A decision by the Supreme Court in “Byrd vs Tennessee” this past June has the potential to resurrect interstate shipping opportunities for wine stores across the country. The question is whether the support of the Court can be fully realized by stores wishing to ship across state lines, and how much resistance retailers can expect as they seek to expand their access to markets.

Back in 2005 the Family Winemakers of California won a historic ruling at the Supreme Court that opened the way for wineries across the country to extend their reach by selling direct to consumers in more than 30 states. Referred to as the Granholm ruling, it favored the Commerce Clause over the 21st Amendment, and prohibited state discrimination against “out-of-state economic interests”. Initially retailers assumed this ruling afforded them the same privileges as producers, but while wineries have been working to convert state laws to comply with Granholm and afford them access to more markets, a campaign by the wholesaler lobby was successful in convincing many state legislators that the ruling’s impact should be limited to wineries. As a result, retailers were written out of most of the new shipping laws.

This summer the Supreme Court directly contradicted the interpretation adopted by states where shipping by out-of-state retailers is restricted. As Justice Alito wrote in the Tennessee Wine opinion, “Granholm never said that its reading of history or its Commerce Clause analysis was limited to discrimination against products or producers.” As Sean O’Leary, of O’Leary Law and Policy Group, says on his authoritative blog, “with these words the Court settled a long debate festering for nearly 15 years.” On the surface, it would appear the matter is settled and that retailers should expect state legislatures to make modifications to their shipping laws to afford them the same privileges as wineries. However, there are indications that the interstate road for retailers could still present some challenges.

Before states will be willing to open their borders to deliveries from out of state stores, many will need to create a framework for these stores to be permitted and remit taxes that replace those paid by in-state retailers and wholesalers. For stores willing to push the envelope, there is the question of how soon the carriers will recognize the new legal landscape. The main carriers now require that licensees demonstrate they are permitted to ship into each state. Will this change, since a state’s ban on out-of-state shipments may not be defensible? Or will states continue to use the carriers to enforce their permitting requirements?

This ruling also puts pressure on the wholesale tier. Mark Brown is a careful reader of trends affecting the Three Tier System in the US which he surveys while accumulating the many articles for his daily email “Industry News Update”. Brown sees Tennessee Wine contributing to a diminished wholesaler influence in state legislatures. This concerns him having seen the once-powerful wholesale tier diminished in his native UK. A contributing factor in their decline was the growth of retail chains in that country during the 1960s and ‘70s which led suppliers to bypass the wholesale tier and sell direct to chain stores and restaurants. If US wholesalers are no longer responsible for all alcohol sales in their home state, it is easy to see how this could diminish their influence at the state house. Another possible source of pressure on the wholesale tier is pointed out by O’Leary who posits that a broad interpretation of the Granholm decision suggests that states also may not be permitted to discriminate against out-of-state distributors, who also qualify as “out-of-state economic interests”. How long will it take for this to be tested in the courts?

Since Tennessee Wine there have only been a few major courts that have had a chance to analyze the Supreme Court’s decision while reviewing 21st Amendment cases. However, it does seem clear there are no blanket prescriptions that can be applied, instead rulings will be made on the merits of each state law. As O’Leary points out in a review of a recent 5th circuit decision, while states may not violate the nondiscrimination principle, they remain free to pursue their legitimate interests. Before they can fully realize the support of the Court, retailers can expect those “legitimate interests” to be hotly contested in state courts and legislatures by a wholesaler lobby that may fear an existential threat.

To comment on this column or to learn more about how Beverage Media can help with a website for your store visit BevSites.com, or contact Karli Del Rossi at karli@bevmedia.com. Follow us on twitter at twitter.com/bevsites.

Published in the July 2017 Beverage Media journal's "Talkin' Tech column

Leveraging online marketplaces to increase overall sales is not a new strategy for wine and spirits retailers. Wine-Searcher has been “The Marketplace” for connecting consumers and retailers for 19 years and has 1,000+ partnered stores in just the US. However, in the last 5 years, retailers--especially those in large cities--have received overtures from a number of newcomers including Drizly, Banquet, Thirstie, Minibar, Delivery.com, and eBay, who look to shake up how consumers buy wine. The influx is both exciting and worrisome for stores. On one hand, new channels for business mean more ways to get sales. On the other, these services more tightly control the relationship with the customer and typically provide the checkout and sale. Only after the purchase does the transaction funnel to the retail for order fulfillment. In contrast, the older marketplaces like Wine-Searcher, Google Shopping, and Shopping.com simply refer traffic to the retailer website. For this reason, participation in these newer marketplaces means more sales, but it also means yielding a chance to build a direct relationship and loyalty with the customer.

To work strategically with these marketplaces, retailers should make a conscious effort to still use the majority of their available resources to focus on growing their own brand and business. Exclusively relying on marketplaces for sales has already proven to be a dangerous and vulnerable position, as a shift in policies can pull the rug out from underneath partners--like when Amazon booted wine retailers from their site in 2013. Still, getting in front of the marketplaces to sell to the customer directly requires sophisticated technology, which, if stores had to develop completely in-house would be simply prohibitive.

That said, alongside the emergence of many new competing marketplaces have surfaced new, white-labeled services that aim to assist wine retailers in growing their overall business (and help compete with well-funded start-up marketplaces). Deliv, a Bay Area-based company, which includes UPS among its investors, is the most recent addition. Recognizing the logistical and staffing challenges in offering professional delivery, Deliv supplies the trucks and drivers and offers local delivery on behalf of the retailer. What’s more, the service provides a dashboard for the store to manage their delivery policy (when, where, and how quickly they offer delivery), and integrate those settings with their own eCommerce website and mobile application’s checkout process. Not surprisingly, two other companies that provide white-labeled versions of mobile apps and eCommerce websites, respectively, Dryncand BevSites (yours truly) have integrated Deliv with their own products.

Using marketplaces to drive sales can be effective, and stores should explore any avenue that will yield more business. However, retailers should not rely on the extra sales as consistent, long-term revenue. The best policy for the wine retailer is to think of themselves, their business, first: dedicate themselves on growing their own profile through their own resources and available white-labeled services. And, then, finally augmenting that business by participating in profitable marketplaces.

After the June announcement that Amazon is in the process of acquiring Whole Foods, with the exception of a provocatively-titled article by Brad Rosen, CEO of Drync, “Did Amazon Just Kill Liquor Retail As We Know It?”, there was not much speculation about how this acquisition may impact wine retailers. Retailers, however, should be making preparations to contend with Amazon now. Grocery chains that sell alcohol have always posed a serious competitive threat to independent retailers, and Whole Foods themselves was one of the biggest with more than 350 liquor licenses across 41 states. That massive brick-and-mortar footprint, however, is now in the hands of the largest eCommerce company in the world, who has clearly been preparing for this moment. Amazon aims to erase the lines between brick-and-mortar and online shopping, and you can see this in their most recent innovations. In the last year alone, they’ve opened up two of their own branded “drive-up” brick-and-mortar stores in Seattle, WA where you buy online and can pick up your groceries within 15 minutes. They’re also planning on opening another Seattle store called Amazon Go, where there are no cashiers; phones automatically and accurately handle payment. In the last two years they’ve also made further improvements with local delivery and have expanded Amazon Prime Now, a service that offers limited 1-hour delivery. Imagine now a future where those recent innovations mature and are able to be incorporated into another 350+ brick-and-mortar locations across the country, and where Amazon can lobby extensively (they spent $11M+ on lobbying in 2016). How do independent retailers contend with this future? Having a conveniently located store with decent prices will not be enough. With the emergence of 1-hour local delivery via apps like Drizly, consumers are becoming more aware of alternatives to going into a brick-and-mortar store to get a bottle of wine quickly. Amazon can and will push the boundaries on this channel; independent retailers cannot hope to outmatch Amazon in this area. Wine retailers, however, can outperform Amazon (and other grocery chains) in customer service—especially when it comes to recommending products and inspiring consumers to become excited about what they’re buying. This, coupled with leveraging current and emerging technology to keep up an online presence, should be among the fundamental strategies used by independent wine retailers competing with Amazon and other massive corporate retail players in the future.

Publish in the June 2017 Beverage Media journal's "Talkin' Tech column

Many of the laws that govern the retail tier were designed in the wake of prohibition with the goal of maintaining temperance. Over the past 80 years our attitudes towards alcohol have changed in ways that make these original concerns seem like an historical artifact. Today state action to block alcohol sales where they are illegal has become less important, as very few dry counties remain. Preventing sales to minors is still a major concern, but increasingly the enforcement of alcoholic beverage law more often resembles the concerns about discrimination found in the commerce clause. State laws on the sale of alcohol reflect the push and pull of competing economic interests. The National Association of Wine Retailers (NAWR) has outlined a legislative agenda for how wine retailers can shape their future.

Direct Shipping

California wineries were successful in convincing the Supreme Court that states should view the commerce clause as preeminent when it comes to shipments across state lines. That states continue to discriminate against out-of-state retailers is characteristic of the failure by wine stores to organize an effective challenge to state laws. NAWR hopes to become a focus of organized retailer action on this front and is supporting bills in TX, NY and CT that permit shipments from out-of-state retailers.

Third Party Marketers

Whether the marketer is Amazon, Drizly, or any number of consumer apps that seek to connect customers to retailers with wine to sell, they all suffer from the lack of a well-defined regulatory framework. Licensees must control the sale, payment and delivery of alcoholic beverages, but who sets the price of wines and how does a state agency enforce policy on a third party where it has no jurisdiction?

Primary Source

This mostly concerns the sale of grey market wines beyond the allocation of the local wholesaler. A recent move in NY to limit this provision drew attention to the importance for restaurants to be able to access older vintages and rare wines from secondary sources.

Supplier Purchasing

This proposal would allow retailers to purchase direct from producers, a privilege that, when available, is often be restricted to in-state purchases. Where this happens discrimination is a concern. This proposal challenges the unique role of wholesalers in this industry.

Central Warehousing

In states where a retailer may own multiple locations, it is inefficient to require the retailer receive deliveries directly from a wholesaler for each location.

30-day credit terms

There are still states where retailers are required to pay COD for all their deliveries. Retailers should have access to at least 30 days credit terms.

It is time for wine retailers to take an active part in shaping the marketplace. While there are those who seek protection from competition, the future is more likely to resemble an expanded marketplace as we move towards a single national marketplace for wine sales. NAWR seeks to have the same principal of non-discrimination applied to retailer sales that the Supreme Court delivered for wineries.

On Wednesday, May 17th BevSites hosted a webinar interview with Tom Wark, one of the foremost experts in all matters regarding the interstate shipping of wine.

For those not familiar with Tom he leads a group called The National Association of Wine Retailers (NAWR) that advocates for wine retailers specifically when it comes interstate shipping legislation.

(Run-time is 55 minutes).

Topics covered include

* Where wine retailers legally are permitted to ship (provided they're in a state where they're permitted to ship out).

* Which states are actively enforcing their legislation against out-of-state retailers.

* Current key legal battlegrounds--particularly NY state.

* A discussion on why retailers should support legislation that would permit out-of-state retailers shipping into their market (with some direct comments about NY again).

Over 30 years ago, Tony Pitale with the help of his wife Anne founded Innovative Computer Solutions (ICS) with the goal of building a better Point-of-Sale (POS) software solution for the wine and spirits retail industry. This venture has given our industry Vision POS, one of the most commonly installed POS systems throughout the United States used by small boutique shops and large multi-location business alike. The software has evolved over decades and constantly adapted as technology has transformed our lives.

This April, Tony and Anne have sold ICS to Jonas Software, a Canadian-based software company that has an umbrella of other POS software vendors that handle other industries (restaurants, education, etc). For Jonas Software, this is an exciting opportunity for them to acquire a company with a very strong presence in the wine and spirits retail industry. For Tony and Anne, it means they can look forward to a very well-deserved retirement.

Businesses using Vision POS today will be happy to learn that the acquisition will not have any impact on their service. As with their previous acquisitions, Jonas Software intends to have ICS continue to operate as is. And although it’s hard to imagine someone else filling in Tony’s shoes, stores will feel confident seeing a familiar face take the reins--Jim McMillan, a key member of the ICS management team for nearly 20 years.

The BevSites staff wishes Tony and Anne a happy, relaxing retirement! And to say “thank you”, for the indelible impact they have made on how technology is used in the wine and spirits retail industry.

While basic chatbots (computer programs designed to simulate conversation) have existed in some form for decades, it was perhaps in October 2011, when Apple incorporated Siri into their iPhone operating system (iOS 5), that they became mainstream. In fact, less than 5 years later, a survey taken by Creative Strategies found that 98% of iPhone owners have used Siri. A significant factor in this the adoption of Siri is that users find it quicker and easier to ask a bot a question and get an immediate and helpful response than to search for the same information manually. We’ve reached a point where chatbots are sophisticated enough to be the fastest way to answer certain questions and obtain information.

While most people are familiar with Siri and other proprietary chatbots that leverage speech recognition like Alexa, Cortana, and OK Google, there’s now also a blossoming chatbot industry focused specifically on integration with messaging applications such as Facebook Messenger, Slack, and Skype. For a great example, try going to Fandango’s Facebook page, and sending a message asking about local movie times. You’ll receive a series of chatbot-driven replies that will ask for your location, list out available films and times, and even allow you to purchase tickets! Every response is nearly immediate, making it faster than using the Fandango website or mobile app.

Unlike proprietary chatbot celebrities like Siri and Cortana, most of the chatbots deployed on messaging apps handle parsing text and speech to interpret meaning and intent through API’s--tools that allow the developer to leverage and integrate 3rd party programming. The upshot is that, just as it’s easier and cheaper to buy a Lego set to make a creation than it is to manufacture your own blocks from scratch, building a sophisticated, helpful chatbot has become significantly simpler due to the emergence of APIs. We will likely soon find them becoming far more ubiquitous.

In wine retail eCommerce there still are no live examples of chatbots making product recommendations and guiding consumer purchases yet, but it seems like this type of application is a natural fit for online retailers. In-store interactions and recommendations are often a huge part of the brick-and-mortar shopping experience. Some online wine retailers are using “live chat” tools that connect visitors with store staff to answer questions, but live chat tools not only take more staff to maintain but also can’t be manned 24/7.

That said, at least one company is planning to have an impact our wine retail eCommerce this year. Magia, a San Jose startup founded last year, is developing a chatbot that will first take aim at answering consumer questions about wine and guiding users to product recommendations. When it goes live, retail partners will supply an inventory feed to Magia (similar to setting up a Wine-Searcher feed), and the bot will process the details and begin incorporating them into its correspondence with consumers. What’s more, with help from the eCommerce site developer, there are possible integration points with actually placing orders or checking on order statuses through the chatbot.

While chatbot messaging technology doesn’t have much saturation in eCommerce interactions today, the fact that it’s becoming easier and cheaper to deploy solutions, suggests we will soon see them with much greater frequency--including in our own industry.

At the end of each year we like to review the performance of the 200+ eCommerce websites on the BevSites platform and share some highlighted insights. This has become increasingly challenging for the past 4 years as the average traffic, sales, and cancellation rates have hardly increased or decreased. Yet while the standby metrics suggest little shifted, we can point to a number of major changes in selling wine online between 2013 and 2016 (such as in interstate shipping regulations, new marketing partners, and the evolution of consumer’s perceptions of mobile eCommerce). The numbers may add up similarly, but the underlying experience is not the same. For some genuine insight we must dig a bit deeper.

The starkest and most easily measured difference in eCommerce retail between 2016 and 2013 is the role of mobile devices. In 2013, the average website would find about 25% of their overall traffic came from mobile devices; in 2016, the figure has doubled. Consumers today access the eCommerce websites on the BevSites network on mobile as much as they do on desktop computers. This is pretty significant because mobile users have a greater tendency to conduct research online and either later purchase the item in a brick-and-mortar business (“webrooming”) or switch to a desktop computer to make the purchase itself. The expectation is that if the overall traffic volume doesn’t change (like in our 2016 average store metrics), and if the overall percentage of mobile traffic increases, overall conversion rates and sales should actually decrease. Yet despite the percent of mobile traffic growing from year to year, the average conversion rates and overall sales of our stores hasn’t budged in 4 years. There’s another compensating force.

Key Rate Change

After testing a number of hypotheses, we landed on a particular assessment that yielded a key to the puzzle. We decided to look exclusively at Google Organic traffic (a traffic segment that tends to be stable and predictable), and identify the distinct changes in conversion rates for desktop and mobile users from 2013 to 2016 for our stores. Here we discovered, that the conversion rates of mobile users skyrocketed and increased between 2013 and 2016 on average from 0.37% to 0.66%--an increase of 80%. Desktop users too had an increase (albeit more modestly) from 2.69% to 2.96%--an increase of 10%. The lower overall rate of the mobile conversions, and the increased percent of the mobile traffic essentially hide these increases.

The main takeaway is that the websites are quietly better converting traffic. Mobile users, in particular, perhaps due to improvements in mobile browsers or simply increased consumer confidence in mobile eCommerce, are more frequently making purchases from their devices. It goes without saying that optimizing for mobile users is a necessity today. Furthermore, the quiet gains made with desktop users’ willingness to make purchases suggests promising possibilities. The growth may be somewhat dependent on users researching items on mobile, maybe even building a shopping cart on their phone and then finalizing the order on desktop. However, as pointed out in ShipCompliant’s annual surveys, where they found a 66% increase in wine sales between 2010 and 2015, the business of selling wine online has prospered. And though competition online certainly has blossomed and softened gains, the 2017 wine consumer is more likely to buy wine online than ever before.

The National Retail Federation is the world's largest retail trade association. Its members include department stores, specialty, discount, catalog, Internet, and independent retailers, chain restaurants, and grocery stores. “Retail’s Big Show” is an annual event at the NYC Javits Center with keynote speeches, presentations, and a expo of thousands of retail industry vendors.

During the first keynote presentation at NRF on January 15th., GameStop EVP and President, Mike Mauler, quipped “The true power of the loyalty program… it’s not the points or perks. It’s understanding customer data and using that knowledge.” This early comment seemed to frame one of the major themes of this year’s show. While consumers are enticed by accruing points and rewards by patronizing a business, the larger opportunity to win loyalty is by better understanding customers and delivering a more personalized, enjoyable experience.

This philosophy was on display throughout many of the subsequent presentations—most of which focused keenly on the role of mobile smartphone technology. This comes to no surprise as in the last year, we’ve hit a point where there is as much internet traffic on mobile devices as on desktop. Jeremy Gilman of DMI Mobile Consultants presented a study (How Retail is Failing the Needs of Mobile Customers) where his company went as far as identifying that about 30% of consumers are “mobile reliant” and make use of mobile internet throughout their entire day. His belief is that all retailers need to better incorporate smartphones in the brick-and-mortar shopping experience. Broadly, the message of Gilman’s presentation (and others’) was that all retailers, including Fortune 500 companies, have generally not done this well. But he did provide one example--True Religion retail clothing stores--that might catch on and capture imaginations. Near the end of 2016, True Religion outfitted their store associates at a handful of test locations with Apple Watches, which would alert them when someone with their mobile app enters the store--providing them their past order history and details on how to get more out of the interaction. The associates can also provide checkout on the spot rather than forcing the customer to queue up at a cash register at the front of the store. You can read more on this experiment here.

In the wine and spirits retail industry, there’s sometimes a sense that we’re “behind the times” when it comes to technology and how it’s used. However, with respect to some of these themes, there is a lot of promise when looking at our industry’s small businesses. Despite the fact that many of our industry’s retailers rely on proprietary eCommerce web platforms like BevSites (vs. SaaS/open-source systems like Shopify and Magento), mobile optimization of the web eCommerce experience has become commonplace and affordable. Perhaps even more promising is that in the last year, there’s now a reasonably-priced path for a store to have their own branded app through Drync.com. If Drync builds on their success in this past year (or if other legitimate app platforms hit the market), our industry’s small businesses will realistically be able to access all the building blocks needed to serve their customers wherever they are, however they’re connecting to the internet.

While we were able to sit in on many very good presentations, much of the focus of NRF is on the Expo, the hundreds of vendors with retail solutions that range from Enterprise Resource Planning (ERP) systems to money counting machines to security camera equipment. We did have a chance to speak with a number of vendors.

Here are 5 of our most notable interactions:

Pointy (www.pointy.com)

Much of the NRF Expo showcases cutting edge technology that is simply not realistically going to work within the budget of a small business. Pointy, however, is specifically intended for small business. They offer a piece of hardware that integrates with UPC scanners and builds a simple web presence with the scanned items. The site itself is search engine optimized to capture traffic on local consumers' product searches. It’s an interesting solution for retailers across all industries that don’t have the budget nor time to create a website on their own. The cost of the Pointy hardware is a one-time fee of $299, and the set-up takes only minutes.

Biometric Fingerprint Verification on POS System

A number of different vendors have started to build hardware that requires cashiers and store managers to use a fingerprint reader to log into the POS system. The main goal is to cut down on employee misconduct (theft, “punching in” for someone running late) by tying a log-in to a fingerprint instead of a username and password that can be shared. At this time, we know that Magstar Total Retail has begun offering the service, and it’ll be interesting to see if other POS vendors in the wine and spirits industry do so as well.

Sophatar (www.sophatar.com)

Given the strong themes of personalizing in-store shopping, it wasn’t surprising to find many hardware vendors with this aim in mind. Sophatar is an example of a young company whose solution is to couple Apple TV’s/iPads with a companion mobile app for consumers. If a consumer has the app installed, Apple TV/iPads can interact with the user via Bluetooth signals and customize the display based on their information. The example at NRF showed advertisements on key items in a grocery aisle based on profile preferences that can be based on customer sales history and/or profile preferences the consumer sets in the app.

CashStar (www.cashstar.com)

CashStar is a Portland, ME based company that specializes in “prepaid commerce solutions”. We had the pleasure of being able to sit in on a talk they gave regarding work they’ve done with Nordstrom.com and the “Give as eGift” function on their website. The service shows how Nordstrom.com has functionality to let someone select a gift, enter in the recipient’s information, pay for it, and then alerts the recipient via email of the gift selection. The recipient can then either accept the gift and specify the shipping address, or exchange the gift for something else or convert it to a gift card.

Digital Price Tags and Product Info Displays

One of the most common pieces of hardware on the floor of the Expo were digital price tags that integrate pricing data from the POS system. What was notable was the range of different options, which included variations that added product descriptions. The pricing of this hardware is still on the expensive side, but we’ve seen a few stores implementing it to some extent. Besides giving the shelves a clean, uniform look, it’s also helpful for making price adjustments more quickly, efficiently, and accurately.

Wine stores selling online have had relatively open access to consumers in the major US wine markets, which has been a welcome addition to their local business. While some laws have been in place that should limit these shipments, there has been lax enforcement at state agencies that are reluctant to take action beyond their jurisdictions. Retailers have been able to find sales in this grey area between the rules and enforcement. However this environment is changing as retailers face the limitations of their legal standing.

Over the past few months both FedEx and UPS have sent “cease and desist” letters to retailers in several states that have shipped alcohol across state lines into New York. The NY State Liquor Authority is putting pressure on the carriers to block out-of-state stores from shipping to NY consumers. While the SLA has no jurisdiction over retailers in other states, they issue permits for the carriers to fulfil wine shipments in NY. Failure by these retailers to halt NY shipments would jeopardize all shipping privileges with the carrier. Meanwhile, retailers in NY enjoy legal intrastate shipping privileges for both wine and spirits.

UPS in particular has begun circulating a strict new retailer wine shipping agreement. Feeling the heat from a related lawsuit where UPS is accused by NY of violating tobacco shipping laws, they have tightened up their policies. An Addendum to the agreement outlines states where retailers can ship. The list details Reciprocal states (5), Permit states (8), and the few states where no permits are required (3). It also makes the distinction, for the first time, between direct to consumer shipments by a winery and retailer; a distinction that does not favor retailers.

Wineries have, of course, had their day in front of the Supreme Court and won a major battle with the 2005 Granholm decision. That decision established the principal that out-of-state wineries could not be discriminated against by laws that restricted shipping while in-state wineries were permitted to do that same. The Granholm decision also cast doubt on whether reciprocal shipping laws between states is constitutional.

Retailers have been trying to establish the basis for a similar decision in their favor since it became clear that states were treating them differently from wineries. In recent months, two legal actions could signal a change in their prospects. The Texas Package Store Association has asked the Supreme Court for a Writ of Certiorari, that retailers should be treated the same as wineries, and not be discriminated against when shipping to consumers from out of state. A further case filed in Missouri challenges that state’s reciprocal shipping law for retailers. The question is why a state law can favor retailers from one state but not another.

For a retailer who is concerned about competition from out-of-state stores, it is tempting to encourage your state agency to enforce shipping restrictions in the hopes it will protect your business. The majority of your business may be local, but you are vulnerable to competition from big box and grocery on that front too. Having access to out-of-state wine consumers helps diversify your customer base and strengthen your product selection so you are less dependent on core brands. The consequence of shipping restrictions is the limiting of your own access to consumers in profitable markets as carriers enforce the shipping laws of each state.

By the time you read this, the window for making large-scale changes to your digital presence or online marketing strategy will be nearly closed. That said, for businesses keen on making adjustments to impact their online sales this holiday season, there are a number of product marketing services (often referred to as “product feeds”) that can be implemented quickly to create immediate impacts on website sales.

Wine-Searcher as a Starting Point

Most stores selling wine online know about Wine-Searcher, which has been the largest online marketplace for buying and selling wine for almost two decades. If you have an eCommerce website you’re likely already submitting a product feed to Wine-Searcher as they have a free listing service. However, the free listing offers very trivial amounts of exposure, and it’s only with a sponsorship that you can gain traffic and sales that will actually impact your bottom line. In the last couple years, however, the sponsorship program’s costs have become very complex where stores pay a fixed rate at first, and then pay $50/month + $0.32/referral. What’s even less clear is that the “referrals” don’t only include traffic to your website but also include anyone that simply visits your Wine-Searcher.com merchant profile page. With the help of Beverage Media retailer network, we can estimate that stores actually end up paying about $0.47 for each click-through to their website.

All in all, the costs have become substantially higher to run the sponsorship program, and the lack of tools for limiting ads by geography make this an impossible service for stores that cannot offer interstate shipping. Still, despite this, there’s no denying the traffic and sales from the service. The average store on our network finds the costs of the service are about 8% of the sales they obtain from it.

Vivino: Making Moves

After securing $25M in funding in January 2016, Vivino has quickly emerged as another service where online retailers can submit and list products. Like Wine-Searcher, they have a free listing service, but paid sponsors get deeper exposure as they’re incorporated into in-app purchases. Vivino has adjusted their pricing model during the course of the year, but in its current iteration, they take a percentage of each sale, and, for in-app purchases, they want the store to honor a $15 flat shipping rate. The in-app purchase “$15 shipping” is a bit of a sticking point for stores that might spend $50-$65 shipping a case of wine across the country, but Vivino offers their sponsors a simple tool that lets them “turn off” specific states and limit the ad targeting to specific regions.

Google Adwords Rewards Experimentation

Google Adwords, a search engine marketing service, has an “ad type” called “Product Listing Ads” (PLA) which allow stores to upload a product list and populate “ads” under the Shopping section of Google.com. A store can set bids on the different items, and pay those bid amounts per click (the higher the bid, the more exposure). The return on investment (ROI) for this service can vary considerably based on how a store sets up their bids and ad targeting (ads can be limited by geography, bids can be adjusted by product category, price, etc). That said, stores that experiment and continue to optimize their ad settings often tend to get profits as good as any of these services.

While these 3 services are perhaps the best options to impact your online sales immediately, other product advertising options have started to emerge. Stores that power their mobile app via Drync enjoy product listings on eBay.com. Facebook also has quietly released a set of tools to set up dynamic product-based ads, which offer ways to target people that have already been to your site. Altogether, if a store wants to give their online sales a surge this holiday, there are many options to look at.

When it comes to product attributes, wine is a particular tricky commodity. When examining a single wine, there are many factors that consumers may want to know before making a purchase. Most recently, one of these attributes--vintage--has been the center of a lot of scrutiny. This past May, California-based retail juggernaut BevMo! was served a class-action lawsuit for advertising in-store and online (mostly on wines under $25) vintages that didn’t match the products they were selling. Following on the heels of this story, later in May, TINA.org (“Truth in Advertising”) conducted an investigation of 30 liquor stores in CT and published very similar findings.

Although this has become a recent hot topic in the news, by no means is vintage accuracy a new problem. In 2007, the Washington Post published an informal study by an FDA food scientist, Alex Jordan, who discovered the same discrepancies in Virginia, Maryland, and Washington DC retail stores. Over the span of a decade, there’s not a sense that much progress has been made on this common data inaccuracy, nor has anyone attempted to explain or suggest solutions to the problem. The exposés simply suggest retailers need to own up and fix it.

Unfortunately, the “problem” goes beyond how retailers manage their stores. Much of the issue has to do with nebulous importance of vintage. While everyone agrees that vintage accuracy on luxury wines, where this attribute conveys much about the quality, drinkability, and collectibility of the item is incredibly vital, this focus of all of this news have been centered around budget-friendly wines, where, despite variations in reviews and ratings, generally the actual value of the product doesn’t change. That’s why it’s not surprisingly that when a vintage changes on a given wine that a store regularly stocks, the retailer might not even realize it. Often the newer vintage of a product will have the exact same wholesaler item number at the same exact cost, and it arrives without any suggestion that it’s a different item.

Tracking those subtle vintage changes for potentially thousands of wines, and ensuring all advertising, shelf-talkers, and online listings are perfectly aligned is an extremely daunting task. The best tool here, for retailers, is their Point-of-Sale (POS) system. Yet even here, unless a retailer implements a wine-retail specific solution, such as mPower or Atlantic Systems, the system might not even offer a unique field for tracking vintage data. In those cases, it’s on the retailer to think ahead and customize their system’s fields to track this uniquely and ensure that field is constantly reviewed and updated.

Perhaps, thankfully, most of the focus has been on in-store signage rather than retailer websites because, here, the challenge becomes even more formidable. If a store has any hope of maintaining an inventory accurately, integrating their POS system and importing constantly inventory updates--including vintage updates--is a must. Here, it’s worth noting that maintaining the vintage in a unique field is even more important. Even if a store simply inserts the vintage at the end of the product title field, there’s opportunity for that information to get parsed incorrectly or lost in translation by advertising partners.

The recent BevMo! and TINA.org exposes will likely not be the last incidents we hear about inaccurate vintage data ending up on shelf-talkers and websites. Realistically, given how this attribute is often subtly updated on budget-friendly wines, and how most POS system solutions don’t include “vintage” as a native field, we’ll likely hear the same type of reports well into the next decade. That said, as frustrating as the situation is, the gravity of the BevMo! situation provides a good “wake up call” for retailers to examine what they’re currently doing to monitor vintage changes and how they can improve their internal procedures to minimize inaccuracies.

Over the history of online wine sales, retailers have been buffeted by the policy shifts of web giants that control much of traffic from US consumers. Amazon, Google and eBay in particular have all embraced alcohol sales at some point, only to back away and ban it from their websites. Since a ban on beer and spirits sales in 2012, eBay has quietly been selling wine from licensed retailers, but treating it as a non-specific category that didn’t require any specialized navigation.

A few weeks ago eBay announced to the world that it was ready to champion online wine sales with eBay Wine, a structured storefront that aims to become a shopper’s destination for wine purchases. By embracing licensed retailers, through a partnership with the mobile app Drync, eBay looks to be countering Amazon’s listings from domestic wineries. Drync is managing the inventory feed from the retailer to eBay and making sure products display a compelling image.

The appeal to the retailer is being on a platform that attracts 162 million active buyers globally, with 300 million searches every day. Over time eBay intends to increase marketing of the wine storefront to its audience, driving more traffic to retailers. Retailers pay eBay 10% of each completed sale, and a monthly service fee to Drync which includes participating in their app’s marketplace listings.

“The number of retail partners is continuously growing but with the current retailers, eBay shoppers are able to access a huge selection of wine and have that wine shipped to the majority of the US (up to 45 states),” says Alyssa Steele, Divisional Merchandizing Manager for Home & Garden at eBay.

So far the feedback from participating retailers is that the sales are coming through and that business is good, however the system is not so efficient for managing customers and processing orders. Stores are selling everything from Arbor Mist Moscato to bottles of The Prisoner and Silver Oak; and picking up local customers who research the eBay retailer and chose to visit the store.

The biggest setback eBay retailers report is the inability to block sales from customers in states where they can’t ship. “Each individual wine seller on eBay is required to include in each product listing the states to which they are legally able to ship”, says Steele. But customers are ignoring this fine print leaving stores with no choice but to cancel these orders. Fortunately, since eBay is also the payment gateway for the credit card transaction, they can waive all fees for a cancellation. But eBay needs to come up with a better solution that blocks orders from do-not-ship states. They also need to help retailers target customers in states where they can sell, so retailers in MA and other states where they can only deliver locally can participate.

“eBay does have some geo-targeting capabilities that will come into play once they deploy the BOPIS (buy online pickup in store) capabilities. We have several MA BOPIS retailers ready and waiting to be put up on eBay,” according to Drync CEO Brad Rosen

Drync has recently pivoted from offering a consumer-facing app to becoming an app solution for retailers, including a white-label app that will place a retailer’s logo on their customer’s homescreen. The addition of the eBay feed service is a strong compliment to an app offering that helps build loyalty among a store’s core customers but doesn’t promise to deliver new customers. The eBay feed can satisfy that demand from stores, and Drync should be able to convert satisfied eBay retailers into new app customers.

eBay sees the wine category as a huge opportunity and will likely expand to include winery listings. “We’re absolutely looking to grow this category and like our other categories, eBay is a partner – not a competitor – to our sellers”, says eBay’s Steele. Stores have reason to be nervous about this remembering how Amazon abandoned them a few years ago. For now the opportunity is with retailers and hopefully this giant of consumer traffic will remain a reliable source of wine consumers.

To comment on this column or to learn more about how Beverage Media can help with a website for your store visit BevSites.com, or contact James Laurenti at 617-864-1677. Follow us on twitter at twitter.com/bevsites.

Years ago, when most wine and spirits stores started to build websites to sell their product online, the impetus was to get new direct sales from wherever possible--often from outside their local market. Businesses would even set up sites that were distinctly branded to set them apart from their brick-and-mortar business, so they could offer separate, more aggressive pricing. Today though, with a more crowded online marketplace, opportunities have shifted, and the greater value of a website lies in providing a more useful, convenient online shopping tool for your local market.

Admittedly, it’s hard to measure the value that a website provides to your brick-and-mortar business, but heavy-hitters like Forrester and Adweek, have conducted a lot of research in this area. The most significant, key customer behavior that illustrates a measured connection is a concept called webrooming. Webrooming is best described as the opposite of showrooming. Whereas showrooming involves using a brick-and-mortar experience to gather research to buy online (the classic example is looking at a TV in-store before purchasing the same model for the best price online), webrooming involves performing all of your research online before you make a final purchase in a brick-and-mortar store.

What makes webrooming so important is that it’s incredibly prevalent. Adweek’s research suggests that two-thirds of customers engage in webrooming, and Deloitte notes that “digital interactions influence 36 cents of every $1 spent in a brick-and-mortar store.” Forrester takes it further and estimates that in 2017, webrooming will be responsible for $1.8 trillion in brick-and-mortar sales, while only $360 billion in direct eCommerce sales will take place. These figures are so staggering that even if they’re an overestimate, they indicate that webrooming is a significant behavior and is something to consider when building eCommerce solutions.

The reasons why webrooming has become so prominent have also been explored through studies--particularly by Adweek--and most of the takeaways likely will not surprise you. When asked “why would you look online for an item before going to the physical store to make a purchase?” three of the most common responses included wanting the product more immediately, wanting to physically “touch and feel” an item before buying it, and wanting to ensure an item was available before committing to a shopping trip. Though this article has spoken about eCommerce generally, it’s easy to see how these reasons relate to the wine and spirits industry. For local customers, they often want their favorite products immediately, and they want confidence that they’re getting the right item. An eCommerce website can help them gather all of the information they need before they step in the store.

When considering building an eCommerce solution or measuring the value of one, it’s important to keep in mind that, today, it’s not a separate entity whose value can be measured easily just by your direct online sales. So much more value today lies in how local consumers use your digital presence to enhance their experience with your business. Your website is a 24/7, convenient tool that can allow consumers to access you and gather information on your hours, address, items, and services at all times. But your brick-and-mortar store, is your showroom, a physical place to explore and interact. These two entities go hand-in-hand.

Before any business decides to build an eCommerce website, one of the most important questions they consider is if the project will be worth the costs. When compared to building a simple content site on a platform like Wix or Squarespace, eCommerce solutions cost more as they require more features pertaining to managing inventory, orders, shipping and delivery policies, and more. At the same time though, having the ability to show your inventory and let consumers place orders makes an eCommerce site more valuable. How valuable though? Enough to make it worth any store’s while?

As a vendor that sells and supports eCommerce websites, we know that the sales figures per store on our network vary vastly, which makes it hard to describe what’s “typical”. That said, we conducted some research, examining traffic and sales figures for 15 websites launching between 2013-14, to try and parse out how websites grow during the first two years after they launch and what factors affect this growth. While many of the stores wildly differed, two very obvious factors emerged: marketing ad-spend and the store’s online presence prior to the launch.

The first factor, marketing ad-spend, shouldn’t surprise anyone. Stores that invest money into advertising that generates traffic (and inevitably sales) grow more quickly and those that don’t. The second factor though--a store’s online presence before the eCommerce site launch--tells us a more interesting story. For stores that had a content site prior to launching their eCommerce, on average, they end up with more total sales after two years. They don’t grow faster than stores that didn’t have a previous site, but they start with more initial traffic making it easier for them to hit a higher volume of sales.

That said, not everyone has a previous website and not everyone is ready to commit additional funds for digital marketing. To that end, we wanted to dig further and assess the growth patterns of a store that has just set up a search engine friendly eCommerce site and submitted free product listings to Wine-Searcher and other free wine directories. The subset of stores in this situation from our study, on average, received 10-20 website visitors per day and about 1 order per week during the first 3 months they are live. Those numbers naturally increased though over time, and during the collective first year of business, the average store processed 94 orders for about $14,773 in sales. During the second year of business, the average store almost doubled in growth--about 184 processed orders for $28,918 in sales.

Having a relative sense of an eCommerce site’s growth rate and potential net sales over the first two years--without taking in account marketing and a previous online presence, helps answer the question if it will be worth the costs. If those sale figures are not worth the costs of a potential project a store should first ask if they’re able to commit a digital marketing budget to grow the business. And if not, consider first building a content-based site that showcases your business, announces your events, and highlights your sales and specials. By amassing an audience on a less expensive content solution you are are building an active audience on a website domain, which, if you migrate to an eCommerce solution, will generate more revenue more quickly.

In the beverage industry, January is a good time to reboot, reorganize and take stock of things that are done well and those that can be improved upon. While each store should assess and benchmark their own individual performance, we conducted a study of site performances of the 130 mature websites on our eCommerce network who utilize out-of-state shipping.

Using data obtained from Google Analytics from 2014 and 2015, the median average of sales in 2014 was 75% higher than in 2015; the rate of canceled sales was also higher. In 2014, the average store had 63 canceled sales out of a total of 429 resulting in 14.7% loss. In 2015, an average of 47 cancelled sales out of 379 resulted in a loss of 12.4%. The average store experienced a 4.5% growth in net sales, despite the fact that the average store received fewer actual sales. The main factor in the growth was fewer cancelled transactions.

Reducing cancelled sales is not just good for increasing net sales. Canceling sales results in more than just lost revenue; it can be a resource drain, requiring employees to spend time contacting clients who can't get what they ordered and are likely not to return as customers. Fewer canceled orders results in more business and happier customers.

Part of this is the result of shopping feeds, such as Google and Wine Searcher, who are constantly improving by targeting customers by geography and shipping availability that result in better quality leads. Using these feeds to drive traffic to your site is nothing new, but they area constantly improving with updates that pick up on the details of your shipping and delivery policy. There are also a number of ways stores can further reduce their cancelled transactions. Well, having accurate inventory for one (had to say it), without which nothing mentioned hereafter will be much use. That said, here are two ideas to help reduce cancelled sales.

Limiting sales or turning off the shopping cart on highly allocated items. By listing products without a shopping cart, they can still drive traffic to your site and let customers know cost and availability.

Have your shipping info clearly defined. Maybe you area a store that will ship wine out of state but not liquor. Make sure that this is clearly stated and that liquor is made not available for shipping out state.Having clear parameter about what and how you ship will result in more happy customers. It will not only help drive traffic to your site, but is sure to increase the conversion of that traffic into sales. That is something wroth celebrating!

Payment processors, gateway providers, POS vendors, and retailers alike have scrambled since 2012, when the major U.S. credit card issuers announced their plans to implement EMV, a technical standard to transmit payment data through a computer chip (in lieu of the traditional magnetic strip). To incentivize businesses to make the change quickly, Visa, Mastercard, and other card issuers created a policy that after October 1st, 2015, in an instance of card-present fraud, whichever party is the least EMV-compliant will be liable.

If you haven’t upgraded your business’s hardware yet to accept EMV credit cards, and if you’ve run into roadblocks that are out of your control, you’re not alone. According to a September 2015 survey by The Strawhecker Group, just 27% of merchants anticipated being EMV-ready by October. What’s more, they predicted that only 44% will adopt EMV by the end of the year. In fact, it’s expected to take approximately 2 years until most merchants convert.

From a business’s perspective, the transition can easily seem like a confusing mess--especially since stores have to rely on their POS vendor/reseller to provide and implement new hardware. For these companies though, they’re often stuck between a rock and a hard place. Kevin Kogler, President of Microbiz POS, described his experiences with The Point of Sale News, saying, “We are finding that the processors, gateways, and processing equipment vendors are falling behind schedule. This is particularly acute with many of the smaller players finding that they do not have the financial and employee resources to meet the timing of the looming EMV deadline.” The overwhelming feeling is simply that it isn’t realistic to expect the entire nation’s payment system to move to a new standard in a matter of a few years.

But the most important question, perhaps, is, once the majority of merchants are converted, how will this cut down on fraud? First and foremost, EMV only pertains to card-present transactions, where the computer chip in the card interacts with the card reader. This segment of fraud (commonly involving counterfeit credit cards with replicated magnetic strips) likely will decrease considerably as an EMV card cannot be replicated. That said, card-not-present transactions (like phone and eCommerce orders) will not see any new fraud protection benefits. Moreover, it’s likely that as the U.S. implements EMV, card-not-present fraud will surge since card-present fraud will become more difficult to commit. Ominously, in the United Kingdom, during the 3-year period after the country implemented EMV, card-not-present fraud increased by 79%.

While implementing EMV and mitigating card-present fraud liability is the main challenge on the minds of merchants today, stores should use the post-holidays respite to ensure they have a plan for combatting card-not-present fraud moving forward. For stores with eCommerce websites, integrating a payment gateway that verifies payment data is a sound initial step for protecting yourself. Inevitably, though, while this will help you minimize your exposure and ultimately help bolster your case in instances of chargebacks, there is no such thing as perfect protection. To minimize the time you waste fighting fraud, research common signs of fraudulent transactions and educate key staff. EMV will help shut the door on in-store purchase fraud, but there’s a lot of vulnerability with online ordering.

If your case is still pending, read on, as action is required by Sept 15th.

As many of you know, during last year's holiday season there were a barrage of lawsuits stemming from an unscrupulous law firm in IL that targeted out-of-state retailers. The lawsuits aimed to take advantage of Illinois's unique "whistleblower" laws that permit law firms to pursue legal action on behalf of the site. The firm in question, in particular, specialized in exploiting ambiguities in the IL tax code and entangling out-of-state retailers (across all industries) with lawsuits. At this juncture, many retailers and wineries have already had their cases dismissed. However, the IL Attorney General's office as taken further steps to end the issue once and for all. There is legislation under review (that will likely be approved in the next two months) that will further cement that out-of-state retailers don't have to collect sales tax on shipments to IL (with a few minor caveats). Additionally, the Attorney General has stated that she will exercise her prerogative to dismiss any pending cases provided the defendants can submit proof of their compliance by September 15th. For full details on this story, click hereto be redirected to the wine and spirits legal blog BeverageLaw.com. Don't hesitate to reach out to us with any additional questions!

To sell more wine and stand out in a crowded field you need to provide your customers with a positive shopping experience. Most businesses take this to heart and in a survey of “consumer brands” 81% say they have a working holistic view of their customers? But in the same study only 37% of consumers say their favorite retailer understands them? As much as these businesses think they know their audience, their customers are saying that doesn’t match their reality. This customer experience gap is an opportunity to stand out; to be more relevant and valuable than your competition.

A recent study called The Consumer Conversation by Econsultancy highlighted this gap in customer experience. Among their findings was that consumers found only 35% of communications from their favorite companies were relevant. By lifting the quality of your customer communication you can rise above the competition. Effective ways to do this are by personalizing your messages and planning your communications around the lifecycle of your customer.

One of the best opportunities to start this conversation is when a customer has their first interaction with you. Make sure the customer knows that you want to make this the first of many transactions. A welcome message is a great way to set the tone and it might be appropriate to send a series of on-boarding messages to help your customers make the most of your services.

The primary tool that businesses use to reach their customers is email, and while a recent survey by Ascend2 found almost 90% of marketers consider it effective, it would be a mistake to ignore the opportunity to extend communication to other platforms. Your customers may prefer to receive communications on social media, an in-store kiosk, in a catalog, or even just your website.

With email the goal is to get your customer to click on the link that leads to your website. It sounds so easy when put it like that; but it can be challenging to keep the open rates high. So messages need to be tested and optimized; the subject lines need to work to get the recipient to open the message, the message needs to set up the call to action, the link needs to lead them to an effective landing page, and on through the interaction.

There are other opportunities to stand out with your communications. A retailer might send abandoned cart messages; you might send emails out if something is wrong. You might ask your customers to write a review of the product on your site, or a review of your business on a social media site. Many of these messages can be delivered as emails that are automated based on account activity, or behaviors that trigger a message, and time spent optimizing the message will be well spent.

Customer experience can be quantified as the sum of every interaction between your business and your customer. If in balance the experience is positive, a customer will likely spend more, may promote your business and could be willing to pay a premium to remain in the relationship. Mapping these key interactions in advance and being ready to show that you understand your customer will help set your business apart.

One common question that has come is what stores can do if they have "personal" eRobertParker.com subscriptions, which they want to convert to "commercial" subscriptions.

This is the process laid out by the eRobertParker.com team:

The first step is to set up your new Commercial Subscription with a different username from your existing Personal Subscription. Once the Commercial account is created we can cancel your Personal Subscription and credit 1/2 the time to your new Commercial account due to the difference in price for personal ($99) versus commercial ($199) per year. In addition, we will credit 3 extra months Free of Charge.

To finalize the conversion you'll need to contact support@erobertparker.com to cancel your Personal account. you will need to provide your new Commercial Subscription Group ID or username as well as the email address associated with your Personal Subscription.

You can review the Commercial subscription details, commercial subscription agreement, FAQ and purchase application at the link below. Please note that if you have multiple outlets in your group that are using the scores and tasting notes you should create a multi-user, group Commercial License to provide access to eRP.com for the team members.

https://www.erobertparker.com/subscriptions/CommercialSubscription.aspx

I'm afraid this email has been a long time coming. We tried the carrot and most of your bit, but at long lastThe Wine Advocate has begun to employ the stick for those who held out.

If you received a polite email from Matilda @ RobertParker.com saying that you have Wine Advocate scores on your website without a commercial subscription, then it is time to make a choice. Either you need to pay $200/yr for a commercial subscription to eRobertParker.com, or we need to turn off the Wine Advocate reviews on your website.

There is some confusion about the Wine Alert service that is also offered by the Wine Advocate. Wine Alert lists your items on the eRobertParker website and provides a feed of ratings for your inventory. However to show these ratings on your website you still need a commercial license, these are separate programs.

If you have upgraded your eRobertParker subscription and have a commercial subscription to tell us about, please enter it into the form on your Admin > Configurations page that says “eRobertParker.com username".

Of course, if you have any questions please let us know.

Shopping carts are littering the internet; the question is whether they represent an opportunity to increase sales. This can be a charged discussion that provokes a range of strong opinions. Merchants may see the abandoned carts as representing time wasters, or as money left on the table that they should grab. Consumers either had no intention of buying something and don’t want to be hassled, or they welcome a chance to reengage with a merchant especially if offered a discount.

First of all, what’s going on that potential customers are stopping short of pulling the trigger on their order? Researchers have grouped the primary reasons for abandoned carts into the following categories:

Unexpected or higher costs. They don’t know the full cost of their order until they load up the cart to calculate the impact of shipping and sales tax.Turned off by the shopping experience. They want to use a payment or shipping method that is not supported, or have concerns about security or privacy. Maybe the store won’t ship wine to their state!

How do you separate the customer that thought your prices were too high, from the one who doesn’t need a discount, but wants more time? Does the cart allow items to be held for up to 30 days without logging in? If they have concerns about the shopping experience how will you know? How do you reach these customers anyway?

Digging into the data on the retailer websites that Bevsites host we can share some insights that will explain what we consider the smartest strategy for tackling this issue. First if your shopper loads up the cart to calculate shipping and tax, and then disappears; you don’t have an email to communicate with them. As it turns out, for the retailer sites we tested most consumers abandoned the cart before logging in; only 4.5% of the total dropped carts were logged in. So for a website which does $1.5M per year, there was 1 customer every 2 days that could be emailed about their abandoned cart. Making assumptions about average sale and a generous conversion rate on the email we think this could increase sales by up to 1%. Nothing to be sniffed at, but we think there is a bigger opportunity here.

The other 95% of customers with abandoned carts can be reached using a service called remarketing; where a targeted ad is placed on a different website based on customers’ behavior on your own website. Examples of common sites that have remarketing programs are Google and Facebook, and you don’t need to have an email address to reach these customers. Remarketing works by setting a cookie on the shopper’s browser so the next time they visit a search engine or watch a video of frolicking cats you have the opportunity to remind them to revisit your website.

While abandoned carts may represent an opportunity, it bears saying they probably don’t amount to lost sales. Sending emails to shoppers about a dropped cart runs the risk of creeping them out. We prefer the approach of remarketing as a subtle way to place an ad in front of a warm lead that could benefit from some additional brand visibility to increase loyalty.

We hope you’re all well! In the past couple of weeks we have had a number of announcement-worthy things to occur that we wanted to share with you:Bon Voyage, Simon! As many of you know, Simon Lee has left our support/project management team as of last Friday. In the meantime, all of his e-mails will forward to the other members of the team. So if you’ve e-mailed Simon you may see Andrew Hammond or James Laurenti replying in his place. Additionally, Ian Tjornhom, our content/data manager will be helping manage our marketing services in lieu of Simon. We fully expect this transition to be very smooth. However, if you have a pending request with Simon, and you haven’t received a reply at this time, please reach out to James and Andrew to help facilitate this. At this time we are also finalizing the interview process and plan to bring a new team member into the office by mid-March. We’ve had many excellent candidates at this time, and we are looking forward to introducing our newest team member quite soon!Store Pick-Up Only Items Besides the new admin area redesign, which I’m sure everyone has noticed by now, we did quietly release a new feature last week. Our system now has the ability to let stores offer certain SKUs as store pick-up only. At this time, the feature is still in its infancy and is something that just lives within our eStage software. We have plans to build upon it though as receive initial feedback. If you’re a store that wants to only offer a certain product category for in-store pick (e.g. items over ZZZ ML; beer/spirits; etc.), and you’d like to pilot this feature… please respond to this message, and we can set up a time to make the change in eStage for you. This is a feature that hasn’t so much been in demand as much as it is something we think stores will find increasingly useful. Our reporting shows that the fastest growing segment of sales is with local, in-market users. More people are using eCommerce websites for their local shopping than ever before. And to that end, we want to make sure you have the tools to offer a local customer anything you would like to offer him in-store. Abandoned Carts It came to our attention last week that nearly everyone received an e-mail solicitation sent without anyone signing up for the mailing list. One aspect of the e-mail though is that it highlighted a feature around abandoned cart e-mails, and many people have inquired if this is a feature that we have or anticipate having in the near future. During late December (which is when we tend to decide our development agenda for the first half of the following year), we gave this a lot of consideration as we know abandoned cart e-mails are perceived to have quite a bit of value. Our concern, however, is that given the nature of selling wine online, the value is undermined by the fact that many abandonments occur before an actual e-mail address is captured (often when someone gets a shipping quote or realizes the store doesn’t ship to their state). To test this theory, we ran a script developed in-house to compile all of the cart abandonments across the network for the month of November. The final results were… underwhelming, with most abandonment occurring before the e-mail was captured. We went further and calculated the estimated volume of abandonments over the course of the year, and then determined how many might convert if the person received an abandoned cart e-mail. Ultimately, we arrived at order amounts that would likely account for less than 0.5% of a store’s overall volume for the year. To that end, we’ve decided this isn’t a feature that makes sense for us to pursue. Even if it’s vogue and popular in eCommerce blogs and e-mail solicitations alike, we don’t want to use our resources to deliver something that—so far—seems to have a negligible value to a store’s bottom line. We’d much rather use our time to try and come up with some features that we think will have a greater, strategic value to you and will ultimately make it easier for you to grow and succeed online. Store pick-up only items isn’t the only new thing to come… but more on that later.Finding Conversions on Non-Buyers We do acknowledge, however, that abandoned cart e-mails really bring up a great digital marketing challenge: what can we do about re-engaging people that were on the site but didn't buy something? Our belief is that “remarketing lists”, which are still a relatively young marketing tool, are going to be key here. A remarketing list, in short, is a user list of people that have previously been on your site or on a certain page that you can target ads at. Unfortunately, Google Adwords (who currently has the most developed remarketing tools) is not allowing the use of remarketing lists in ads promoting the sale of alcoholic beverages at this time. That said, time and time again we’ve seen Google restrict the use of new marketing tools in our industry only to find the rules later loosen. We are banking this will happen again, and when it does… we will be ready to seize the opportunity and help our stores take advantage of this marketing asset. If you have any questions, please don’t hesitate to reach out!

At the end of each year we review the performance of the eCommerce websites on our retailer network in order to try and understand how selling wine online is trending and changing. This year, in addition to looking at general traffic and transaction data, we have started to look more closely at how and why certain types of promotions generate more sales than others.

FREE SHIPPING DOMINATES

The clear winner in our study was free shipping. On average, pages featuring free shipping generated over twice as much revenue ($19.53 per unique pageview) compared to its runner-up ("Rated Items" at $7.81 per unique pageview). There wasn't any particular formula that seemed to generate the best results; the most important factor is simply having a wide enough selection of free shipping wines so that most product categories are covered. This type of promotion can be challenging given the expensive nature of shipping, but if you have the margin to offer this sort of deal, this appears to be the most impactful type of feature that one can run on a website.

CLOSEOUTS, RATINGS, AND LOW PRICING We also found that pages featuring closeout specials, rated items and items under either $10 or $15 also provided a greater amount of sales than many of the other common features (such as "Staff Picks", "New Arrivals", or "Fine and Rare Wine"). The most effective examples tended to either combine low pricing and high ratings or were closeout sales featuring items selling over 25% less than their advertised regular price. While it's probably not surprising that ratings and heavy discounts have a strong effect on online purchases, one less obvious takeaway here is that wines at everyday prices (under $20) can perform very well.

STAFF PICKS SUCCESS BASED ON RELATIONSHIPS "Staff Picks" promotions were the most common type of feature across our network, but ultimately landed in the middle of the pack in terms of generating sales. However, pages containing a staff member's name in the title were far more effective than ones generically called "Staff Picks". This should serve as a reminder that just as one might ask a trusted staff member in the store for a recommendation there's a willingness to place the same sort of trust in an online promotion.

While these findings can help you brainstorm features to add to your websites, it's important to make sure your brick-and-mortar effort help you maximize the effectiveness of these promotions. For example, most most of these offer require a store to develop an inventory where there are subsets of items with sizable margins or rated items with low prices. In the case of "Staff Picks", the success is also tied closely to the rapport the store's personnel has with local customers. As with so many other facets of selling wine online, the foundation of a successful promotion often starts at the brick-and-mortar level

For well over a decade, Wine-Searcher has provided arguably the most effective marketplace to buy and sell wine online. Consumers can search, locate items, and ultimately connect with wine retailer websites where they can purchase. From the retailer's perspective, Wine-Searcher also delivers typically a higher conversion rate (click-thru traffic that leads to sales) than other website referrers.

The $400 Question When it comes to listing products with Wine-Searcher, stores have an option to pay for a sponsorship to increase the exposure of their product listings. Today, given how crowded the online marketplace has become, having a Wine-Searcher sponsorship is a key factor in developing significant traffic from the site. That said, with a price tag of $360-$440/month (for retailers with 750+ products), it's a substantial investment—one which sometimes scares off would-be participants.

What's more, the return on investment (ROI) for this service can vary greatly among retailers. Stores with a higher volume of expensive wines tend to have better success than stores that mainly carry common call-brands. In a conversation with Ross Brown, Wine-Searcher's Sales and Marketing Manager, he acknowledged that click-thru traffic on products at certain price ranges is not a metric they track, "but we do know our customers are skewed toward the top end of the marketplace.” Stores with more eclectic selections and/or aggressive pricing also tend to perform very well.

This past month we decided to conduct some research to see how some of these factors can be used to predic ROI. We chose, in particular, to focus on the volume of expensive wines a store carries. For stores on our network with a Wine-Searcher sponsorship, we calculated their estimated ROI of the service for 2014 vis à vis the number of wines they list over $50.

Correlation and Conclusions

As we expected, when we plotted the data, we found a moderate of correlation between how many wines over $50 a store carries and their overall ROI with the service. More importantly though, nearly all stores carrying 200+ wines over $50 received significant sales greatly outweighing the sponsorship costs. For these stores, even those selling at aggressive margins can expect to turn a profit from the direct sales alone.

For stores under the 200+ wines over $50 threshold, the ROI varies considerably. Some stores perform phenomenally while others have less impressive results. A closer look suggests that some of the other suspected factors—pricing and uniqueness of product selection--more greatly affect the ROI for this group of stores. The best performers tend to have less common products and low pricing.

If you're uncertain that your stores is a proper match for the service, October offers a strategic opportunity to give it a trial run. By signing up for a fixed-cost 6-month sponsorship in October, stores can enjoy the service during busiest, most lucrative eCommerce months of the year, which will mitigate some of the risk of investment.

----------------------------------------------------------------------------------------------------------------Study Details <strong><a href="http://www.bevsites.com/wp-content/uploads/2014/09/ws-article.png"><img class="aligncenter size-full wp-image-2197" title="ws-article" src="http://www.bevsites.com/wp-content/uploads/2014/09/ws-article.png" alt="" width="815" height="407" /></a> </strong>

This study involved looking at Wine-Searcher sponsors that sell online using the Beverage Media eCommerce platform. Only stores participating in the 750+ item sponsorship were used. Additionally stores in markets with shipping restrictions (e.g. Massachusetts, Delaware) were excluded.

To estimate ROI we calculated [the cost of the sponsorship] ÷ [total sales where Wine-Searcher is the referrer] * 100%. We used the time frame of January 1- August 31, 2014. In other words, if a store spent $1,000 on the sponsorship and gained $10,000 in sales from Wine-Searcher, the ROI is calculated as 10%. We use this figure as it's easy to relate to average product margins. In our example, provided the business is selling wine with at least a profit margin of 10%, the direct sales he's received should offset the costs of the sponsorship.

While average product margin varies from store to store, the benchmark we have based on data from our network is 20%. In other words, advertising services that can operate with a cost-percentage-of-sale under 15-20% are viewed as very healthy options for most businesses.

Two final small notes:

1) We removed the number of bottles over $50 near the far end of the x-axis primarily to help preserve the businesses' anonymity.

2) Correlation refers to the Pearson Correlation Coefficient

If you’re investing money in a Wine-Searcher sponsorship or with cost-per-click (CPC) sites you probably want to know your return on the investment (ROI). Luckily, we create and integrate Google Analytics (GA) accounts with all sites on our network so you can make these assessments. If you’re not sure what your Google Analytics log-in is, please reach out to us and we can provide you with credentials.

There are many different pieces of information you can look up in GA, but if you want to jump right into the key information on how much traffic and sales come from specific sites you advertise with follow these steps:

Log into Google Analytics at http://analytics.google.com (or just follow the link in your website's admin area).Select your store name, and select the report (there is a global icon next to the link).Use the left navigation to select Conversions > Ecommerce > Overview. When the page refreshes you'll see a section called "Top Revenue Sources". Select "Source / Medium".

This will give you an overview of the path customers used to reach your website. Some of the entries will be very familiar (e.g. Wine-Searcher). Others are worth some clarification:

(direct) / (none) are visitors who went directly to your site;Google Organic refers to people who found the site from Google by performing a natural search query. The term "organic" specifically applies to search engine queries (vs. ads)Google cpc refers primarily to Google Shopping, a paid product feed service. If you have Google Adwords separately set up, it's possible that data may be listed under this heading as well.Email traffic/sales sometimes will appear fragmented under a wide range of referrers. Usually though if you run a search against the referrals on the word "email" you can consolidate all of those entries together.

If you click on a specific source, such as Wine-searcher, you will be able to further manipulate the data and even narrow the report to look at what pages on your site do people from Wine-Searcher land on (i.e. the most common items that people from Wine-Searcher look at on your site). You can also sort by any of the data fields such as Sessions, Bounce Rate, Conversion Rate, or Revenue.

Google Analytics is an extremely powerful tool for analyzing your site traffic and sales. It can show how site performance changes over time, and it can pinpoint exactly how much value you get from an advertising source.

If you have any specific questions about how to access or use Analytics, don't hesitate to reach out to us with questions!

All best,

The Bevsites Staff

If you have maintained a website for some time you may have had a vendor approach you at some point offering services around search engine optimization (SEO). The main objective of this service is to increase your business's online visibility in relevant search engine queries (i.e. “get to the top of Google's results”). Generally speaking, these services can help your site gain additional traffic. However, at the same time if you begin working with a vendor it's important to understand what techniques they plan on using. There are many ways to approach increasing a business's search ranking, and some methods are not ethical and can lead to penalties once search engines discover you're using them.

Beware of the Black Hat

There are two main ways to go about trying to improve search ranking. You can ethically use search engine-approved techniques (“White Hat SEO”), or you can attempt to find loopholes and exploit the search engine's algorithm to get an “edge” on competing businesses (“Black Hat SEO”). While Black Hat SEO sometimes yields quicker results, it's an extremely risky operation. Most search engines update their algorithms frequently, and if one of their updates closes a loophole that you're taking an advantage of, the traffic it provided will soon disappear. What's more, Google and other search engines will penalize and potentially blacklist websites that they see engaging in this type of behavior.

Examples of Bad Behavior

A common example of Black Hat SEO is stuffing and overusing keywords in the content and HTML data of your website instead of relying on more natural prose. Additionally, vendors might set your website up with “link farms”, generic websites that only exist to create inbound links to sites to increase their page ranking. Other common Black Hat SEO techniques involve leaving spammy comments on blogs or social media sites with links to your online business. If a vendor proposes any of these techniques, consider it a red flag.

Damage Already Done?

The good news is that search engines have gotten a lot smarter, closed many of the loopholes, and most SEO vendors, consequently, tend to use more ethical strategies. However, if you've already worked with a vendor in the past that has implemented these techniques and created problems for your online business there are some things you can do to help remedy the situation. If there are widespread amounts of inbound links coming to your website from link farms and spammy social media/blog comments, you can disavow these links using tools provided by search engines, such as Google Webmaster Tools. Google can provide a list of inbound links to your site, which you can review so that you can compile a list of the bogus URLs. These can then be uploaded as a “disavowed URL list”. The process may take some time and be laborious; however, it's worth your while if it means getting back in good standing with search engines given how much traffic they provide businesses.

The examples of Black Hat SEO above illustrate the most common techniques vendors have used in the past, and, today, search engines have rendered the these strategies pretty ineffectual. To that end, you hopefully will not run into someone hoping to offer these services to your business. All that said, if you begin working with a vendor it's important to understand how they plan on optimizing your site. When they describe the effort does it sound like something that search engines would find acceptable, or does it sound like something that cuts corners? If you hear anything come out of a vendor's mouth that suggests the latter, you should show him the door.

Promote your Seasonal Selections

Old and irrelevant promotions will drive customers away when your website looks like it hasn’t been updated in months. It’s important to keep your customers in mind all year round, especially during seasonal transitions. To avoid your website becoming stale, update your promotions frequently with a mixture of seasonal products. These updates should occur in the most prominent areas of your homepage design. Promo groups are an easy way to achieve this. Rotate the products with choices that make sense for that time of the year. For the undecided customers out there, make the decision easy for them by highlighting your top recommendations for that particular season.We Offer a Graphic Design Service Creating enticing graphics is also an effective way to draw your customer’s attention to promotions. If you have a slideshow on your homepage, adding new slides each season will help keep your website fresh and engaging. If you know a graphic designer who can create new slides for your store, Beverage Media will assist you on how to update your slideshow. If you don’t know a designer, we provide a design service here in the office at a flat rate of $25 per graphic. We work directly with our clients to create professional imagery based on their ideas and promotions. We encourage you to reach out anytime so we can help you and your website reach its full potential.

Track requests, access documentation, and more!

Hello everyone! We'd like to formally announce how much we love our support ticket system (Freshdesk) and a reminder that we're building system documentation there. This thing is great. On average, our office has about 80-120 active requests at any given time. Freshdesk has given us a way to keep all of this organized, and also give us a way to see what each person here is working on at any given time. If you haven't noticed this ticket system in play yet, don't worry! If we receive pertinent requests by e-mail or phone, we separately are creating tickets into our system. To that end, please feel free to e-mail/call us. All that said, if you decide to e-mail support@bevmedia.freshdesk.com, this will submit your request directly into our system--which is monitored by James, Simon, and Andrew.

Lastly and very importantly--while you do not have to use Freshdesk, there are some advantages to doing so:

Keep Track of Requests. By having an account, you can track all of your requets and view a history of requests. Documentation. We have begun and will be continuing to build out system documentation and useful content within Freshdesk's "Solutions" section.

If you're not sure if you have a Freshdesk account, you can try the log-in page athttp://bevmedia.freshhdesk.com. However, if you're not having any luck, please just e-mail us directly, and we'll send an account activation e-mail your way. All best, The Staff at Bevsites

Hello everyone!

For the past six months, we've been rather busy cracking away at a few new system features that are now available on the platform. Yet, while we've gotten some fun things accomplished, we realize that we haven't been very good at communicating their availability to stores. In an effort to overcome that, we're sending this e-mail (and others in the future) to announce these features.

Mobile-Optimized Design

When you view a given website on a smart phone, in some cases, if there's a mobile-optimized version available, you see a different layout and design that better fits your phone's screen so you don't have to pinch/zoom. Beverage Media has completed a mobile-optimized version of the platform to deliver this type of experience for mobile users. As there's some work and cost involved in setting this up, this service is available as an optional feature. If you're interested in this service, please contact us for more details. We can also provide you with some general analysis and advice on what percentage/amount of your website traffic is viewing your website on a mobile device, which may have some bearing on the value of this feature for your store.

Authorize.net Add-On: Securely Store Credit Card Information for Future Purchases

Authorize.net has an optional extension to their service called: "payment tokenization". This is more or less a fancy way of saying they can encrypt and store a person's credit card information securely so that it can be used for future purchases. Beverage Media has developed an integration point between this service and the checkout process on the eCommerce platform. For stores that use the Authorize.net gateway, this may serve as a very handy add-on. Contact us if you want to store customer credit cards online securely.

Constant Contact Mailing List Integration

While our platform has its own e-mail campaign tool, we know that many stores are also leveraging 3rd party e-mail campaign tools as well. In particular, we know that many stores use Constant Contact, as they have a large array of flexible templates and social media remarketing features. To make it easier for stores using Constant Contact to keep their mailing lists up-to-date, we've developed a point of integration between the My Account > Email Preferences section of the platform and Constant Contact account e-mail lists. The upshot is that as stores sign up for e-mails on the system or change their mailing list preferences, those changes go directly to the live Constant Contact mailing list. Please contact us if you're interesting in adding this integration point!

Also, if you're a store that is looking to redesign your website, you may be interested in knowing that we have recently added a lower-cost template design as an option for our system. You can see this template at thttp://demo.bevnetwork.com. This might be an interesting option if you have an older website design that feels dated but don't feel you can handle the expense of a full site redesign.

Without question smartphones have radically impacted how people access the internet. Despite the fact that these devices have been available for less than a decade, today, according to Nielsen, over 60% of Americans carry a smartphone. Consequently, mobile users have become increasingly important to retailers—including wine and spirits stores. To address the needs of mobile users there are two main projects that stores can look at taking on: building a mobile-optimized website and building a mobile application. Both of these projects, however, address different audiences and should offer separate features.

A mobile-optimized site is more or less an enhancement of your primary website. Most websites are designed to fit the width of a computer monitor. Consequently, when you try looking at a regular website in your mobile browser, it appears very small, and you have to adjust your view to read the content. An optimized site would be a different version designed to fit your mobile phone so you don't have to zoom in. This version of the site would always come up whenever a user visits from a mobile device. A mobile application, however, is a program that must be downloaded onto a device—usually through an “app store.” You can also click a link on a given website to download a mobile application. In either case, accessing the application requires the user to take an extra step of loading the software onto his phone's hard drive.

The key difference in both projects is the type of audience you're reaching out to. A mobile-optimized site is meant to give anyone and everyone that reaches your website an intuitive experience that mirrors the “main” website. In other words, they should be able to interact with the site and access the same information they would if they were on a desktop computer. The optimized site is meant to make the experience simpler and eliminate potential friction and frustration.

If you develop a mobile application the majority of people that arrive at your website or in your physical store will not be able to see it immediately. You will need to place a download link on your website as well as advertise the app to in-store customers. Even if you successfully get many people to download your application, you will also be challenged to keep these users engaged. According to a 2013 mobile app usage study by Compuware, on average, just 16% of users try a given app more than twice if it doesn't immediately hold their interest. Ultimately, this means you'll find that most of the people actively using your application will be primarily your most loyal customers—a much smaller audience than the users that would engage with a mobile-optimized site.

If you're going to develop a mobile application, you need to have something enticing for users that either enhances or goes beyond what you can offer with your website or in-store shopping experience. There won't be much to compel someone to launch your application if it just rehashes the same content that you have on your website. Consider some of the unique features of a smartphone and how they can be leveraged: push notifications, camera, QR code reader, geolocation, et al. How can you use these tools to create something worthwhile for your customers—either while they shop in your store or while they're elsewhere? If you're stumped by this question, know that you're not alone. Very few major wine retailers advertise a smartphone application, and success stories are hard to come by. Still, while it may not be abundantly clear or easy, if you can find a way create a quality, supplemental experience that relies on the particular technology of smartphones, you will likely find yourself with a successful application.

We are pleased to announce a promotion to all our stores pairing Wine Alert with Google Shopping. We normally charge $75 and $50/month for these services, respectively, but we are happy to offer you both services for $50/month (plus a one-time start-up fee for Google Shopping). This is a good way to drive quality traffic to your site and is something that we recommend for all stores on our platform. Wine Alert is a service by eRobertParker.com that matches your products with Wine Advocate reviews so we can populate this data on your site. Additionally, this service lists your store on eRobertParker.com as a place to buy the product a customer is searching for. Wine Alert also provides access to Wine Advocate shelf talkers to be used in in your brick and mortar store. Among the pay-per-click services, Google Shopping has been the most profitable for stores on our platform. Since Amazon went down last year, Google Shopping has continued to improve and adapt to the demands of advertisers. One advantage of Google Shopping over other pay-per-click services is the control we have over the ads themselves. We can geo-target states that you ship to, set a daily spending limit, adjust the pay-per-click bid on different product segments, and remove products that are not performing well. As we’ve written before, Wine Advocate has introduced a commercial license, which gives your store the right to display ratings and reviews on your website. To be eligible for the above program, you need to have a commercial license from eRobertParker.com. If you already have a commercial subscription, please enter it into the form on your Admin > Configurations page that says “eRobertParker.com username.” To get started on Google Shopping reach out to us and we can get you set up. If you have any questions on this promotion or want to discuss the particulars in greater detail, let Simon Lee know and he can set up a time for a phone conversation.

If you have a website, and you've either conducted research on how to market your store online or have spoken with someone on the subject, it's likely you've come across the term “search engine optimization” (SEO). In short, SEO refers to the various facets of your site that make it attractive to search engines, who, in turn, make it easier for users to find you through relevant searches. Optimizing this aspect of your website as much as possible can be a murky process. While there are some obvious rules, search engines don't publish all the particulars about how they determine what websites appear first in results, which makes it tempting to experiment and reveal some of the hidden details. Yet while testing and analyzing your site's SEO can be valuable in learning how to impact it positively, focusing too keenly on the day-to-day variances in search engine traffic can also be a dangerous rabbit hole that undermines how a business can think about its website. Ultimately though, despite the complexity of SEO, there's a simple philosophy that represents the driving force behind most of its facets: give users a good experience.

On the first page of Google's SEO guide it says, “You should base your optimization decisions first and foremost on what's best for the visitors of your site.” The rest of the guide covers a number of topics, but they devote the most pages to the subject of creating quality text and image content. In fact, the word “content” appears 144 times throughout the entire guide—more than double the number of instances of basic technical words like “tag” and “HTML”. For a potential online wine store, this content might take the form of information about where your business is located, specifics on the products you sell, and details on current promotions and events. When it comes to writing this content, use descriptive language that flows naturally and has your own voice. While SEO algorithms change frequently, they rarely ever punish a website that earnestly tries to provide visitors with well-written, useful information.

It's also worth noting that SEO isn't just about the content and structure of your website itself. Search engines also look to see how other websites interact with your online storefront. In other words, don't hesitate to promote your website through other channels such as wine directory sites that will list your inventory and pricing (e.g. Wine-Searcher), social media, and other potentially relevant sites. High volume pay-per-click (PPC) advertising services, such as Shopping.com, may also play a significant role. We took a close look at the traffic history of 15 of the retail websites on our network that have participated with these advertisers, and we've found a strong correlation between increased organic search traffic and PPC referral traffic. There's not enough conclusive evidence to suggest that running PPC services—with certainty--improves organic search traffic (there are too many additional variables to confirm it), but, the upshot is the promotional efforts you make outside your website have bearing on how search engines treat your website.

Ultimately, while there are dozens of elements that factor into search engines ability to show your website in search results, the crux of much of it is managing the online business quite naturally: providing useful content, advertising and promoting the business where it makes sense, and generally trying to give your website visitors a pleasant experience. While a more mature online business might take a closer look at refining the particulars of their SEO strategy, a young online business should focus their efforts on their general storefront and promotional efforts.

Selling wine online can be a challenging proposition, but the stores experiencing the most long-term success have found ways to access a steady stream of new clients while cultivating repeat business. As more licensed retailers enter the market, organic search traffic is becoming crowded and free directory listings on Wine-Searcher and Snooth are not as effective as they used to be. The big drivers of traffic can be unpredictable and a change to their alcohol policies can significantly impact your website. More so than ever, it is important for online retailers to find loyal customers and develop relationships that endure market uncertainty.

In order to expand their online reach to new customers, the most successful stores have spent money to generate internet traffic. Many have taken advantage of pay-per-click advertisements to highlight unique products and low prices; some have tapped into their local community by advertising on Yelp and Google Local; while others have purchased professional marketing services with varying success. It is important to remember that in the constantly shifting world of selling wine online, relying on a single advertising channel to generate traffic may be profitable short term, but it can quickly become a source of vulnerability. This year has seen Amazon pull the plug on listings for wine and spirit retailers, while last year Google Shopping had a ban on advertising all alcohol products. While there is no way to anticipate the next major industry change, diversifying your marketing mix is a good way to prepare.

In addition to finding new customers, stores should encourage repeat business by making use of targeted emails to customers. Emails can remind previous customers about your offers and provide an incentive for the next sale. To entice this second sale, stores will advertise programs such as wine clubs, case discounts and in-store events. Other stores email weekly newsletters made up of promotional offers, detailed information on highlighted products, and seasonally appropriate items. Still other stores have cultivated engaged customers by making use of a Facebook and Twitter following.

Developing a stable clientele requires an understanding of how clients are using your site. Tracking bounce rates and referral data in Google Analytics can illuminate shopping trends and the efficacy of email campaigns. For more subjective insights, customer satisfaction surveys can be conducted informally on the phone or included in your email footer. This valuable information can be used to better understand what methods work to encourage future sales and increase the chances for repeat business.

It is difficult to anticipate how selling wine online will continue to change, but there are plenty of advertising options available to stores looking to improve their business. In addition to ongoing efforts to drive new traffic, a store needs to work at maximizing the return from existing customers. In store and online they are the most directly accessible and have already expressed a willingness to purchase. Establishing and maintaining communication to encourage repeat customers allows retailers a chance to stand apart from their peers and develop a sustaining online business for many years to come.

It's come to our attention that in your Google Analytics accounts you'll see some new sections for "demographics" and "interests". If you click on these sections, which are intended to show more personal information about site users (e.g. age, gender, etc., you'll notice that the data doesn't populate. Google Analytics is looking for a different version of the tracking code. This new version of the code only relates to particular Google accounts. It is specifically designed for the implementation of remarketing Adwords campaigns. Remarketing Ads are an extension of Google Adwords. They're a paid feature that lets you reach people who have previously visited your site, and show them relevant ads across the web or when they search on Google. For more information on how this works, Google has some information here. The upshot is that if a store is actively using Google's remarketing ad service, the Analytics tracking code can be updated to also capture additional information on user gender, age, and so on. However, if a store is not actively using this service, there's no data to capture on these variables. To that end, no store should feel compelled to take on setting up this service just to collect this additional data. However, if you are using this service, don't hesitate to reach out so that we can properly update your Analytics tracking code.

Should unlicensed marketers profit from the sale of wine?

Advertising online is an important part of any serious online retailer’s marketing mix. The options for a store start with the major search engines, but search marketing can be an expensive choice as the competition for keywords is intense. Increasingly niche websites are opening up where entrepreneurs have developed an audience and will happily help a store sell them wine. So far so good, and clearly marketers can help find new audiences that traditional retailers haven’t been able to uncover online. The issue being debated in New York right now is whether those marketers can share in the profits from a sale without holding a license.

Last month the NY SLA held its second public meeting to discuss Internet Sales of Alcoholic Beverages. An issue central to this discussion has been whether Marketing Agents also called Third Party Providers (TPP) can collect a fee that is based on a percentage of the sale. Retailers have traditionally paid a PPC or flat listing fee, but transferring risk to the advertiser and only paying for confirmed sales is attractive for a retailer searching for a guaranteed return.

A recent change in policy by the California ABC signaled to TPPs that commissions on a sale were now permissible in that state. Back in2009 the CA ABC indicated that, “…if non-licensees share in the profits from the sale of alcoholic beverages, violations… may occur”. However in 2011 they signaled a change in policy by dropping this concern. In an updated advisory for wineries and TTPs they indicated a broader review of the relationship would be warranted to determine whether “any compensation structure utilized may not result in any actual or de facto control over the licensed business”.

The 2 years since the CA advisory have seen a flurry of activity as marketing agents have come up with new ways to sell wine online. We now have the Real Housewives selling wine, appsthat sell wine, Lot 18 and now Amazon selling wine through their websites as unlicensed entities. Indeed some marketers in California now believe that allowing marketers profit from the sale of wine is essential to the future of the industry. This is a future that includes more direct to consumer sales for wineries; sales which can bypass the control of state liquor authorities.

Meanwhile in NY, the board of the SLA has been reviewing the business models of Lot18 and Amazon in an effort to better understand how to advise the industry on TTPs and internet sales. Some of these models have clearly gone too far and the role of the licensed retailer (store or winery) as a passive beneficiary with no business risk is of concern to the SLA. On the other hand the SLA has permitted certain landlords to collect up to 10% of the sales from a store without being listed on the license. Amazon now collects 15% of the sales by wineries on its website, and argues that marketing agent commissions are only one channel in a licensee’s overall marketing mix.

The SLA is clearly concerned about the scale Amazon could bring to this business model. Commissioner Rosen asked “at what point does the unlicensed tail start wagging the licensed dog”? The SLA has no jurisdiction over unlicensed businesses and if Amazon is able to transform the market for wine as it did for books, the SLA could be limited in its ability to regulate the market in this state.

An advisory from the SLA is expected in the coming months that will define a number of issues concerning the sale of wine by marketing agents. The challenge they face is in balancing the opportunity for growth in this industry and broader selections for consumers, while not disrupting the livelihood of local licensees

It was more than 15 years ago that the first order was placed online at BevNetwork.com. That was back in the heady days of the dot com bubble and online ordering in the liquor industry was maybe a little ahead of its time. Back then it didn’t seem unusual that stores were being paid to place their orders online, needless to say that didn’t last long, nor did Beverage Media’s brush with venture capitalists. However, ordering on BevNetwork.com has since become a familiar feature of the trade in the Northeast as the millionth order was facilitated just last month.

Ordering online started slow but has been picking up in recent years. In the last 3 years there were almost half a million orders, and at the current rate of growth order number 2 million will be placed in only 3 more years, sometime in 2016. This year we expect almost $250 million in orders to go through the website by both stores (off-premise) and restaurants (on-premise). This will represent more than 150,000 orders, many of which are being delivered electronically to the respective wholesalers.

Use of the BevNetwork site is split pretty evenly between on-premise and off-premise licensees. However the ordering is less balanced, with off-premise stores placing twice as many orders online as restaurants. Online ordering favors the reordering of inventory that is already known, off-premise stores take advantage of filters and sorting features to find discounts that ensure they buy at the correct price. Restaurants that have a predefined wine list can easily reorder online, but if replacing a spot on a list requires tasting a sample, then a sales rep will probably take that order.

Sales reps are also now a part of this online activity as the Cellar on BevNetwork includes marketing tools that help sales reps engage their accounts online. Reps are also notified when orders are placed online so they can follow up if an order needs to be changed before the order board closes.

New markets will be coming online soon, but without the price posting laws of the Northeast that ensure everyone has access to the same discount levels it will be interesting to see how many markets adopt online ordering. A wholesaler in one of these new markets commented that he was jealous to see how easily orders are placed online in NY, NJ and CT. He thought the pricing structures in his market were too complicated for this to work, but was open-minded to the possibility that it could work for his company.

These days licensees don’t need a financial incentive to place an order online, the value of eCommerce has been well established not just for personal but also business applications.

Earlier today, our friends at Vin65, a subsidiary of Wine Direct and VinTank, two companies at the forefront of digital strategy and commerce in the wine industry, announced a partnership. The aim is to integrate their respective technologies to help wineries better understand the relationship between eCommerce transactions and social media activity.

Monitoring the value of social media marketing and its relationship with what transactions come through the shopping cart is a significant challenge for any industry. That said, this partnership sounds like it will provide the tools for wineries to do analysis and gain insights that before were murky at best.

We're very excited for Vin65 and VinTank (and the wineries), and we look forward to what general marketing insights this may yield!

The Full Release:

NAPA, CA and ABBOTSFORD, BC-- Vin65, a subsidiary of WineDirect, and VinTank, two of the wine industry's leading innovators, have formed an exclusive partnership which connects wine industry social media data directly to customer ecommerce records. Through this partnership, the two companies have created a bi-directional integration which merges social interactions (or social customers) with the records of commerce customers. This means that Social Media managers can now understand the lifetime value of the people they're interacting with, and ecommerce managers will have access to a 360 degree view of their customers including all social posts of your brand.

While CRM tools provide wineries with the means for collecting and managing traditional customer ecommerce data, the ability to supplement with social data provides a strategy for customer engagement where increased sales and lifetime values are a by-product. According to Bain and Company, customers who engage with companies over social media spend 20% to 40% more money with those companies than other customers.

The two companies place a heavy focus on helping wineries sell more wine Direct-to-Consumer. With Vin65, that commitment takes the form of a market leading ecommerce platform. With VinTank, it's via a cutting edge social media management solution for wineries. By merging crucial data from the two companies, wineries will enjoy a competitive edge, not only in revenue generation but also in managing important customer relationships.

Features and Benefits for Wineries

In VinTank

When monitoring a social media conversation of a customer, you will understand that customer's commerce value with a view into statistics such as customer lifetime value, last order date, club memberships, and ecommerce segments. Wineries can drill down to this important information without ever leaving VinTank’s platform.When viewing a particular Vin65 customer segment from within the VinTank admin panel (club members for example), you will see all relevant social interactions for that segment.VinTank offers the ability to build Twitter Lists of club members or any other Vin65 Contact Types.

In Vin65

The Vin65 Platform shows the most recent social media interactions for your winery in conjunction with sales and other ecommerce information.In the CRM tool, wineries can view a customer’s social interactions from Twitter, Instagram, Facebook, and Foursquare in one easy-to-view feed.Vin65 offers the ability to create actionable lists to segment customers in both social and ecommerce segments.

Andrew Kamphuis, President of Vin65, had this to say: "I’ve known Paul at VinTank for a long time and we are very excited about this partnership. The ability for our customers to relate social comments to ecommerce transactions is a step forward for monitoring the ROI of social.“

“When I look at what the future of commerce will be for the wine industry, I see Vin65 leading the way through their culture of helping wineries focus on their customers. By coupling social media to their customer interactions we can enhance that vision like never before seen in any industry,” added Paul Mabray, CEO of VinTank.

The integration is available immediately in beta to Vin65 or WineDirect customers who request it. It will be widely available for all Vin65 and WineDirect customers on July 31^st. More importantly, it is being made available at no cost. Vin65 has paid a licensing fee for the professional version of VinTank for every winery on its platform (a value of $1,800 per year).

In his classic text on the history of California wine, Leon Adams described the cycles of boom and bust that characterized the early days of that state’s budding wine industry. Sometimes it feels like he might as well have been discussing the options for selling wine online for retail stores. Recent changes in the available marketing options for wine stores have some wondering if recent years were part a boom cycle that is coming to an end.

Last summer Google pulled the plug on free traffic from their shopping feed service and converted it to a paid service now called Google Shopping. The larger problem was that alcohol ads were banned while Google worked on rolling out their new program. In April this year the advertising ban was lifted, but not completely. Wine stores must identify their selections as “non-family-safe which severely limits the available traffic. So far Google Shopping has not produced the expected results, however it is likely they will continue to tinker with and improve their policy towards wine.

The impact of Google’s alcohol ban was lessened by the success of a powerful new advertising option from Amazon. While it was not free, Amazon traffic had a high conversion rate and stores found it a profitable replacement. Then in early June this year, Amazon canceled its Product Ads program on wine, beer and spirits. Now wine on Amazon’s website is only sold on behalf of wineries using a marketing agent business model that, while popular in California, has been heavily scrutinized by the NY State Liquor Authority. Fees for the “Selling on Amazon” program can run a winery as much as 35% of their margin, a price structure that doesn't work for retail stores.

With Amazon out of the picture and Google’s feed traffic still “missing in action” retailers are casting about for new sources of referral traffic. A review of affected websites on the Bevsites eCommerce platform shows the value of building your web business around a broad base of traffic sources. The impact of losing this business from Amazon ranges from a drop of only 2% of sales to a high of 78% of sales. With all their eggs in one basket the stores at the upper end of this range have experienced a bust and need to work on replacing the traffic from Amazon.

It is worth noting that while Amazon delivered a healthy conversion rate on its traffic, stores found it challenging to build repeat business from these customers; their loyalty really remained with Amazon. As always stores need to follow up on any advertising with email marketing that reaches for that second sale. Without those repeat sales the average lifetime value of an Amazon customer is less interesting than a new customer that might cost more to acquire but is a candidate for additional business.

There are other sources of traffic for stores that like to use shopping feeds, they may not be as sexy as Amazon but they represent the slow and steady growth of a business around customers you can keep. Building a diverse portfolio of marketing options will protect your store from the recurring boom and bust cycle of marketing wine online.

Today few people raise an eyebrow at the thought of selling or purchasing wine online. Some of the largest online retailers' websites have served consumers for over a decade and a half. A quick scan at Wine-Searcher.com also reveals there are now over 12,000 outlets in the United States showcasing their products online. The increasing saturation of wine stores online may be worrisome to some retailers. With more competitors nationwide, consumers outside of your market have a better opportunity to find the same products more cheaply and conveniently elsewhere. However, stores should remember that their long-term success online--and in their store--greatly relies on the ability to acquire repeat customers. And while it may be increasingly difficult to attract loyal customers outside of your market, your local market is still ripe with opportunity.

A recent study conducted by Adobe in Q2 2012 titled, The ROI From Marketing to Existing Online Customers found that the likelihood of a returning website purchaser (i.e. a person who has placed one order previously) is over five times more likely to complete a transaction on a website than someone who has arrived for the first time. For repeat purchasers (i.e. those who have placed multiple orders in the past), they are over nine times as likely. Without question, the value of repeat shoppers show the importance of having them as a foundation of your business. The questions that loom though are how can stores build customer loyalty online--and where?

In a review of returning visitors on 20 established retail websites on our network, from the New York Metro and New Jersey markets, the data (taken from January to April 2013) showed that of all local traffic, 39.8% were repeat visitors while of all non-local traffic only 17.5% (less than half) were repeat visitors. What’s also striking is at the same time, though almost 40% of the local visitors are repeat customers, over 60% are first-timers. In other words, though stores do a much better job at converting customers in their market to be repeat purchasers, more than half of the people looking at the site are engaging with it for the very first time. This segment is where the greatest opportunity lies to grow and develop the foundation of your online business.

However, while a store’s local market contains the most reliable source of repeat business, it’s often not a large part of a store’s advertising strategy. Instead many online businesses attempt to maximize sales through high-volume, paid referral sites, where nearly all visitors to the site are new, and the opportunity to inspire repeat business is slimmer. This strategy has merits (SEO benefits, sales, e-mail list growth), but stores should be wary of singularly relying on them. For such a store, if one of these referring site makes an unfavorable policy change (such as removing all wine and spirits from its site), the results can be catastrophic. Retailers who remember when Google Products removed wine and spirits from their listings in June 2012 can attest to this.

Stores should keep these details in mind as they strategize the growth of their online business. Think: how can I change the shopping experience on my site to make it more appealing to my local market? Review your policies on local delivery on in-state shipping and consider offering flat-rate or free shipping/delivery opportunities. When it comes to spending advertising dollars, also look into marketing options that allow you to target a local audience, such as Google Adwords. And perhaps most importantly, when you see an order from a local customer whose name you don’t recognize, make the order fulfillment process as personal and pleasant as possible. These customers represent the best opportunity to grow the foundation of your business.

As we all know, email scams are prevalent. If you receive an email about your domain(s), and you have any doubts about it, please contact us and we will review it for you.

I recently received an email that looked official. I initially thought that I needed to make a payment or I would lose my domain:

copy of email solicitation

I was cautious and read it carefully. Looking at the fine print, it stated it was a solicitation for an SEO submission service. This is something I don't need, and I would never trust an agency that just tried to trick me!

Things to look for that may indicate a scam/solicitation:

A logo or company name - this looked too generic. There isn't a company name/logo anywhere.Spelling/grammar mistakes - tell-tale sign someone who doesn't know English used a translator to convert from their language to English and could be from oversees. (Remember the Nigerian scam from years ago?)Contact information - if it's not in the header or footer of the email, they are in violation of the CAN-SPAM Act and a good sign it isn't legitRead the fine print - Look for "This is not a Bill" or "solicitation". Words and phrases that cast doubt it's a real invoice.

Some scams might just try to have you send money and use the domain name(s) as the reason for this. There are others that will take your domain from your current Registrar and transfer it to another Registrar. We, and BMG, take this seriously. For all the domains that you have entrusted us to monitor, you will notice a couple things:

You are still the owner of your domain. We will never be the registrant owner.We will put one of our email addresses (usually "willip@zinergy.net") as the email for all the contacts so that when we get these scam emails, we can weed them out. We also get any important emails about status notifications so we can check on why we received them.We will put Zinergy Internet Services and it's contact information as the Administrative, Technical and Billing Contact. This will come to our office. We do this so you don't have to pay for Domain Privacy and so we can monitor the domain(s). It's an extra layer of security.

If you currently do not have us monitoring your domain(s), and would like us to do so, please contact the Cambridge office. If you would still rather monitor the domain(s) yourself, lookout for these types of scams.

It wasn't so long ago that wine stores could afford to be complacent about their websites. Online traffic would likely find them from a product search on a search engine or wine directory site, competition wasn't too bad and Google Product listings were free. It was tempting for retailers to treat online orders as less important than “real” customers who walked in the store. But times have changed, competition has become more intense online, and every new customer comes with a premium.

The biggest change came last summer when Google announced that their product listing service would no longer be free. To add insult to injury they banned alcohol advertising on the new platform, a ban that has only recently been lifted. Fortunately Amazon had just launched its own product ads service for wine stores the previous year. As Google Products went dark, Amazon quickly became the new source of reliable traffic and conversion rates turned out to be remarkably good.

Advertising on Comparison Shopping Engines (CSEs) where stores can buy traffic based on product searches, used to be an activity reserved for more ambitious sites. The field of CSEs mainly consists of shopping sites that use arbitrage to convert their search engine ads into referral fees from retailers who want to buy that traffic. Margins are thin and ROI depends on being able to focus referrals on products that convert well. What’s different about Amazon and Google from the other CSEs is that their traffic is homegrown, a byproduct of their other activities. In general, it looks like consumer trust in their brand is leading to better conversion rates and ROI.

Amazon is a latecomer to wine sales; it didn't sell or advertise any alcohol until September 2011. More recently they have been selling wine from US wineries as a marketing agent; a business model that has been getting a lot of scrutiny from the New York SLA. Perhaps given this regulatory attention Amazon has started monitoring retailer listings for offensive products and aggressive shipping policies. Stores have been suspended for carrying products containing the name “moonshine”, infused whipped cream, and tequila in gun shaped bottles. With their feed monitoring in a state of flux it can be frustrating for retailers who find themselves suspended without a clear explanation.

Since the beginning of March, Google has been showing wine ads on Google Shopping for the first time since last summer. At the time of writing Google is trying to overcome a technical problem where “not-family-safe” products are unable to be displayed as the default search option. Hopefully this will be resolved soon as the retailers we work with have been chomping at the bit to list their products on Google’s feed. At the moment the few stores listed on Google Shopping are taking advantage of very low advertising rates, on average around 10¢ per click; this compares with Amazon at 25-29¢ CPC. As more stores start to compete on Google Shopping we do expect to see bid rates grow and become more targeted as stores figure out bidding strategies for higher margin and higher priced items.

While Amazon’s CPC rates are more expensive, their site has been producing conversion rates as high as 4%, which quickly compensates for the CPC rate. This leads to a per visit value from Amazon referrals at around $4 compared to $1 for Google Shopping; both indicate a good ROI against the CPC rate. The other part of this story is that both sites can channel thousands of visits per month towards your website.

Some stores may not be comfortable with the idea of paying for new visitors online, but this is the new reality for retailer eCommerce. By now, most stores have come to appreciate that online customers are just as real as store customers, and in many cases are the same customer. Given the alternative of dwindling visitors and sales, stores can no longer afford to be complacent. The first step is to list your inventory with both of these giants.

We have been having a problem with Amazon regarding the following products:

· Tequila in gun shaped bottles, including: Old Carbine, AK-T, Caliber, Hijos · Any product with “moonshine” in the title · Any product with “whipped” or “whipped cream” in the title

Amazon has suspended a number of accounts for including these products. Even when the products have been removed from the feed, Amazon has still not lifted the suspensions.

In order to prevent this from happening to your account, we strongly suggest disabling all of these products from your site immediately. Do not forget to remove virtual SKUs as well. If you need any assistance with this, or if you have any additional questions, please let us know.

Considering this new enforcement policy, as well as moves Amazon has been making at the state level regarding third-party marketers, this may be part of a larger shift that Amazon is making in how it sells and markets alcohol.

The State Liquor Authority of NY is preparing a new set of guidelines that could have national implications for how wine is sold online. While the jurisdiction of the SLA is limited to licensed wholesalers, retailers and restaurants, the issue at hand is how unlicensed marketing agents can promote wine. As a price-posting state NY has strict laws about 3-tier compliance, and given the size of the NY wine market most marketers will build their business models with these rules in mind. At a special meeting in January Chairman Dennis Rosen of the SLA clearly felt it was time for an open discussion with the industry, so they could discuss their concerns in anticipation of a new protocol.

There are several marketing agents that actively promote wine to consumers including The New York Timesand Wall Street Journal wine clubs, the flash sale site Lot 18, and most recently Amazon which sells wine from US wineries on its website. Until a little over a year ago marketing agents operated in an uncertain space, but an advisory from the California ABC in November 2011 changed this. The Golden State clearly saw that its wine industry would benefit from having more marketers promoting their products and opened the door for marketers to be more direct in their pursuit of consumers. For the first time it was clear that credit cards payments could be collected by the unlicensed agent, even though control of the disbursement of funds must stay under the control of a retail license. This was significant in that it gave marketers a green light to put a shopping cart on their website and collect payment directly from consumers.

A special SLA meeting was convened in January in response to a request from ShipComplaint who were seeking validation of their marketplace platform. It turned out the SLA had been conducting its own investigations into the activities of ShipCompliant’s licensed business partners and was using this opportunity to address the wider issue of unlicensed agents participating in and being compensated for the sale of alcohol. Two of those business partners, marketer Lot 18 and the wholesaler MHW faced some tough questions about contract language that specified compensation for the retailer and wholesaler, and the price posting of duplicate items. The resulting discussion identified some principals the SLA considers important, and Rosen made the point that the model itself may be sound, but it depends on how the business partners are using it. Was ShipCompliant driving a taxi or a getaway car?

Among Rosen’s concerns were that the retailer needs to exercise control over the transaction, and be exposed to risk. The wholesaler cannot avoid duplicating the brand registrations of other wholesalers in the state by “stickering” products so they become eligible for a new label approval code (COLA) and a separate registration. It was pointed out that the retailer may be able to purchase the same product from a different wholesaler at a different price.

After what was quite a dramatic hearing the publication of the SLA’s guidelines are eagerly anticipated. Amazon announced in January the construction of a1 million square foot warehouseand fulfillment facility in NJ and had legal representation at the hearing. As a marketing agent Amazon could present a big opportunity for US wineries or a competitive threat for local retailers. Either way the SLA was clear that it does not intend to stand in the way of internet sales.

As Beverage Media’s online view of the New York drinks market grows more complete it has attracted the attention of trade members in other parts of the country. The initial reaction is very positive with excitement about the product browsing and eCommerce. However as the discussion shifts to the prospect of something similar happening in their home market a common reaction is; “why would you want to show all the products in our market?”

It may be that the conditions in New York City are uniquely suited to encourage a more open view of the marketplace, but I hope not. To be sure the wine scene in the city is vibrant and diverse. Some of the most storied wine and spirits merchants in the country service the city’s consumers, and they dine in some of the best restaurants in the country. The city is home to a unique collection of importers, writers and sommeliers that have helped shape the national conversation about wine, but that conversation has been happening throughout the country.

Our taste for new wine styles has followed behind restaurants trends that introduced us to regional and exotic cuisines. It wasn’t so long ago that sushi and chicken tikka masala were considered adventurous, now we expect them to be available in the prepared foods section of the supermarket. In the past twenty five years restaurant wine lists have progressed from being dominated by French, then Californian and Italian wines, to now including wine from all corners of the world. To be sure some consumers are less comfortable experimenting with unfamiliar wines, but there is a growing audience for Assyrtiko and biodynamic Savagnin.

Attitudes in the trade have adapted to this shift in the market. While the abundance of new wineries on the West Coast reacted to limited access to distribution by pushing direct to consumer sales, word from the wineries is that access to a distributor is becoming easier to find. According to Abe Schoener, who describes his Scholium Project as an off-beat and peripheral winery, there is interest at the distributor level in most markets that is enough to support his product at a few select accounts.

While every distributor wants to win your business over their competitor, it is the largest distributors with exhaustive portfolios and armies of sales reps who are most concerned that a competitor’s sale is a lost opportunity. Why would they want to share the stage with the smaller distributors? The answer is because their customer, the wine buyer, wants to be able to find any product that’s available in that market. Making it harder for them to search available products only means they have to reach out to the smaller distributor more often. In some cases this causes a backlash against the big distributors in favor of the underdog.

This challenge is not unique to our industry. Most towns have an auto strip where competing car dealers sit next to each other; it saves consumers from traveling across town to see more cars. Indeed there is academic research that demonstrates when competing companies are located together they all increase their chances of getting a sale. Malls are popular because consumers can go to a number of stores in a single visit; they comparison shop and can check out a number of similar or even identical products.

The wine market has changed in the past 25 years. You will rarely see the old fashioned wine list that was printed by the distributor in exchange for an exclusive on the selections. What makes a restaurant stand out now includes their enthusiasm about wine that matches their food. Retailers can’t all sell the same household brands and expect to compete on price. It is the most prestigious restaurants and retailers that are turning over every rock to find the most interesting selections and best value. Those wines won’t always be found at the largest houses, and yet that doesn’t mean buyers will turn their backs on the big players.

Ultimately it is the buyer who decides whether a product fits their beverage program and the fortunes of distributors are determined by their selection and pricing. Sales reps still play an important role in a distributor’s ability to place product, but if the buyer wants to be able to view products from all vendors in one location, then it makes sense to support this. The New York trade has adopted this approach and distributors in other parts of the country are starting to confront this shift the market. A more vibrant wine scene across the country can only help the industry overall.

A report from the Pew Internet Project last year confirmed that email is still the top online activity and is nearly universal among adult users. It is still the most reliable channel for reaching customers and offers an unmatched rate of delivery. However, Julie Katz at Forrester Research cautions about the potential for abuse when email is used to ”deliver fast relief to marketers looking for short-term boosts.” As we move into the holiday season it can be tempting to over-exploit your email list for sales. However, sending too many emails will jeopardize valuable relationships with your best customers.

Many of the largest wine retailers now send daily emails, and while some offer profile settings with less frequent options, it has become acceptable to send more emails than most customers can bear. Stores will justify sending too many emails because their competition does it, or just because they can. After receiving too many emails though, your customers will start to ignore them, your aggressive email campaign instead backfiring.

Marketers have always known the cost of acquiring new customers is higher than retaining existing ones; Bain & Co. estimates that you spend six to seven times more in acquiring a new customer than retaining the ones you have. This important insight has been largely overlooked by more aggressive emailers. According to Katz, retailers need to change their mindset from one emphasizing quick-hit returns to one striving to forge long-term bonds. One way to do this is to focus on metrics illustrating long-term benefits. By paying attention to open and click-through rates, it has been easy to lose sight of the long-term value of a customer list.

Churn Rate: You should be tracking new email subscriptions along with subscriber defections and un-subscribes. At the very least, new subscribers need to keep up with un-subscribes and hard bounces so your list doesn’t shrink. However, you should also take into account inactive subscribers who have disengaged and rarely open your emails anymore.

Inactive Subscribers: If you email your customers several times a week then you should assume that a customer becomes inactive after three to six months without opening an email. There is no value in continuing to mail inactive subscribers at such a frequent rate; however you should target them for a reactivation. Once an address has been inactive for between twelve to eighteen months it is better to throw it away. Unfortunately, consumers are largely unaware of the repercussions from reporting legitimate email as spam, so to avoid having spam complaints, it is better to remove inactive subscribers.

Compare Revenue from New Subscribers with Existing Customers: These rates combined with the churn rate will give you firsthand experience of why you need to work to retain existing customers rather than chase new customers. According to Mark Klein of Loyalty Builders LLC, the relative total revenue from existing customers is typically ten times greater than newly acquired customers.

Email Value: For example, let’s say you have 5,000 emails in your list, an open rate of ten percent, an average revenue per email of $500 and you send 120 emails per year. Using these assumptions you can create a simple calculation of potential annual revenue of $60k, with the average revenue per address at twelve dollars, but average revenue per active address at $120. By recalculating the value of your active addresses each week, you will see how your campaigns are impacting the lifetime value of your customer list. This makes it easier to change the focus of your campaigns to build value.

To improve the profitability of your email campaigns, try shifting your email tactics from short-term goals to managing the long-term value of your customers. This will reduce your list churn and sustain your most profitable customers.

This update is past overdue, and many of you are already aware of the staff changes in the Cambridge, MA office. But in case you haven't heard, Samantha Robertson and Amanda Leonard, the primary point people for the development of new websites and support of existing sites, both left the Beverage Media team around late August/early September. In their place, James Laurenti has returned to the team (and returned to Boston), and we've added two other wine retailer veterans: Andrew Hammond and Eric Lawrence Brown. These three have now taken over all of Samantha and Amanda's projects, and are also the main points of contact for the live sites on our network. You can reach this them at the Cambridge, MA office: 617-864-1677. For those who don't know James already, he worked in the BMG Cambridge office from 2006 to 2011 and used to be the primary point of contact for many our stores during this period of time. Prior to working at Beverage Media, James worked at a large retailer in the Boston area and also at his family's wine store in Central New Jersey. He also takes NHL hockey way too seriously and is a shell of his former self thanks to the current lockout. Andrew also comes to us from a wine retailer just outside the Boston area. On the side, he maintains a blog called AllGoodBottles.com, that showcases his design, photography, video editing, and music mixing skills as well as his love for Italian wine. And if you look at the videos there, you can catch glimpse of his Puggle too. Eric comes to us from sunny Los Angeles, where he worked in sales for a very large online marketer of wine. Prior to this, Eric also worked for a major retailer on the West Coast. He's an avid fan of French wine, and he's probably the only person in the office whose pronunciation of French wine names doesn't make Ian Griffith cringe.

Though the transition period has been a challenging and chaotic one (even without the hurricane and hectic holiday season), we are excited to move into 2013 with our most retail-experienced project management and support team to date.

As of this point websites on our eCommerce platform have been operating without interuption throughout the length of this storm. Power has been lost at both our NYC and NJ offices and it may be days before it can be restored. Our Internet host has been operating on generator backup for over 24 hours and has secured a reliable supply of diesel fuel for the next 72 hours. In the meantime they continue to work with technicians from PS&G to restore electricity supply to that facility. I presume additional fuel can be purchased if the generator needs to be used over the weekend. Data services in and out of the building appear to be strong and are running at full capacity. With our Main Street office in Hackensack out of action some services have been affected mainly for sites in development or with data-only services. We still plan to move this office to the same building where our websites are hosted (although too late to benefit from their backup power this time). The email campaign mail server which uses an Optimum online data line has been offline because of a failure with that service. Our staff in NY and NJ are working from home but are mostly without power and Internet making it difficult to reach them. As far as we know everyone is safe. The latest news is that our NYC office just had its power restored although without public transport there will be a small staff working from that location this week.

An evolutionary leap has been taking place in New York with how retailers and restaurants access pricing information from their distributors. While Beverage Media has had an online version of the book for over 10 years, changes in the dynamics of this market have created an opportunity to expand the role of our online listings. We have opened online access to a full view of the marketplace. Products from all distributors, including those not published in the printed book, can now be included online creating a powerful resource of the trade.

For 75 years Beverage Media has been a key advocate for the drinks trade in New York. It all started with a couple of lawyers, the Slone brothers, who put together a magazine to help readers with liquor licensing issues in the years after prohibition. Over the years this magazine grew to include hundreds of pages of distributor pricing becoming an important reference for stores and restaurants. Some of you will remember the heady days of the dot-com bubble, when Beverage Media was purchased by BevAccess and merged with our technical partner EDC. With ambitious plans and venture funding to grow a national “Industry Exchange”, the dot-commers eventually fired themselves and left behind a bit of a mess. However, our online ordering platform dates from those days and has operated as an administrative convenience for placing orders with distributors.

To help with navigating a complete view of the marketplace we added search tools that enhance the shopping experience. In addition to fulfilling the administrative function of allowing buyers to find items for reorder, the site now helps you browse products by category with a series of cascading filters that show a custom view of products that meet your criteria. Select French Wine and drill down through the regional hierarchy to find all Puligny Montrachet, filter by Vintage and Price Range to find the wines you need to fit a spot on your wine list. This selection can also be saved and returned to next month, so that a personalized link will reveal whether new items are available or prices have changed.

The emphasis of the revised search features is to provide a powerful user experience so that you have more tools to find and compare products. Search facets in the left navigation narrow to present more targeted options as you navigate through the catalog. These facets either provide a hierarchy of options like regional tiers, or the show multiple selections so you can, for example, compare multiple grape varieties side by side. The options within a facet can sort to show an alphabetical listing, or a listing of options with the most results. The page then refreshes automatically using AJAX calls without waiting for the page to rebuild.

The main results page no longer shows all the pricing levels available on an item. Only one discount level is visible on this list page, but a link shows when more “more deals” are available. Those deals are laid out on the detail page which has been redesigned to give buyers more tools to make decisions. The discount levels are given more space with dollar and percentage discounts displayed prominently. There are plans to display a buyer’s purchase history so the last purchase date and previous price paid can be taken into account. Adding items to the shopping cart can be completed from both search result or detail pages, and many distributors will receive your order electronically, directly into their order board.

Given Beverage Media’s prominent role in the industry, it has always been central to our missions that we protect our neutrality in the midst of the three tiers. We certainly do business with all three tiers and some customers are larger than others, but our success has always been based on making decisions with the benefit of the whole industry in mind. This mission is now evolving to a new level that places exciting tools in the hands of buyer with a more complete view of the marketplace online

In preparing for today's webinar, we came across this fantastic infographic regarding search engine optimization (SEO). It's worth noting that this chart is about one year old and that Google et al. are constantly updating their search ranking algorithm. However, this graph does an excellent job at showing the vast variety of factors in play. Kudos to the guys at SearchEngineLand.com and their partners below!