Deals From the Vine Flashes On to the Scene
One of the most conspicuous outcomes of the economic downturn that has effected the American economy and, with it, the American wine industry, is the "Flash Sale". These quick-turnaround sales of single wines at significant discounts have popped up across the web in different form and appear to have gained a significant following with wine lovers looking to cash in on great deals on wines of all sorts.
The most recent entry into the "Flash Sale" category is "Deals From the Vine". While similar to other Flash Sales operations, what makes this Flash Sale different is that it is operated from within a closed group located in the Facebook universe.
Responsible for administering the Deals From the Vine Facebook Flash Sale is Peter Alig. Peter is Digital Pipeline Director at digital wine marketing firm, Vintank, which has spearheaded the marketing of Deals From the Vine. Peter took some time to answer some questions about Flash Sales and what makes Deals From the Vine different.
1. Briefly describe how Deals From the Vine works
The seed for DFTV was planted when Facebook announced that it would offer a "Closed Group" option to users, in which group content would be hidden from non-members. This, combined with Vintank's dismay at the predatory practices of certain so-called flash sales sites, gave rise to DFTV. For deals to function, wineries and wine etailers submit their proposed offers to Vintank along with promo codes to activate the deals on e-commerce platforms. Vintank group administrators post this information, along with the wine's story, on DFTV Closed Group Facebook page, and then engages with members to facilitate conversion on the deals. The deals last for as long as the winery or etailer chooses. Our members benefit from the extraordinary offers, and the wineries and etailers themselves raise awareness of their brands while adding valuable customers to their databases.
2. What aspects of the FACEBOOK experience and system makes it a particularly good venue for selling wine and engaging in Flash Sales?
We all know that Facebook has more than 500 million users, and a large percentage of that population drinks wine, either casually or seriously. It made sense to bring these deals as close to this population as possible and utilize Facebook tools to reach out to these prospective customers with little marketing overhead. DFTV members can easily add their friends to the group, creating an almost viral level of interest. It took the group less than 3 weeks to amass almost 1,100 members.
Plus, the Facebook Closed Group feature hides the deals from Google and www.wine-searcher.com, helping maintain brand integrity. The Facebook group also allows a representative of the winery to engage directly with the group in a conversational method.
3. DFTV hits on two important sales and marketing trends in the Wine Industry: Flash Sales and Facebook Marketing. About Flash Sales, are they a product of the downturn in the economy and do you think they will continue in the same robust nature they seem to be occurring with now when the economy turns back up and is humming?
Flash Sales sites are indeed products of the economic downturn. They will be around for quite some time but will be required to evolve. The economy is certainly improving in some quarters, but I'm still reading about wineries folding or consolidating and inventory building up in warehouses. More importantly, there is still a proliferation of new wineries and brands. It will be years before we return to pre-2008 sales levels. If the economy does keep improving, pulling the wine industry along with it, then you will see some Flash Sales sites fold that focus only on high end inventory clearance. The ones that fold will be the ones taking enormous margins from wineries while offering them little in terms real value and true customer acquisition.
4. Does the wine industry risk acclimating consumers to GREAT DEALS and thereby cutting off their own knees by supporting flash sales? Is there a risk of communicating to consumers that wines are over priced in general?
There is a slight risk, but brick-and-mortar retail outlets in large markets routinely slash wine prices in special promotions for the world to see. In addition, unless unknown luxury wine brands especially have million-dollar marketing budgets, they must sacrifice revenue in the short term to get their wine in people's mouths. Flash sales sites who intentionally or unintentionally market themselves as dumping grounds for wine will contribute to this negative perception. DFTV redefines the whole premise of flash sales and makes it about “we believe in our wine so much, we have reduced the price to get it into your mouth because we know you’ll love it enough to buy it again.” DFTV is about reconnecting wine companies directly through SOCIAL COMMERCE with consumers. Think of it as a virtual tasting room where people get to interact all aligned around the concept that they are there to be introduced or connected to wineries at great prices.
5. What's are the Best Practices for a successful flash sale?
A successful flash sale will always put the customer first. Period. Of course, the discount should be deep, with the sale price far less than what one would find in stores. For a wine company to benefit most, the flash sale will facilitate customer acquisition and help them grow their database. The only other flash sales we really support are those that actually buy the wine. To encourage customer conversion, DFTV has gone so far as to give wineries the option of extending to group members a modified dutch auction. According to this model, the more orders customers place, the deeper the discount becomes.
As a side-note, our favorite flash sale sites include Winestillsoldout.com (retailer), Cinderellawine.com (retailer), wineaccess.com(retailer), lot18.com (clean marketing agent model), wine.woot.com/ruelala.com (marketing agent model) and a few others.
6. Can you identify a success or two that DFTV has experienced since launching?
Our first deal was offered by an etailer, who featured a luxury Napa Valley Cabernet Sauvignon ($125 SRP) at 60% off with shipping included. More than 100 bottles were sold and more than 50 customers were added. All of the customers raved about the great customer service. So far the group has bought over 50 cases when it was still less than 1000 members. Another producer selling a relatively unknown luxury Merlot made it a point of interacting with Deals from the Vines members. Other members who had had the wine before chimed in, and contributed to others purchasing the wine. Once the deal ended, he chose to offer a courtesy personal phone call to all those who purchased the wine. That was a model deal.
Anyone interested in joining the Deals of the Vine Facebook page and thereby have access to their Flash Sale offers, merely email Peter Alig and include your Facebook ID in the body of the Email: [email protected]
Producers and retailers interested in learning more about presenting a Flash Sale to the Deals of the Vine Facebook group can also contact Peter via email: [email protected]
Currently, more than 1100 Facebook users have signed up to receive offers from Deals From the Vine.
Sounds like a great addition to a growing list of online wine deal retailers. Check out The Wine Squeeze for a daily list of several of these online deals: http://winesqueeze.wordpress.com
This current ‘Flash Sales’ culture could be extremely damaging for those smaller wineries which are struggling, especially if they gain no customers from the practice. That said, I’ve seen some great work done by lesser-known retailers who are using the lower prices to support and promote relatively unknown wineries, in an attempt to help them survive the downturn.
It’s good to hear about this facebook group, it sounds like it’s doing some good work on this front and maintaining brand and industry integrity.
You missed pursuing one important question, perhaps because Peter didn’t bring it up. The Vintank service is offered free. This is reminiscent of Paul’s adamant position when running IBG that Compliance services should be offered free. Now free can be useful in furthering other business goals like brand awareness and offering a premium version of the basic free service. (see Chris Anderson’s Wired article: http://www.wired.com/techbiz/it/magazine/16-03/ff_free). But this doesn’t seem to be Vintank’s objective. They seem to be making a more altruistic gesture which is difficult to incorporate into a business mode.
This said, the group is to be commended for early adoption of the Facebook Group platform to sell and relying on the tried and true merchandising technique of creating exclusivity that is used, for example, by the designer label flash sites like Rue La La.
And soon we at http://VineCrowd.com will be another choice (launching in December). We like to think of ourselves as a wine retail 3.0 business that is part flash sale, part crowd funding, part social web community. We think there’s lots of opportunity to connect wine drinkers with winemakers. Because we are pretty sure that wine drinkers want to feel connected to winemakers, want to hear about what’s going on at the winery, want to sit down and drink in their tasting rooms, maybe even go out back and have a barrel taste. We believe that wine drinkers want to help winemakers realize their dreams, but they also want great prices and hard to get, high quality wines. The technology finally exists that can give them all that.