Alcohol delivery is seeing an unprecedented surge as shops limit customer visits during quarantine. So it’s not surprising that direct to consumer wine subscriptions are among the startups doing well while the retail industry navigates the crisis.
DTC wine club Winc is one of these at-home winners. With a 684% increase in new member sign ups between March 15 and March 28 and an 80% increase in revenue in March over February, the company is seeing some good growth. Now, it’s trying to figure out how to make sure these customers stick around, even post-pandemic.
Co-founder and president Brian Smith spoke to Modern Retail about Winc’s strategy to make digital wine purchases a long term habit. This interview has been edited for length and clarity.
How are you fulfilling this rush of high demand?
We’re fortunate that our current model is omnichannel, having added wholesale distribution in recent years. Having a “from grapes to glass” operation requires adequate preparation for demand. In that regard, the strategy has been more so about reallocating resources internally during this demand. In doing that, we’re adjusting from an operational perspective as opposed to marketing. Like adding shifts to warehouses and making sure fulfillment is done safely, but also in a timely manner.
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How is Winc planning for customer retention following the spike?
Getting over 42,000 new members in March and seeing a 111% increase in order since February, has forced us to adapt quickly. We’re very actively focused on engaging both our existing and quickly-growing community, which obviously everyone is doing right now. Some examples include promoting upcoming product launches, as well as various digital and virtual activations. This Sunday, we’re hosting our next Lost Poet wine reading with Atticus. We also have ongoing virtual wine tastings, like the recent one with Winc winemaker Robert Daugherty, to benefit the Restaurant Workers’ Community Foundation.
Have your pre-planned production timelines shifted to accommodate the surge?
We’ve been working on new wines for quite some time, so we’re looking at both our existing customer base while making sure to not screw up this opportunity. You don’t want to acquire all these customers, then turn everyone back out. This is also part of what will help us create retention. From the beginning our focus has been on creating and carrying great brands, so continuing to get the validation is also important. For example, our Summer Water Rose just got rated 92 points by Wine Enthusiast.
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Alcohol subscriptions have been slower to take off than other DTC categories. Will this situation change that?
Right now we’re seeing a massive adoption and are doing great DTC-wise, but in context this category is still a tiny portion of the overall wine market sales. There’s no doubt this period is going to accelerate the trend and change behaviors, which we’ve been betting on for a long time. But I think because we’re still in a surge environment, we have to remain logical and make sound decisions amid the uncertainty. Right now, the important thing is to work with the team to keep the machine going.