How One Company Is Reinventing Wine Sales

Building a wine platform

Developing a digital service takes time and money, and the partners pitched the idea to 100 different people, before raising $500,000 from four angel investors. Their first priority was then developing the digital payment options. 

“Because our concept works in a model of crowdfunding, you put in your details, but there’s no charge unless the deal reaches its goal,” says Weizman. “That’s not standard, so you need to develop some very specific mechanisms both technically and legally.”

Now, WINEing works like this: the seller decides on a specific set of products to sell. A retailer might do a tasting, for example, and when it's over, might offer the wines for sale. The retailer decides on how many SKUs to sell and whether there will be a discount. Once that's decided, they get a URL from WINEing, which leads to site where customers can place their orders. 

Weizman also did a workshop for Google Israel’s wine club. He says “the HR lady was loving it, because it didn’t cost her anything,” and because people from different departments started talking to each other, because they needed other people to opt in to their case of wine.

Everything was looking promising, so Weizman headed to Europe. His goal was to sell the app to the French and the Italians.

The European mistake

Some eight months later, Weizman was regretting the move. Europeans, he said, simply wouldn't believe that strangers would buy together.

And when French wineries did try it, they had problems with customers refusing to put their credit card details into an app.

On top of that, investors kept badgering him about when he was going to enter the US market. About a year ago, Weizman went to the Wine Sales Symposium in California “and it was a mind-blowing experience – a new world of everything.”

Now he focuses on the US, where everybody understands immediately what he’s trying to do, as soon as he explains it.

“We were excited when Moshé reached out to us,” says Diane Bucher, co-owner of Bucher Wines in Russian River Valley, which sells 80% of its grapes to other wineries, and makes 1,800 cases under its own name. 

“It’s a fast sale. The Zoom happened on a Thursday afternoon at 4:00 p.m. and it lasts for 72 hours,” says John Bucher.

By the time the sale closed, they had sold eight and a half cases. With the discount, it was $4,600 worth of sales altogether. “It was better than any other Thursday we’ve done recently,” says Diane Bucher.

John Bucher says that under normal circumstances, they don’t sell their wines at a discount, but they’re currently competing with bigger wineries that are dumping wine on the market. And the way people buy wine is changing — now people want to buy a bottle or two at a time, not a case.

“We see definite potential,” he says. Both Diane and John believe WINEing will come into its own at events where a number of wineries are offering their wines together.

Normally when people are in one place and buy together, they can just take the wine home with them. When it's something like a Facebook sale, things get trickier, an issue that's complicated further by the US's three-tier system. For the moment, the wine deliveries are taken care of by a fulfilment company, but Weizman is hoping to find a better solution.

Growing the spend

Weizman says there have been plenty of attempts in the past to create group buying tools — he prefers the term ‘collaborative buying’ — but they’ve typically failed because they need to build a group of buyers willing to use it. “You need to get a lot of traffic in order to even start thinking about what to do with that traffic. It takes a lot to gather an audience.”

Weizman also feels that those models are unfair, because they typically require the seller to give a significant discount, without getting back any customer data. And so WINEing has been developed as a tool for sellers, and makes a commission from the sales it generates.

“I don’t claim to bring new traffic to the winery,” says Weizman. “I claim to convert better on the traffic the winery already has.”

Rotem Dahan, WINEing’s Product Manager, says the key to buyer engagement is fear of missing out. “Showing buyers exactly how many pledges have been made towards a deal target — like ‘8 out of 12 pledged’ — creates instant social proof and a sense of shared moment,” she says. “We’ve consistently seen that pledgers are far more likely to join a deal that’s visibly progressing, than one that appears idle.”

Customers can also use a ‘share’ button to invite other people to join. “That behaviour not only increased conversion, but also helped generate new traffic for sellers,” she says.

What also helped was integrating with Stripe, a payments platform, which allows sellers to connect WINEing to their existing payment setup. Dahan adds that the more streamlined the offer, the more people are willing to participate. “We consistently saw up to 20% higher conversion rates in campaigns that offered six wines or fewer,” she says. “Too many options created friction.”
 

What’s next

There is still work to be done, like integrating with standard sales software like Commerce7 and Shopify. And, for the moment, the team will stay focused on the US market, because both wineries and consumers are more open to mobile-first tools.

“We’re making money, but very low amounts,” says Weizman, but adds they are getting ready to do another seed round of funding. “We have money for another six to eight months.”

There’s a long road ahead, from finding more funding to convincing people to try it, winery by winery. So far, 15 wineries have used the service, and five used it again immediately. What makes Weizman optimistic about WINEing is that too many American wineries are built on a club model that no longer works. “It was based on the concept that wine is usually sold in cases of 12 bottles of the same thing,” he says. “These things were created by baby boomers and, unfortunately, they’re either drinking less or not drinking at all.”

Meanwhile, the generations behind them simply won’t commit to buying large volumes of wine on a regular basis, especially not from just one or two wineries. Which means “there’s a window of opportunity for new ways of selling.”

As he says, the wine industry spends a lot of time asking itself whether it needs new types of products, like RTDs and cans, when it should be asking itself if there are new and better ways to sell.