June 18, 2014 | Jim Agger
Opening direct-to-consumer channels - especially an online wine store - can help you exceed revenue projections. According to a joint study from Digital River and Forrester Research, online DTC sales will be the largest source of revenue for many businesses within the next two years.
In the study, "Be Direct: Why a Direct-to-Consumer Online Channel is Right for Your Business," the companies assessed why branded manufacturers should quickly move to create this offering if they haven't already. The most significant reason businesses should consider this is because it allows them to increase revenue.
"One of the most striking findings in the study was that an overwhelming majority of companies that have implemented DTC ecommerce channels - 76 percent - reported that their programs either met or exceeded revenue targets," said Scott Heimes, senior vice president and CMO of Digital River, in a press release. "The research also addressed a key barrier to DTC channel adoption - the fear that it would conflict with other channels. Instead, the study found that if handled appropriately, DTC channels can actually enhance the performance of other channels."
Increase revenue and build better customer relationships
Offering more channels to customers gives them more ways to reach your business. For wineries, it can provide access to shoppers on the other side of the country. Despite the fact that retail is increasingly moving online, competitive businesses are increasingly prioritizing customer relationships, according to Practical Ecommerce. As ecommerce continues to grow in popularity, many companies have faced pressure from consumers to add an online channel.
Depending on your winery's location, DTC sales can give you a way to increase the size of your customer base. Some wineries only sell through distributors, but this isn't the best way to build a brand reputation or relationships with customers, industry source Harpers stated. This is particularly detrimental to smaller wineries. In addition to increased wine tourism, online wine sales can give them a way to strengthen their brands and engage with a larger group of consumers.
Focusing on personalized relationships and creating more opportunities to impress customers can increase the chances that they will return to your business.
How can small wineries rise to the challenge of DTC?
The study found that some manufacturers avoid DTC sales because of the perceived challenges of operating an ecommerce environment. However, this is often because businesses try to operate disconnected systems, which can lead to problems with inventory management and customer service. Integrated channels provide a more consistent experience for shoppers and increase accuracy.
One reason ecommerce may be challenging for small wineries is because of the influx of customers and the complex regulations surrounding wine shipping. It can be difficult to attend to fulfillment while managing day-to-day operations. The right third-party fulfillment partner can help you meet the changing needs of your business while increasing DTC revenue.
Contact a sales representative to learn more about how WineDirect's fulfillment solutions can accommodate the complex needs of your winery.