Zach Kamphuis joined Commerce7 soon after he graduated from university in 2017. “I was the third person on the team,” he says. “Andrew and Jason Andres were building the platform, and I was doing all the support, the sales, the general admin. Now I’m in charge of business development and sales and marketing.”
The Andrew he refers to is Andrew Kamphuis, the president and founder of Commerce7 ― Zach’s father.
But Commerce7 isn’t a typical family wine business, with no vineyards, barrels or steel tanks. Founded in Canada in 2018, it’s a direct-to-consumer sales platform that lets wineries build relationships with their customers, manage clubs and subscriptions, and sell at the tasting room.
Zach Kamphuis says he didn’t join the company because it was his dad’s, but because he had studied entrepreneurship and had a hunch that Commerce7 was going to be a big success.
How Commerce7 began
In 2008, software executive Andrew Kamphuis founded Vin65, a wine commerce and point-of-sales platform. By the time he sold it to WineDirect in 2012, it had 700 customer wineries. Kamphuis joined WineDirect, became its President, and then retired to Costa Rica in 2016.
“I thought I would love living in Costa Rica and retirement ― but I was still young and got bored,” he told Future Drinks Expo. “I also saw a significant progression in e-commerce and not much happening with Vin65. In 2018 I started Commerce7 to fill this gap.”
Zach Kamphuis says Commerce7 is “100% API”, which is a techie way of saying it can connect to the existing systems and software platforms that wineries already use. “Reporting, or marketing, or accounting systems.”
Previous wine commerce platforms, he said, were built to handle everything themselves, and so were less easy to plug into existing systems.
Still, the company’s early days were tough. Although they landed big accounts like Constellation, “social proof is really important in the wine industry and nobody really wants to be much of a trailblazer when it comes to technology,” says Zach Kamphuis. “Lots of people wanted to take a look, but they were hesitant.”
Slowly, customers came. Some liked the new system. Some just had plenty of grievances with their old one. “They liked that, as a small company, they would get a lot of attention and we could build things specifically for their needs.”
And then came the pandemic. Wineries everywhere suddenly realised they needed an online store. “In 2020, we saw massive e-commerce growth,” says Zach Kamphuis. “Just massive.”
How it all works
In one way, being a Canadian company with clients in the USA is great, because the US dollar is so strong. But the US alcohol regulatory system is one of the most complex in the world. Worse, things change from state to state.
Kamphuis says that’s no problem, because Commerce7 lets the winery to declare which states it wants to operate in, and also lets it work with shipping compliance and tax software. He adds that wineries just need a website, and they can just add the Commerce7 tool. Then they’re off and running.
“And now you get a holistic view of your customer. You can see what this customer bought online, or they’re a club member, or they came into the tasting room,” he says. “You understand them better.”
Polly Hammond, the founder of 5forests digital marketing agency, says “it is the only platform working to solve the unique needs of today’s wine sellers and consumers,” including wine club formats.
“They are actively updating the platform ― many wine ecommerce platforms have been pretty much abandoned ― and they are responsive to our requests and feedback,” she says, adding that Commerce7 sites can be customised easily. “With open-source API, Commerce7 has made it possible for agencies like ours to develop apps and integrations that extend the functionality of the platform or solve specific client needs.”
While wineries in the New World have embraced DtC selling, with many building their own wine clubs and wine tourism offerings, wineries in Europe are more wary. “A lot of them are scared to upset relationships with their trade partners if they start selling DtC,” says Kamphuis, and so they stick to tasting room only sales.
Kamphuis says this can be a mistake, as DtC has far better margins. “You have better control over the customer’s experience. You have control over the whole transaction, and you have a better idea of who’s buying and why they’re buying.” He does add, however, that he has no solutions for managing trade partner relationships.
The fear of breaching European data laws is not something wineries need worry about, as the system is fully compliant with the laws in all the jurisdictions it operates in. “Some of our customers are publicly traded and so they go through heavy audits,” he says. “As a result, we go through heavy audits.” As some American wineries sell to 92 countries, international compliance is also well established.
Yet Commerce7 is not doing as well as it could in DtC-friendly markets like Australia and New Zealand, which Kamphuis says is because wineries don’t want a fly-in, fly-out relationship, and the company hasn’t yet put people on the ground.
Kamphuis breaks into a smile when talking about Texas, on the other hand. “That’s a great region,” he says. “You have a lot of really young wineries,” who are willing to take advice.
Focus relentlessly on data
As to what advice Kamphuis would like to give wineries generally, he has one word: data. “We always preach the importance of data capture in the tasting room,” he says. “A lot of wineries invest a lot in the tasting room experience, but they are not capitalising on that investment because they’re not getting the email or the contact information of the visitor.”
Kamphuis Commerce7’s internal data shows that the wineries who get to know the people coming into the tasting room are the ones who then sell the most online. “It can’t be overstated how important this is.”
Yet wineries, oddly enough, haven’t embraced the reporting side that can show them how sales are growing or declining. Instead, they prefer the wine club tools that let customers take charge of their own orders: if a customer wants to add a Pinot Noir to a case, and take out the sparkling wine, they can do that.
“When people make changes to a shipment, on average, they’re adding more than they’re decreasing,” Kamphuis explains. “The average order value goes up. The more somebody makes changes to a shipment, the longer they stick around in the club.”
As Andrew Kamphuis said in that same interview: “Customers are used to shopping on Amazon, Blue Apron, BirchBox, etc. They want the same great experience from wineries on their websites. Amazon has a speedy delivery. Blue Apron makes product selection in a club so easy. Wineries need to learn from these experiences.”