adapt, died.

I wrote about it after reading this blog post. See http://www.overabarrel.net

On 07/06, Larry Chandler wrote:

Jonathan, it seems to me it’s up to you to manage your customers’ expectations. The wine business attracts a lot of people without much business sense and you can’t let them guide you.

There may very well be too many people in this limited space. It is expensive to build sites and a custom site can be extremely expensive.

Show them the bill or show them the door. Otherwise you may wind up as some already have—by living, in essence, paycheck to paycheck.

Or, perhaps, offer additional services that are highly marked up. One-stop-shopping does have an appeal.

On 07/06, James Jory wrote:

Interesting post and comments. I too was drawn to the discussion about Facebook.

I completely agree with Andrew’s opinion that it is important for a winery (or any business for that matter) to have a “home” on the internet that is its own. At its most basic element this must start with a domain name. This gives the winery a critical level of control. If they want that domain to point to a Vin65 storefront, perfect. If they want their domain name to point to a Wordpress site, that’s fine too. Heck even a Tumblr or Posterous site will do. Stick a flag in ground that is your own. Owning and controlling the domain gives the winery a rudder that allows them to shift and change as necessary. Going all-in on Facebook means giving up way too much control, in my opinion.

With that said, today a winery needs more than just a website and a shopping cart to succeed online. The web is inherently decentralized and a successful online strategy needs to be decentralized too. A Facebook fan page is an important part of that strategy. Although Facebook is experiencing unprecedented growth and is currently demanding a lot of attention, it can fade just as quickly as MySpace. Also, the number of relevant and up and coming services demanding attention is increasing almost daily. For example, how many wineries have a strategy for location-based services like Foursquare, Gowalla, and Yelp?  As consumers are starting to get more of their content from their social graph than from the search engine, SMO is becoming more important than SEO. To be successful in this space, a winery needs to have its message easily discovered and consumed by social services. For example, is it easy for my customers to comment on, like, check-in to, or share my brand or my wines on these social services? And what sort of messaging accompanies these social actions? Or put another way, is the winery’s content optimized for these services? Has the winery adopted (or selected a platform that supports) semantic standards such as microformats and the open graph protocol on their “hub” site so all references on the spokes are rich with content/messaging and point home?

I’m rambling but I think the main point is that a website-only or Facebook-only approach won’t get it done anymore. Wineries need to think beyond Flash-based sites and PDF sales sheets and focus on content/message distribution.

-James

On 07/06, Larry Chandler wrote:

Any kind of “only” approach never really works. With a website, a winery still needs to do targeted email, perhaps events on winery grounds, local promotions. It’s never been an issue of do only one thing.

Facebook only makes less sense, but all things together “content/message distribution” is really essential.

I think the point was that what will be the center from which all these other things flow. Right now it is the website. Will that always be the case? Will there be a new paradigm? Will there even need to be a center?

Wineries just need to pay attention to what’s out there and what others are doing. And developers also need to pay attention so they can help the wineries accomplish their goals.

On 07/07, Stephen Mutch wrote:

In regards to the Facebook discussion, one of the most important elements for a winery participating in the social media space is having a way to connect yet another disparate database. Your fans on Facebook are a mix of club members, customers, contacts and people just curious about what you are up to. It is up to you to figure out ways to engage with them. 

But what about this question? Do you communicate and engage with your wine club members the same way you do to your newsletter contacts? If not, then why would you do that on Facebook or Twitter? These social platforms have created a new way of communicating and just like with every other communication channel, one size does not fit all. Real time conversations and instant feedback are things that are now within your control and it is up to wineries to develop a clear strategy to leverage it to the max.

What is going to be interesting to see is the brands that figure out how to connect all these different databases and develop actionable tactics and metrics.

Social CRM baby!

On 07/07, Paul Mabray wrote:

Great post and mostly great comments.  I agree with the audience that giving control of your brand to Facebook is a mistake.  As large as it gets, it is an augmentation to your current site.  It is the largest and stickiest trafficked site on the Internet and for some, it is appropriate to have your brand represented there.  An analogy is that it is the largest mall in the world and even if you have a kiosk, your ability to capitalize on that traffic for customer interaction that translates to longer LTV, more brand loyalty and possibly sales is key.  However, time will tell if it will be a super conversion mechanism for raw ecommerce sales or if ecommerce can actually align with the behavior of the user base.  What will be true it the notion of weaving together all customer transactions (ecom, club, phone, email, POS, and Social) to make a complete view and understanding of customers; Social CRM or SCRM.

However (gratuitous plug), if you are active on FB we believe the servicing information to your customers there is key.  As you know Jeff, the Cruvee.com team has created a free FB app that allows wineries to add a tab to their fan page to list all their wines if the wines are put into yourwineyourway.com (both Free services).

On a tangent, Jonathan, I have never met you but you never cease to amaze me with your ability to disseminate negative propoganda.  It is actually pretty pitiful from a company that has so much enterprise client turnover and actually did not program your platform from scratch.  Anyone looking for more information can find the original BVCommerce that you cobbled together to create Submerce:

http://forums.dotnetbb.com/default.aspx?f=34&m=29631

IBG (who I founded but am no longer affiliated with) is a great company and BigE was the best wine ecommerce software the wine industry will never see.  Also anyone that has worked with beta versions of it are amazed at the power and elegance of the software.  In fact, the company open-sourced the CMS components (BRIX) which is used by quite a few other companies with great accolades.  Their choice to take a different direction is probably a strategic choice on looking for the most profitable channel to generate returns for their investors and choosing Vin65.com was probably a way for them to focus on those stronger revenue channels.  Ironically the two things I can agree with you about is that building a platform is expensive (but wineries not appreciating the costs and complecities are a result of all softwares vendors inability to express that value) and ecommerce is now 100% a commodity product and it has been for some time in other industries.

On 07/07, Paul Mabray wrote:

Sorry about typos - auto-correct on the iPad.

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