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According to the SVB Wine Conditions Survey we ran in late 2012, direct sales in different forms represented three of the top five areas of opportunity this year. So why don’t all wineries just go head-first into the gaping chasm of the direct sales opportunity and shed the bonds and shackles of the three-tier system?
Really the whole thing with direct is a love/hate relationship. Winery owners love the higher margins but they hate figuring out the labyrinth of change required to install a top functioning direct program. To be fair, its really not an easy path with hurdles in so many areas including hardware that isn’t integrated and skills that aren’t available or in many cases even well defined.
While direct sales are the fastest growing of all channels in wine, that growth is more due to other’s efforts versus the wine industry’s tactics. I don’t think that’s too harsh a statement and here’s why:
The family run wine businesses lives partly in a State of Grace despite being less than optimized as a retailer of wine. Along with the consumer appeal of wine comes a higher degree of the customer working to find you through technology created by others; for example retail platforms like Amazon, or Social Media like Facebook, or even consumer rating functions such as that on Cellar Tracker. All that activity in the digital world, the bots memorizing your brand name and the growth in technology takes place around us. As technology grows, so do direct sales. That correlation is more than a coincidence.
Maybe you are the outlier though? Perhaps your brand’s growth is more due to your plan and your tactics? Test the theory then. Ask yourself what is the condition of your digital marketing plan? Ask yourself who has the skills in your company to create e-tailing strategies that are focused and game changing for your brand. Ask yourself to what extent your retail room is integrated with the rest of the marketing plan, or how the choice in technology platforms is enhancing or limiting your success. Most important ask yourself a basic one about the state of your wine club. Did you know almost 2/3rds of wineries don’t give their wine club members a choice of the wines they ship? That’s the wine industry direct sales tactics and it’s a hindrance to success in direct sales, not a help. And yet ….. direct sales continue to show impressive growth.
Granted, the skills required to position a successful direct program today are not likely native to the winery owner. That’s an easy fix though. Just go hire the brain power. It would be nice except there is a severe lack of resident talent available to handle the diverse skills needed to lead the change in direct sales. Direct sales encompass a variety of disciplines that include everything from logistics in a delivery truck dropping off wine at a regional restaurant, to management of the Tasting Room experience, and brand marketing. The function is supported by a litany of electronic tools such as C.R.M., P.O.S., S.M., LMNOP, AM & FM, and many other such technical acronyms. In the past three weeks I’ve had discussions with 4 separate brands looking for this kind of talent. To give you an example of the skill-sets required, here’s one redacted set of job qualifications I was handed:
- 8+ years experience in the wine business or luxury goods business with demonstrated direct to consumer management abilities
- Experience in database and customer relationship management (CRM)
- Success in the creation and implementation of direct to consumer sales initiatives with an emphasis on consumer segmentation.
- Through knowledge of luxury wine marketing with fine wine appreciation
- Create information gathering mechanisms and evaluate existing and new technical data, then conduct detailed analyses to create new tactics
- Experience in the creation and management of business processes, budgets and forecasts and an understanding of basis accounting and profit center analysis
- Demonstrated success in roles where small entrepreneurial teams exist and individuals fill a number of different roles where needed.
- Understanding of regulatory compliance and the fulfillment process
- Strong track record with multi-media channels and marketing campaigns including website, email, social media (Facebook, Twitter, YouTube), and print
- Proficiency in Microsoft Office Suite and knowledge of major wine industry software applications
- Possession of a valid California drivers’ license and is able to lift 50 lbs.
|Rob’s Workout Regimen|
I was thinking I might be the only person alive with those skills until the part about lifting 50 lbs. But seriously …… who are we going to find with all those qualifications? Who has those kind of skills in the wine business? The answer is very few people, and its this one situation that is most holding back the wine business from truly evolving in the direct business.
We lack this kind of talent in the business and yet time and time again, good and intelligent hiring managers make the same mistake of seeking a person with these diverse skills from inside the industry itself.
Interpersonal skills are generally more important than technical skills in successful hiring decisions but in this case we are lacking the basic building blocks in the technical skills of industry people to evolve success. While its only a matter of time before we sort out the technology problem with platform integration (it is coming), as an industry we really need to recruit talent for these jobs from outside the wine business and teach the wine business aspects – the ones we already know.
That’s my encouragement for the week. Think through your direct model and do your part to evolve the business by finding some talent from outside the business. If enough wineries do that, we will evolve our own digital culture and see a tidal wave of new models and direct sales.
What are your thoughts? Any idea where we are going to find the talent needed from outside the industry? Please log in and comment below. SVB on Wine