DTC Sales Create Lifelong Retail Customers

Education of consumers is essential to maintain and grow markets.

Last week we were contacted by a business looking to expand their sales. Led by a wine educator, this small wine club had built a great local following but was now getting nationwide demand for their club offering. They reached out to Vinoshipper searching for a strategy to transform their business into a larger operation.  

These types of businesses, often educator led, are set up as retailers so they have access to an eclectic collection of wines, both domestic and international. 

Their business goals are to educate their networks about wines and ultimately turn them into subscribed buyers. It’s a great model. And while it might be based on anecdotal evidence, we’ve seen that individuals who are part of these education clubs rarely exit the wine category. Instead, they gain confidence in making their own selections and transition from their club to purchasing wines from retailers or local wineries, attracted by their new confidence along with the speed and variety offered.  

You would think these types of educator-led retail club businesses would be thriving in the market (they do in the rest of the world). They're at the forefront, doing the essential work of introducing new customers to wine, which is exactly what the industry needs for growth. While the wine market wonders about its next expansion phase, these clubs are already paving the way by engaging new consumers. 

However, due to current legislation, these hard-working, new customer-generating businesses are being completely constrained, as they are not allowed to participate in a national direct shipper license process. 

Legislation has been introduced, in multiple states, over many years, to allow for the direct shipping of wine by retailers, but they rarely succeed. Wholesalers and in-state retailers lobby against such ideas because they believe all sales, in their state, should pass through their three tier system. The three-tier systems have turned away from their original purpose of protecting competition and consumer health, to now protecting their own businesses, and margins, squashing the free market and consumer choice. 

There is so much consumer demand for these private educational clubs, yet each state purposely suppresses their residents from participating in them. We need to continue to open the markets to direct shipping. This will allow us to add more educated customers and, importantly, more buyers. 

We should all be asking our legislators why they are not passing this legislation to open the market. Creating legislation that specifically protects one sales channel over another appears very wrong and not what legislation should be used for. You can only surmise that the legislators are allowing special interests to control them at the expense of growing a market and letting consumers have a choice. Allowing retailers to ship wine, anywhere, is the exact initiative the wine market needs to enter its next period of growth.

PS. I should note, we nor anyone else can help such a business expand.