Direct-to-Trade (DTT) is Inertia’s ground-breaking technological solution that allows trade buyers in key states to purchase wine online from participating wineries’ DTT-enabled websites…connecting buyer and seller in a manner never previously possible. Boutique wineries producing high quality wine are able to reach restaurants and retailers in markets that were otherwise unavailable to them due to an inability to obtain representation in the traditional 3-tier system.
In most of our active DTT states this can be accomplished through direct distribution, without any intervention by a distributor in the recipient trade buyer’s state. In a few others, an even more sophisticated channel is employed…”virtual 3-tier”.
Direct Distribution
Just as some states allow winery direct-to-consumer shipments with direct shipper permits, a handful of states allow wineries to ship direct to trade accounts, bypassing the traditional 3-tier system of producer - distributor - retailer. Currently there are 10 states with such laws:
AZ,CT, DC, IL, OH, OR, VT, WA, WY and CA (for CA wineries). Maryland and Massachusetts also have direct distribution but it is currently impractical for other reasons.
Virtual 3-Tier
In a select few states wine may still be shipped direct from a winery to a trade buyer in the state without directly touching a state distributor. In these states, an order is placed with the winery and the transaction is processed by a wholesale distributor partner in the trade buyer’s state, with the inventory “virtually” passing through the distributor even though it physically moves directly from the winery to the trade buyer. All invoicing and reporting documentation is the responsibility of the distributor of record in compliance with that state’s law.
This system is possible because of the language of those state’s “at rest” provisions. “At Rest” laws require wine to pass through the respective tiers of the 3-tier system before reaching their ultimate customer, the trade buyer. Most state’s “at rest” provisions require a distributor to actually take physical possession of the wine for some period of time. However, a few state’s “at rest” provisions do not have such a physical possession requirement. In these states, such an inventory “pass through” is permissible, effectively allowing the wine to ship directly from the producer to the trade buyer while the documentation of the transaction lawfully passes from the producer to the wholesale distributor partner to the trade buyer.
Direct-to-Trade is a growing market channel. While legal restrictions remain, Inertia is working to develop distribution channels and expand in-market outreach to build producer-trade buyer relationships while working within the legal framework of distribution laws in several additional states. Keep your eye on our DTT blog for additional opportunities in the coming months.
If you’ve not done so already, you need to watch Tina Caputo’s brilliant “Robert Parker’s Bitch”. Setting aside the controversy, one of the many great points of the documentary is that wineries should not let voices other than their own dominate the message about their wines and brand.
At about minute 8:40, Paul Wagner, one of the many very smart people interviewed in this documentary, says: “We have a distribution system in this country that puts the winery at one end; and any message, any marketing materials that that winery creates needs to work their way through a distributor, a distributor sales person, a retailer, a retail sales person and eventually get to the consumer (…) the wineries don’t have the leverage to communicate directly through the consumer.” - Now that really struck me.
So much of my day is spent thinking about more efficient ways for wineries to directly reach demand and control their sales. Our creed at Inertia has long been to help wineries sell more and better by enabling their online direct-to-consumer channel. But no matter how great your wines are, you better make sure to write some relevant things about your wine and let the words and facts read like the voice of your best salesperson (particularly if that’s your winemaker). So to Paul Wagner’s point, the first conclusion I hear is ‘have something good to communicate’. The second conclusion is ‘think about how to get the message out; don’t rely on others to do it’.
If the message is to say your wine should be successfully summarized to a pseudo-scientific 100-point scale so as to reflect the personal tastes and palate of a minority (hum…) - then maybe you don’t care so much about doing the talking…
Now, if you don’t want to be “Parker’s bitch”, find ways to spread YOUR story. To follow Wagner’s message about the message - getting from the winery, through 3-tier, and to the consumer - you need marketing materials (I mean this as a concept, not just as paper tasting sheet or a press book).
Paul Wagner is a successful PR man (owner and president of Balzac Communications), so he knows about marketing materials. Thanks to some great technology wineries are now able to reach consumers outside the tasting room, through their website and the cool platform powering it, and syndication of their content to marketing agents.
The reality is that some 90% of all the wine sold in the US is not sold directly to consumers. It must first be sold to those (wholesalers) who can legally sell your wine to those (retailers) who will sell your wine to the end consumer. Wineries need to get in/through the 3-tier system. Then they need to get their marketing materials through that 3-tier system to adorn the shelves of fine retailers and help sommeliers support their wine lists.
The message about the message struck me because I live and breathe is Direct-To-Trade. I’m quite obsessive about transferring the lessons of direct-to-consumer sales to the byzantine halls of the 3-tier system. Inertia’s DTT technology now gives wineries direct access to the trade, bypassing or supplementing the “find a wholesaler” hurdle. There is exciting technology in Inertia’s pipeline that will also give wineries, and importers, a very efficient way to get their unadulterated message to the trade in order to sell to a wider audience of industry buyers.
So the best way to control what is said about your wine, or to better influence wine buyers, is to take control of your content first. And when it comes to online trade marketing, you need “clean” wine data, because downloading tasting sheets just doesn’t quite cut it. After all, you would not expect Wine.com to try to sell wine online by sharing .pdf files, right?.. A brave new world of online winery trade marketing awaits…
“Improvise, adapt and overcome” is an unofficial mantra the U.S. Marine Corps has maintained since their inception. Simple yet pragmatic, the adage has many applications in today’s dubious economy including the wine industry. Those who adjust their selling and marketing strategies best can persevere while we all navigate the waters of this recession.
So, what is a retailer or restaurant to do when faced with a consumer base that has restricted their spending habits? Learn who the audience is and placate to them with offerings they can justify.
It is worth noting that during downward cycles of the economy, alcohol consumption increases. Perhaps fueled by bouts of depression, fear or anxiety, people often seek an outlet. This can be perceived as a “positive” to the wine industry in that there is a “want” and “need” for a product, unlike expendable items such as high end jewelry. A “bunker mentality” can also develop as evidenced by past recessions. In an effort to reduce costs, the population will remain at home forsaking pricey nights out yet, seek some solace with a bottle. Wine is also increasingly becoming a part of the American diet. The health benefits and food compliment it provides is a confident indicator to sellers. Clearly, cost affects these purchases but with some creativity one can even move their expensive inventory by suggesting some options to their customers.
For example, those in the retail sector have the opportunity to target the folks who aren’t going out. Advertising wines at moderate price points for everyday consumption would be a natural place to begin. Including these brands in an email campaign, floor display or with simple point-of-sale materials conveys to the buyer that you are looking out for them. “Recession friendly” mixed cases are another option that could help your volume and margins as everyone is looking for a good value these days. What about that high end inventory that isn’t moving as it used to? Suggest the idea of bringing the restaurant experience at home. A proper meal can still be had with initiative and a cookbook thus justifying that pricier bottle you’re trying to unload. Regional dishes paired with a related wine may enable the customer to try something new and different. One could go so far as to create recipes cross marketed with a certain wine on display much like culinary retail shops do with their cookware.
Those in the restaurant world have options too as people will eventually need to decamp and have some fun. Like the movies or a sporting event, dining out is a form of escapism. If you can cultivate that emotion along with a clever wine list, active sales can result. Showing a well diversified by-the-glass program is a start. Rather than relying solely on showcase wines, offering value oriented brands at lower margins can perhaps encourage repeat glasses. Conversely, featuring some trophy brands normally reserved for the list into the b-t-g program might actually help move some inventory. Similar to a floor display, this may signal to the buyer that you are offering them a rare opportunity to sample something great. Another option would be to include some 375 ml’s. Sure, they can be difficult to deal with, but might be a way to offer more variety. Retailers have sales, why can’t restaurants? If you have some brands that you need to move and won’t compromise your list, advertise 20% off and see what results. Weekly specials can be rather helpful too when people are most likely not dining out. Give them an incentive to come in on a random Monday – Thursday with a promotion of bottle discounts for a four top, or the time tested happy hour.
The more you understand your clientele, the better prepared you’ll be. Adjustments may result in terms of your selling practices, but the personal attention you provide will surely be acknowledged. Be creative and remember that wine is still a desired good no matter what the Dow Jones says.
A small handful of observations and predictions for web design trends in 2009.
Prominent, Easy-to-Use Navigation
Big, Bold and Beautiful Type
Publication Style Layouts
Glossy, 3D Icons
Even if these specific features aren’t the aesthetic you’re aiming for, it’s always a good idea to keep your site fresh and interesting for your visitors. (After all, the pace of the constantly transforming web moves in dog years.) Contact your Account Manager for more information on how you can breath new life into your site.
A couple of our clients who recently had redesigns:
Mar 27, 2009 at 1:55 PM
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