The Copper Peak Logistics team is comprised of eCommerce and logistics industry veterans who are just as dedicated to your product as you are. Strategic warehouse locations allow us to cost-effectively deliver your hard work to 98% of the doorsteps in America in under two days.
For more information, visit us at http://www.copperpeaklogistics.com-- and don’t forget to check out our industry blog with wine industry and logistics news, tips, and expert insights.
We pick materials, package them correctly, and ship them by your preferred methods. These activities are coordinated with precision and completed using multiple quality controls to ensure accuracy and timeliness of every shipment.
What makes Copper Peak unique is that we are well versed in all types of order profiles – single lines, multiple lines, full cases, and full pallets – and can help companies manage both their B2C and B2B logistics models.
We are known for:
Pick, Pack, and Ship Services
Temperature controlled shipping and forward staging
Single Lines or Multiple Lines
Multiple Quality Controls
Our Proprietary Supply Chain Software Platform
Marketing and Sales Collateral with Analytics
Marketing Agent Programs
Kitting and Special Projects
Custom Branding Support
In the past we’ve written about subscription service models, comparing them with the “fruit of the month” clubs of past decades. While the idea of regularly sending items to club subscribers is certainly not new, today’s subscription models have grown and diversified in many exciting ways. Wineries considering a wine club subscription service will want to think through the different types and ensure that they are getting the right fulfillment services in place to maximize success.
There are literally hundreds of subscription services serving consumers today. Popular ones, such as Birchbox, Blue Apron, Dollar Shave Club, Graze, Winc, and others have received considerable attention from consumers, bloggers, and the business community at large.
While all these services vary in their details, the business model behind them all is the same: Subscribers to a “box” club pay a monthly fee to receive a package of products compiled by the company and sent straight to their doors. The company gets predictable cash flow by charging a subscription fee, and the consumer can have the experience of trying new products (or cherished familiar products) without the need to spend time shopping.
On top of this basic model, there are different variations on the subscription club idea:
With a “curated” subscription box, subscribers receive items chosen by the company, with little to no input of their own. This allows the experts at the company to carefully select a variety of items and expose customers to products they might not try on their own—hence the curation concept.
The opposite of this would be the “customized” model, where subscribers have input into the contents of their boxes. This is usually controlled by a profile containing their answers to key questions asked during the signup process. For example, a customized service might ask about wine preferences (red or white, dry or sweet, etc.) and then select bottles accordingly.
Many companies, especially those that do curated boxes, ship on a shared drop date. Their customers all get their boxes at roughly the same time—a crucial detail when social media sharing and anticipation building are a huge part of the brand experience.
Other companies deliver boxes at regular intervals starting from the date of sign-up/purchase. This means that boxes are continually being shipped out, depending on when during the month the subscriber joined. This makes more sense for customized boxes but works with curated boxes as well.
How long the subscription lasts can vary as well. With a fixed subscription, a customer pays for a period of one, three, or six months (although other time periods are possible). This is a good option for letting customers try the service without worrying about cancellation if they do not like it. Fixed subscriptions also give you the option of offering a discount if the entire subscription is paid up-front.
The other option is a rolling subscription. With a rolling subscription, a box is sent every month for the same fee until the subscriber cancels (or subscription plans change). This is an easier option that can often keep consumers on the books longer.
Most box services charge a flat fee for their delivery (although some services offer different tiers of products). Still, a different model is becoming popular for clothing and fashion: Consumers receive a box of items, get to try on the various articles, and see what works for them. They can then keep what they like and return what they don’t. Subscribers are then charged only for the items they keep.
Some services are also experimenting with a “hybrid” approach, where a monthly curation ”stylist” fee is charged every month but put toward the price of any items kept. While this would not work for wine per se, it does suggest other ideas—for example, charging a flat fee but then offering a discount on wines that are re-ordered.
To create a successful subscription service, you need to make some choices as to the above. For example, suppose you want to create (or modify) a wine club. Do you send out a carefully curated collection of your wines? Or do you allow consumers to take a quiz? Do you send out the wines at the same time every month, or on the anniversary of a subscriber’s join date?
After you’ve made these choices, you will want to talk to some 3PLs to get an idea of what services are needed to fulfill your particular model. This is important, as subscription services are a different beast from typical eCommerce: Instead of shipping one-off orders as they’re received, you will need the capability to send thousands of similar orders, perhaps more, all within a tight timeframe.
To do this, you will likely need outside help from a 3PL. Specifically, your particular business model may require:
In short, subscription box services are much more than simply throwing a few items in a box. There are a number of small details that have to be managed, from customization and curation to packing and presentation. (Our expert panel white paper on the topic covers many of these.)
Copper Peak can help you figure out these details and scale your operation to meet demand; we specialize in craftsmanship fulfillment for the wine industry and have much experience with subscription services and wine clubs. Contact us to get a discussion going.
Remember, 13% of all subscription services fail within a year. You can’t afford to get the details wrong. But get it right, and your subscription service might be the next Birchbox, Blue Apron, or Dollar Shave Club. The DSC story, in particular, had a happy ending, and yours can as well.
In 2015, we published some materials that predicted, in part, that Millennials were a growing segment in the wine market—and that with their entry into the market would come a change in consumer behavior toward brands and the wine experience.
After listening to the Silicon Valley Bank 2017 Wine Report (SVB report for short), I was relieved to hear that we were, by and large, right…. But who’s gloating?
The ways in which Millennials are changing the market are sometimes subtle, so it is easy to miss some of the trends. It might be worthwhile, then, highlighting what is happening…and what forward-thinking wineries are doing about this demographic shift.
Looking across generations, Baby Boomers are still the largest segment of U.S. wine consumers, making up 41% of the total market. But their share is declining: Just four years ago, they were 44% of the market. By contrast, both the Millennials and Gen-Xers grew in terms of share of the DTC market. We predicted that their market share would grow over the years and see no reason why this trend would reverse in 2017.
At the 2015 Direct to Consumer, Wine Symposium, we hosted a user group panel on the very subject of Millennials in the market and followed that up with our whitepaper. “Socially, Mobile, Millennials: Farming for the Future User Group.” There we quoted Susan DeMatei, owner of WineGlass Marketing, on brand loyalty across generations:
“We observed that while Baby Boomers would stay attached to a brand once they were familiar with them; [they were] high loyalty (I’m a ‘Chevy’ guy, I’m a ‘GMC’ guy, etc). On the other hand, Millennials have grown up with technology, cable TV, etc. They were born with more choices in everything. ‘They have A.D.D.’ so they are always on the hunt for the next ‘thing’, always.”
These claims were borne out in the SVB report, which noted that “Per capita consumption faces crosscurrents, with retiring wine-loyal baby boomers being replaced by less affluent millennials who seem to be ambivalent about their alcoholic beverage of choice.” This seems to match what we’ve heard elsewhere in the industry, too.
The SVB report also noted that restaurant consumption of wine was down in 2016. While there are many factors contributing to this, Millennial behavior is part of the story. To quote the SVB report:
“Our frugal millennial consumers don’t want to pay restaurant wine markups. They know they can buy a bottle of wine at the store for less, so in the restaurant, they are more likely to satisfy their consumption needs by starting with a beer or cocktail and having a glass of wine with dinner. More baby boomers are retiring and living on fixed incomes, and that influences their restaurant beverage choices, as well.”
Another sign of the impact from Millennials: Red varietals and blends above $25 were the only growth category for restaurant channels, growing at 1%. These tend to be favored by Millennials, so this growth might be a further indication of Millennials’ rising market power.
Another aspect of Millennials that we picked up on was that they experiment. “Millennials are willing to try new things (growlers, wines on tap, etc.). Think of different and new ways of doing things,” says DeMatei.
It appears that Millennials are also demonstrating a willingness to substitute (Craft beer and spirits for wine, for example). They are price conscious and quality conscious more than brand loyal or product loyal.
Remarking on Millennials’ entry into the wine market, the SVB report notes that “millennials are no different [from Baby Boomer or gen-Xers], but they have the added advantage in their formative years of the digital age, which allows them wider selection, better pricing information and greater ease of purchase.” In other words, they are both accustomed to choices and expect good deals. No wonder they experiment.
But this isn’t indicative of an “I’ll try anything” attitude. Patrick Sullivan, a DTC general management executive, told us in 2015 that “Millennials are ‘fantastic testers’ and they will find all flaws in the entire chain (from e-com to receiving of product), so be prepared to address their concerns.” Their experimenting really is testing to see how they can get the best experience for the best price. And as the SVB report notes, “Perfect digital price information in the hands of a thrifty consumer is a nightmare for marketers.”
The Millennials’ influence on the marketing is small but growing. Baby Boomers still dominate, and so go-to-market tactics still have to work for them. Smart wineries, however, are making changes in anticipation of the growing Millennial market.
What kinds of changes? Here are a few we’re seeing:
More DTC sales channels, and improved experiences surrounding them
If you would like to explore some of these options for your winery—for example, packing ideas, DTC sales, or “the final mile”—contact us. We specialize in craftsmanship fulfillment for the wine industry, and we would love to start a discussion.
Recently, I had the pleasure of participating in a webinar about the state of the 2017 Wine Industry hosted by Silicon Valley Bank (SVB). Every year, SVB puts out one of the wine industry’s most authoritative annual reports, with forecasts based on a survey of more than 500 wineries.
Here are some of the main takeaways from that webinar:
There are many more interesting trends covered in the webinar and its accompanying report. Going forward in 2017, we are going to break down some of these trends and take a closer look at why they are occurring, and what to expect in the future.
There are four areas that we’ve written about recently and have received a lot of attention: The growing Millennial Market, the Rapid Rise of DTC Sales, Technology and the Brand Experience, and lastly Distribution. We predict that new solutions will continue emerging to address these areas, particularly when it comes to Curation, Compliance, Logistics, and Brand Experience.
If you can’t wait and would like to discuss these or related issues, feel free to contact us. Copper Peak Logistics has a decade of experience in the wine logistics and shipping industry, and we would love to discuss these trends and more with you.
2016 was indeed a busy year for us at Copper Peak, and we don’t anticipate 2017 being any different. That said, it is still well worth our time to review what happened in 2016, both here and in the industry at large. Doing so might just give us some glimmers of what to expect going into the new year.
Wine and fulfillment are both niche industries. So the area where they meet is niche squared. Still, we saw some interesting things in the tea leaves. For example:
What these stories tell us is that DTC is becoming a standard way for consumers to get products; moreover, the pressure is mounting on the wine business to do the same. That said, this is leading to a more challenging and often changing regulatory environment.
This past year we wrote several pieces on keeping summer deliveries cool, including a piece specifically on deciding on weather holds. We’ve heard a lot of angst from customers about this very issue. We also found that not many customers were up on all the options out there for shipping wine, food, and other temperature-sensitive products over the hot summer months. So we tried in 2016 to provide a little education and help folks make those critical decisions. We’ll likely revisit the topic before summer 2017!
New business models for DTC wine sales were a huge topic in 2016. For example:
Needless to say, it will be interesting seeing how these models morph, evolve, and improve in 2017. We expect to see more hybrid models being used, too.
Toward the end of 2016, we became especially interested in what, exactly, “craft” is, and what it means to have craftsmanship fulfillment. This topic is near and dear to our hearts, given that we take what we do as craftsmanship fulfillment for industries that know craft when they see it.
While we’ve seen more and more of our competitors talk about things like white glove service (a phrase we applied to wine logistics first), we are not aware of anyone putting the same emphasis on craft. We find this odd, given that craft is everywhere these days, from the Makers’ Movement to STEAM education to artisanal everything-under-the-sun. We here at Copper Peak really do feel like we are spanning the gap between logistics (which, at times, focuses too narrowly on efficiency and automation) and the world of craftsmanship.
It will be exciting to see how that gap is further bridged in 2017. We hope to start out of the gate strong, with a full report on implementing white glove service in an organization. Keep an eye out for it!
And as always, thank you for reading this past year. Here’s to a prosperous new one!
The Team at Copper Peak Logistics
Some of the most successful brands in any industry have a service orientation. The height of service is often called “white glove service,” a term that is catching on in many places. But just what is white glove service?
We take a serious look at this question and more in our latest report, “White Glove Service: 9 Case Studies That Reveal the Keys to Building True Customer-Oriented Organizations.” Our own Dave Dobrow referenced some of these examples during his participation at the 2017 Direct to Consumer Wine Symposium Private Client Sales – The Art of White Glove Service.
In this report (which is available for download here), we take a close look at companies that are knocking it out of the park when it comes to service—and doing so in a systematic way.
Throughout, we find a common pattern: White glove service is not just something that happens randomly with the occasionally stellar front-line employee. Rather, white glove service is a pattern of decisions and practices by organizations that routinely and consistently make this level of customer care possible.
Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. A large part of craftsmanship fulfillment is a commitment to white glove service. To learn more, contact us and we will be glad to explain how fulfillment and customer service go hand-in-hand.
Over the past couple of years, we’ve seen a surge of interest in things one would consider “craft.” For example, there is the culture of the Maker’s Movement, where champions of do-it-yourself projects share projects and tips for just about everything. There is also the rise of STEAM in education, meaning a renewed focus on Science, Technology, Engineering, Art, and Mathematics (and a natural outgrowth of STEM, which had the four elements minus the addition of art).
To us, these are not separate threads or interests. They represent a renewed interest—a Renaissance, if you will—in craft and craftsmanship. Different areas of society are tapping into this feeling in different ways, but they all reflect a common interest and, more importantly, a common work ethic.
So, if you feel like you are in a “craft” industry, it might help to get clear on just what this movement is, how it affects your work, and how to find it in the partners and vendors you deal with.
Around the world and across time, every culture has had its craftsmen. More than someone who just produced goods, the craftsman was also a symbol of industry, maturity, and care. Instead of passively consuming products, the craftsman created much of what he or she needed. Instead of letting the world happen, the craftsman helped shape it and influence it, bit by bit.
Of course, the very word “craftsman” conjures an image of a bearded man clad in a leather apron and rolled-up sleeves, toiling away in his workshop to produce beautiful and useful items. This surely is one type of craftsman, but there are others. Men and women, young and old, are today discovering the joys of craft.
And craft is not limited to traditional makers of durable goods, either: Other cultures, like the ancient Greeks, included doctors, lawyers, accountants, and other such professionals under their term for craftsman. Even horse-breeding was considered a craft. Today, we see craft in things like the “Maker Movement”: A culture of independent inventors, designers and tinkerers.There is a Maker magazine (called Make, naturally) as well as hands-on Maker Faires.
These fairs include booths with people showing how to pickle vegetables, make soap, and get started in beekeeping. (There was even a Time magazine article on these fairs, and the movement at large.)
So what makes such diverse professions and interests count as “craft”? In short, it is a particular work ethic. Wherever you find that work ethic, you’ll find someone participating in a craft.
What does that craft work ethic consist of?
The craft work ethic is an attitude and an identity, undergoing a revival in a marketplace numbed by generic, mass-produced merchandise. It is difficult to pin down, but there seem to be five strains to it:
We here at Copper Peak Logistics have been thinking a lot about that question lately, and ones surrounding it. Are we doing our fulfillment with true craftsmanship? (I think we are.) Are we serving our vendors who are dedicated to their craft? Are our vendors as into craftsmanship as we are?
We invite you, the reader, to join us in the exercise. Take a look at your vendors and ask yourself:
Chances are, very few of your vendors are truly craftsmen. While there’s nothing inherently wrong with that, you might be disappointed if you expect craftsmanship-level service from an organization that does not cherish this work ethic to begin with.
At Copper Peak Logistics, we strive to provide craftsmanship fulfillment for the wine industry and any industry that appreciates craft in their work. Contact us to find out more.
On the homepage of our website, we proudly display the fact that we are into “Craftsmanship Fulfillment.” If you haven’t heard the term before, you might wonder what it means.
One big assumption is that it means “fulfillment for industries where craftsmanship matters.” That is true. We specialize in wine logistics and fulfillment, for example, because we understand the heart and soul that goes into crafting a vintage. We appreciate the attention to detail and the “hands on” work that goes into making quality products.
But, for us, “Craftsmanship Fulfillment” also means a craftsmanship mentality applied to shipping and logistics. We feel that the same attention to detail and love of the process that goes into making a wine should also go into getting the wine to the consumer. We work hard in pursuit of quality, and always look humbly for ways to improve. That’s the crux of what craftsmanship fulfillment means to us. It’s simply a standard for how work–and our work culture– should be done.
So just how does that play out in the wine logistics and fulfillment sphere?
More and more logistics companies are touting their own “white glove service” in order to woo wineries and makers of luxury items. Indeed, we were one of the first to do so. But what does “white glove service” really mean?
The term itself refers to service that is top-notch or without parallel elsewhere in the industry. It originated because butlers, who oftentimes had to serve very exacting clients from rich and powerful families, needed to make sure that all household affairs were carried out to perfection. To ensure this, they would wear white gloves, the idea being that, when they ran the white-gloved fingers over a surface, they would be able to tell immediately if there was even a speck of dirt. To this day, white gloves are a symbol of service and perfection.
We take that lesson to heart in our own processes. We pay a great amount of attention to detail, because we know that our clients do. And we want to give our clients the same attention that they give their craft. We try to be attentive, reliable, and quick in our support for not only orders going out the door, but for the exceptions that creep into everyday shipping scenarios.
There are many contingencies to consider in shipping a product like wine, and also many procedures that must be respected in order to stay in compliance. It often helps to have a partner who can guide you through these issues. After all, good wineries focus on making good wine, not on the complexities of laws regarding interstate commerce.
For example, how do you decide on a weather hold for your products? What are your options for cold shipping, and when do you need them? What sort of license will you need to start selling and shipping, and will you be able to sell internationally? As you can see from our posts, these are exactly the sorts of questions that we stay on top of so we can inform and empower our clients.
When people hear “craftsmanship,” they think of something that is the opposite of technology, especially because “technology” is synonymous with “automation” these days.
But this need not be the case. Technology can be used in a thoughtful way to improve and empower craftsmanship. The trick is finding the right balance: Using modern technology to improve processes where they can do the most good, but also having a human presence when customization, personal attention, and problem-solving are needed.
Embracing technology does not have to mean giving up on who you are. Heck, even the Amish use power tools and telephones!
The other side of the coin from technology is, of course, human solutions. An app or an algorithm can tell you that wine sales spike at the end of November, but it can’t tell you to run a holiday promotion. Likewise, integrated software can let you or your customer track a delivery down to the minute until it reaches their door. But that software isn’t going to help you deal with an irate customer whose shipment was incorrect, late, or damaged.
No, those sorts of contingencies still need human beings in the mix for flexible problem-solving and people skills. The more your products are considered the result of a craft, the more important that human element will be.
All this talk of white glove service, accessible technology, and human solutions doesn’t mean much if our services don’t fit exactly what you need. The great part about all this flexibility is that customization is easy; for example, we here at Copper Peak combine experience from years of being on the client’s side of things with a deep understanding of the logistics and fulfillment side. We’ve seen just about everything, and we know how to get things done. We try not to over engineer our processes so that, in the end, we retain the full ability to customize a solution.
True, if you’re a craftsman, you probably aren’t focused on “productivity”—at least, not by that label. Quality and service come first. But here’s another truth: You can’t pay close attention to your product, or your clients, if you are putting out fires all the time or worrying about the logistics of getting bottles into customers’ hands. Part of Craftsmanship Fulfillment is taking care of our business so that our clients can have more time to do their job and follow their passion.
There are many forces in the market that can “dilute” a brand. Maybe items are offered at too steep a discount too often. Maybe the wine club has not provided upgrades or different experiences. Or maybe the delivery of wine was just too unpredictable, leaving customers’ expectations dashed. Whatever the cause, if your customers don’t have a great experience, they won’t come to get that “warm, fuzzy feeling” that keeps them coming back for more, again and again.
Every transaction is also the fulfillment of a brand promise. Helping companies deliver on time, track shipments, protect product, and incorporate marketing and incentives are all ways that we can help brands deliver on that promise. And again, customization has a role to play too: We are delighted when clients think creatively and want to try something new to differentiate their brands.
Productivity and brand protection are all important aspects of any business. But neither of these will keep a company afloat if it doesn’t also connect with customers. An engaged customer base is a loyal customer base, and they will spread the word about your company—if you can manage to connect with them on a personal level.
Explaining how that can be done goes well beyond this blog post! But we’ve touched on this topic before, in our 5 Marketing Fundamentals of Wineries.
That, for us, is what Craftsmanship Fulfillment is all about. If you would like to hear more about our specific approach—especially with regard to technology, personalization, content, and partnerships—we recommend you see our latest white paper: Subscription Services: Wine Industry Leaders Share Their Insights. Many of the lessons echoed here are at the core of what we do.
And, of course, you can always contact us.
In our previous post, we took a look at the history of flash sales and how they became a fixture in the DTC wine industry. Although this sales model has fared better with wine than with many other products, it does appear that the culture at large does not have the enthusiasm for flash sales that it once did.
Inevitably, any sales model will go through a cycle of high expectations and high popularity, followed by a “bursting of the bubble” and a leveling off. (For comparison, see the GartnerHype Cycle for new technologies—it predicts much the same sort of thing.) Although completely natural, such “renormalizing” makes wineries gun-shy about innovations that come down the road. That attitude persists even though data shows that flash sales have either held steady or grown over the years.
That attitude has begun to cast its shadow over subscription services as well. Subscription services have become increasingly popular, and many new companies are doing innovative things with them. But just as models for subscription services are being perfected, some wineries and wine sellers are voicing their skepticism. Indeed, a few have even wondered out loud whether subscription services are “the new flash sales.”
It would be beneficial, then, to compare and contrast the flash sales model with the modern subscription/wine club model. Although they share some similarities, each was born out of a different economic time, with marketing and sales goals. Thus there are some stark differences, and those differences can mean that their fates will differ. More importantly, both are unique solutions that wineries can adopt, depending on their needs and business situation.
The idea behind flash sales was simple: Provide deep discounts for a limited time, usually 24 hours, as a way to build excitement (and website visits) while off-loading excess inventory. The model really began to take off in 2007 and 2008, at the start of the recession. Sellers suddenly found themselves with excess stock, and consumers, for their part, needed to tighten their belts. Flash sales were an easy way to move slow-moving items, and customers felt like they were getting a real deal.
The idea of short-lived sales at steep discounts was not an invention of this century, of course. What made flash sales new and different was the extremely short duration of the sale—which marketers played up—together with the power of the web to deliver sales announcements and finalize transactions.
In a similar way, subscription services have also been around in some form or another for a long time. The fruit-of-the-month (or steak-of-the-month, or cheese-of-the-month…) idea has been around since at least 1910(!), and “wine clubs” have been around for a long time too. So the basic idea has a long pedigree.
What has changed these days is the approach that many companies are taking to subscription services. Heavy market research has gone into what makes subscription services successful, and the services themselves are morphed to accommodate current tastes and trends. For example:
These are just a few differences between modern subscription services and older thing-of-the-month clubs. (For more on modern subscription services, see our post on Dollar Shave Club, or our white paper from the ShipCompliant Direct 2016 panel.)
So, subscription services and flash sales are both modern versions of older, existing models. And they are both methods for selling wine directly to consumers. Both attempt to engage consumers and rely heavily on email, social media, and a web presence to do so. These similarities make the two models seem very much cut from the same cloth.
But this is just an appearance. Psychologically, the two are very different.
Remember, flash sales gained in popularity when there was a two-fold need. Sellers needed to get rid of excess inventory, while buyers wanted a good bargain. In a scenario like this, price comes into focus. Sellers had to find a way to slash prices low enough to trigger the buy and still make a profit. On the consumer side, because the sale included just one or two items, there was no choice. Price was the main parameter in the decision—quality, speed of delivery, and content less so.
Subscription services have gained momentum in a post-recession economy. Here, a good deal is still appreciated. But it is the exclusivity of the offer, not its limited time span, that motivates consumers. With subscription services, personalization, quality, customer service, convenience, and content are all features that attract and retain those club members. Price is, if it matters at all, a secondary focus.
This means that the modern subscription service has much more flexibility to deal with changing economic conditions. If the economy were to worsen (knock on wood!), subscription models can easily adjust to retain their members by offering steeper deals, smaller shipments, or more suitable pricing tiers. This, plus consumer engagement, helps retain consumers until conditions get better, at which point the model can adjust again to offer more exploration and curation.
Psychologically, flash sales were driven by a scarcity mindset. Consumers were compelled to snap up the outrageously good deal before it was gone. And while these kinds of sales are still popular in the wine space, the marketing campaigns that went with them sometimes led to burnout. In contrast, subscription services are more driven by feelings of inclusion and community, as well as a sense of exploration and adventure. The feelings may not drive a sale immediately but grow steadily over time and create intense feelings of loyalty.
Thus, the two models differ greatly in what is actually motivating the sale and sustaining engagement. For this reason alone, one cannot predict how one will do by looking at the other. Both are part of a general expansion of DTC sales, which have already totaled $2.2 billion in the past year.
On the bright side, both are different enough that each can be a tool in a winery’s arsenal. For example, a winery can have a full-blown subscription club for loyal customers and still offer the occasional flash sale to offload slow-moving inventory. Better yet: Make the flash sale exclusively available to your club members. Or, if you are still building your club, give your members early access to the sale. Such hybrid models can work wonders, as they allow you to hit all the important customer motivation points.
And in the end, why wouldn’t a winery want to use every tool available to reach customers where they are today?
Copper Peak Logistics offers craftsmanship fulfillment for the wine industry. We have decades of experience with Direct to Consumer (DTC) wine sales, under a number of different models. If you would like to discuss options for starting one of these models or enhancing what you have, contact us.
If one were to look at DTC wine sales eight or 10 years ago, one would see that flash sales sites were all the rage. Many of those sites still exist, but they do not seem to be enjoying the popularity they once had. Is this just because they were a flash-in-the-pan trend? Or have economic conditions and competition changed the DTC landscape?
The answer is a little of all of the above. Diving into some of the details about the rise of flash sites can give us some insights, not just into that model as a way of selling DTC, but also as a kind of case lesson. Understanding the trajectory of flash sites might hold lessons, for example, about how to do wine clubs and other subscription services in a smart way.
The first flash sale site was created by online retailer Woot.com in 2004 (although Sam’s Club had a similar “deal by email” model as early as 2000). This site had a “deal-of-the-day” format in addition to the company’s online store. Each day a special product was offered at a heavily discounted price, and consumers had 24 hours to pull the trigger on the deal or lose it.
The rationale behind the deal-of-the-day format made good sense. For the consumer, it meant heavy discounts on desirable items. For the seller, it was a way to offload extra inventory. Also at work was the psychology of scarcity: Because the discounts were steep but lasted only 24 hours, consumers felt they had to act quickly or else lose the deal on that particular item. It was the ultimate embodiment of the salesperson’s old pitch, “Act now! Supplies are limited!”
Since 2004, many other deal-of-the-day sites have sprung up. Some of these were additional offerings by established retailers, while some were “flash sale only” sites offering goods from multiple brands.
Importantly, flash sales enjoyed much success because of the way the economy was headed. Flash sales really began to take off in 2007 and 2008 when the market crashed and recession hit. Consumers, for their part, needed to tighten their belts, and so flash sites were a way to splurge a little on luxuries while still getting a really good deal. The “buy it or lose it” aspect also made the sale itself fun and exciting. For retailers, flash sales were often an easy way to move slow-moving items—a very important strategy when inventories were becoming backlogged with unmoved goods. Thus, flash sales fit with the scarcity mindset that came with the recession.
Another twist to the flash sales trend was the rise of social media. Because some deals required a “participant quotient” for the deal to activate, it became popular to share them across social media and invite friends to participate. This amounted to a kind of inexpensive word-of-mouth marketing.
The wine industry was no stranger to flash sales, either. Sites like WineShopper, Last Call Wines, Wine Woot, and Wines ‘Til Sold Out sprang up during the flash sale craze, and several of them are still with us today. Many of these companies offered wineries a chance to offload inventory and get cash on hand to improve cash flow but still offered steep discounts to consumers.
Flash sales are by no means gone, but the gold rush has certainly petered out and the model has normalized.
For example, many flash sale sites are being bought out by larger, better-leveraged retailers—and at a rate that is far less than their peak valuation. Gilt Groupe, for example, once valued at $1 billion, was bought by retail conglomerate Hudson’s Bay Company for $250 million. Likewise Fab.com was valued at $1 billion but sold for $15 million in 2014. Sites such as Rue La La and Totsy have experienced major downsizing.
Even Groupon, a remarkably well known and successful site, has seen its stock value plunge about 80% since it went public, with fewer sales and local partnerships now than it had at its start.
The question is: Why? Part of the story is outright burn-out. An occasional barn-fire deal is an exciting thing; but one a day can be exhausting. As consumers were added to more and more marketing lists, triggered by their single flash sale purchase, the deluge of offers became too much for some.
Another part of the story is the recovering economy. A better economy meant less “excess” inventory laying around, and more discretionary spending. Deep discounts thus became harder to justify.
A final part of the story was, frankly, greed. A number of flash sale sites tried to widen their margins even as they offered huge discounts by marking up shipping rates and restocking fees. But those huge shipping and return fees devalued the deals in the eyes of the customer, further eroding customer loyalty.
In retrospect, though, that “greed” makes sense. Flash sales need a sustained marketing effort to re-engage past customers. But the average customer simply doesn’t drink wine fast enough for the model to be sustainable. Thus, there was always a mad drive to get new customers, and to squeeze more revenue out of existing ones. Still, how quickly companies could add customers dictated their ultimate success.
There is an additional worry with flash sales sites in the wine space: The dilution of a brand. By offering premium labels at a steep discount, some wineries inadvertently “cheapened” their brand.
That misstep is being addressed, however, by wineries that are combining daily deals with subscription services and content/curation. For example, sites like Naked Wines, Winc (formerly Club W), and Blue Apron Wine are maintaining much better control of the customer experience, and thus actively building a brand around their core knowledge and service. Thus, even if wines are offered at a discount, customers are still coming back again and again for this kind of purchase experience.
This hybrid approach has many benefits. For example, good deals and fast DTC shipping are especially appealing to millennials, who are quickly becoming one of the largest demographics when it comes to wine purchases. Flash sales also make sense as seasonal “specials,” especially when existing wine club members get special treatment (for example, longer access to the deal, early bird specials, or even steeper discounts). Finally, some argue that such sites are good brand exposure, if the deals are couched as ways to sample new stock (a position often taken by subscription services).
Of course, the story is still being written, both for subscription services and for these hybrid approaches. But there are some important takeaways from the history of flash sales that are relevant to both of these newer models. That will be the focus of our next post.
In the meantime, if you would like more information on the subscription services topic from those working in this space daily, download our most recent report where wine industry leaders share their insights. I’m also happy to answer any questions you may have on this topic so don’t hesitate to reach out. Thank you for reading!
When it comes to shipping, few products have seen more changes than wine and related products. Not only are there regulations to contend with, but the very models that wineries are using to market and sell wine are changing. This makes the process of getting products into the hands of customers that much more complex.
Traditionally, wineries would start their research into shipping by getting quotes for Full Truckload (FTL) and Less Than truckload (LTL) shipments from carriers. Before doing that, however, today’s savvy shippers ask themselves a number of questions so that they can request the right services and minimize future surprises:
Question 1) What is the product classification? Each product has a different classification. Wine has a different classification than lightbulbs or golf clubs, and that classification needs to be known in advance of getting a quote. For example, wine is typically considered a class 100 product.
Question 2) How fast does the shipment have to happen? Carriers like FedEx Freight, Roadrunner, and others offer different pricing based on the service requested. The various services often differ in terms of speed. For example, priority service has a faster delivery time, but will be more costly than an economy service with a slower delivery time. (FedEx freight offers a Money Back Guarantee with their Priority Service offering.)
When it does come time to request quotes, it is worth asking if drivers will be working alone or as part of a tag team of drivers. A tag team of drivers can usually produce faster delivery, as the truck can continue to operate with minimal rest stops.
Question 3) What will loading be like, and what will receiving be like on the other end? Is the shipment going from a facility with a dock to a facility with a dock? If so, there are a number of vehicles that can handle that move. Different vehicles with different capabilities will be needed is the move is door to dock, or dock to door. Without knowing what the loading and receiving requirements are, you may end up choosing the wrong vehicle to deliver your freight and thus the shipment will get charged additional fees..
For example: A dock-to-door shipment will require that the final mile delivery vehicle will need a lift gate—a device on the back of the vehicle that can be raised and lowered during the loading and unloading of goods. A pallet jack, which is a basic form of forklift for moving pallets, might also be required.
Question 4) What kind of operation is on the receiving end? Is the shipment being sent to a residence? A business? Will the delivery need to be taken inside a building or an office? While large bulk wine move are typically dock-to-dock transfers, it is important to note when they are not, as these kinds of moves often result in additional charges.
Question 5) What kind of shipping “environment” is needed? Most trucks are not temperature controlled. For the most part, these “dry van” trucks are fine for shipping products that are not temperature sensitive. Even products that are temperature sensitive, like wine, can be shipped during the cooler months, or for short distances. However, shipping wine or temperature sensitive products long distances, especially during the summer months, is gamble. Temperature controlled shipping might be the way to go.
An increasingly popular way to preserve wine from undue heating (or freezing) during shipment is to use thermal foil blankets, which provide additional insulation. Fedex, for example, provides a blanket service that saves wineries the cost of providing their own blankets. Protek Cargo out of Napa, CA, also provides a number of thermal pallet covers and has a blanket service lease program for temperature sensitive deliveries.
Before getting quotes for FTL or LTL shipping, it pays to ask and answer these kinds of questions. Doing so ensures a more accurate quote and limits the “surprises” that can arise.
At Copper Peak logistics, we have done many quotes for LTL, FTL, and other kinds of shipments, all as part of our craftsmanship fulfillment for speciality products. If you would like to learn more, please contact us.
Subscription services, in the form of wine clubs, are a hot topic today. This past summer, Copper Peak Logistics conducted a user group panel at ShipCompliant DIRECT 2016 (of which we are also a sponsor).
Now, our readers can get the fully distilled content from that panel in our most recent white paper, “The Cutting Edge of Wine Subscription Models: How the industry is driving engagement with technology, personalization, and more.”
Here are a few key quotes you’ll find there...
Of course, the full list of trends, tips, and advice can be found only in our white paper. We are providing this so that both wineries new to this market, and those searching to improve what they already have, can find ways to gain customers, fight club attrition, and bring their wines to the world. Who better to get advice from than the industry experts?
Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. We’ve helped many wineries and merchants of all sizes find peace of mind in their wine club and subscription services fulfillment. Let us help you, we're happy to answer any questions you may have. Don't hesitate to contact us.
It was recently announced that European giant Unilever purchased the Dollar Shave Club, to the tune of a cool $1 billion. This signals that a disruptive shift in the economy has come of age. It also means that wineries should take a long look at modern subscription models to keep up with best practices when it comes to their own wine clubs.
As we mentioned in our previous white paper on subscription serves, Dollar Shave Club (DSC) has been a success story worth emulating. Their model is simple: Send a small quantity of razors for a low monthly fee. CEO of DSC Mike Dubin launched the company four years ago with a hilarious tongue-in-cheek YouTube video that mocked the industry and quickly went viral. (If you’ve never seen it, you should.)
Although DSC is still working toward profitability, their subscription service boasts 3.2 million members to date. According to sources at Unilever, DSC had revenue of $152 million last year and is on track to exceed $200 million in 2016.
Most importantly, DSC has been able to chip away at the goliath in the room: Market leader Gillette (owned by Procter & Gamble). Gillette responded to the outsider, first by suing them (claiming that one of DSC’s razors was a patent infringement) and then by launching their own subscription service, Gillette Shave Club.
The move makes sense for Unilever (the European consumer products company behind Dove soaps and AXE body sprays), which now has a backdoor to the North American razor market. More importantly, the deal will give Unilever unparalleled data and consumer insights, as it will have access to DSC’s aggregated data on subscriptions, attrition, cohorts, and so on.
It will be interesting to see how much free reign DSC is given to “be itself.” Its viral videos, its hipster-esque newsletters, and its no-nonsense selling style have made it the brand it is today.
So, before DSC changes with the transition, we thought it would be helpful to look at a list of all the things it has done right in the past four years, noting that wine clubs and gift services are increasingly following suit.
(Note that all 7 of these things are strategies that your wine club and your brand can implement to grow membership and profit):
If you would like to read more about category leaders in the subscription services area, or about what recent experts had to say at the ShipCompliant “DIRECT 2016” panel on subscription services, follow these links to our white papers. You can also see the PowerPoint presentation here. and the video here.
Copper Peak Logistics is a 3PL service specializing in craftsmanship fulfillment for specialty products. We handle a number of subscription club services, maintaining a high degree of customer satisfaction.
If you would like to discuss what you can do with a new or existing wine club, please contact us!
Yes, even with the summer heat bearing down on us, it’s time to start thinking about corporate gifts for the holidays—Especially if you are in a wine or food business.
We suggest that companies start planning now, since there are several opportunities and pitfalls that come with holiday shipping. For example, there’s:
With a little foresight and planning, your company can be an ideal destination for companies looking to give corporate gifts. But, to fully take advantage of the holiday season, you will need to start planning now. We would love to help answer any questions or advice you're seeking! Contact us, we're help you get your planning squared away!
Last month, we had the pleasure of conducting a user group panel at the ShipCompliant Direct 2016 event, of which we were also a proud sponsor. That panel included industry experts weighing in on a topic that everyone is exploring these days:
The idea of a subscription service is not new in the wine space; wineries have been running wine clubs for decades. What is interesting, though, is how other industries have gotten into the game—and what the wine industry can learn from successful models. (For a more complete review of this topic, take a look at our white paper, “From Wine Club Subscription to Wine Club Experience”, available for download.)
The panel included some knowledgeable experts in this space, including:
Evy Chu, Ecommerce Manager., Blue Apron
Sam Straka, Product Manager., ShipCompliant
Laila Subaie, Wine Club Manager., Miner Family Winery
Ariel Myers, VP of Sales, Recurly, Inc.
We’ve made available our slides from the panel here for those who couldn’t make it. And we will also have a forthcoming in depth report with detailed information from the panel.
To give you a taste, we discussed:
If you would like to be put on a list to receive our white papers & blogs, contact us, or find more content on topics like this, just click here. Thanks for reading!
Tasting rooms and wine clubs are not the only way to spread the “good news” about a winery’s outstanding product quality (and thereby boost Direct-To-Consumer (DTC) sales). Getting your wine in front of reviewers, writers, and other influencers, as well as into wine competitions, can be an important part of the marketing and outreach program for any winery.
To do that, your winery will need to send media samples to these reviewers, influencers and competition holders. At first glance shipping Media Samples might seem exactly the same as any other wine shipment—but there are some complications. Even when sending samples, you will want to make sure you are in compliance and that your samples are not delayed because of shipping issues. Some things to consider include:
Contrary to popular belief, sample shipments are not typically licensee to licensee shipments. Most writers, bloggers, influencers, and reviewers are not licensed by any federal or state agencies as a grower, producer, manufacturer, warehouse, retailer, winery, or importer/exporter.This means there might be restrictions in shipping to them, as well as taxes that must be paid.
There are no current federal or state rulings in regard to sending sample shipments. Industry best practice is to treat media sample shipments as if it is a Direct-To-Consumer (DTC) shipment. Since wine may not be given away, taxes must still be paid and reported as a DTC shipment. Typically, the winery or its marketing department would be listed and reported as the purchaser for a media samples shipment being received by a writer, blogger, or similar reviewer.
Not all bloggers, reviewers, or influencers freely accept samples without prior authorization. Before you ship, identify the end recipient and verify whether he or she needs to be notified in advance. This keeps the package from being rejected once reaching its destination—plus, it’s an excuse to start a conversation and build rapport.
Some shipments may require specific forms to be sent with the packages. These may require additional information such as appellation, vineyard designation, alcohol content, winemaker, and so on. Organizations like Wine Enthusiast and Wine & Spirits, for example, require these types of forms. Again, best practice is to contact the organization or people you want to send samples and ask what information they require.
Wine Media Samples are a great way to get your wine and your brand out into the wider world. Just keep in mind that they are wine shipments, and so all of the caution and common sense that goes into DTC orders applies to wine Media Samples as well.
Vice President of Client Services
Copper Peak Logistics specializes in shipping wine, including Direct-To-Consumer (DTC) shipping. If you would like to find out more about what is involved in shipping Media Samples, contact us. We would be happy to help.
*** Please note that Copper Peak Logistics is neither a compliance expert nor a legal expert, nor are our employees lawyers. Therefore, the material in this post is for informational purposes only and not for the purpose of providing legal advice. Please check with an appropriate legal or compliance expert if that is your need.
With summer approaching, companies are planning for summer shipping. In a previous post, we addressed the various options for temperature controlled shipping and other methods for keeping your products safe from the summer heat.
Many companies have a long established history of holding shipments until the Fall and have set customers expectations that no shipments will occur until the weather gets cooler. But this practice is quickly changing. More and more wineries are exploring options for summer shipping, weighing the risks and costs against the possibility of damage (and the cost of returns). And they are weighing those options in communication with their customers, in many cases putting the decision to hold or ship in their hands (along with the higher cost of heat-protected shipping solutions). What was once common practice is now a risk calculation for both parties.
On the one hand, delaying orders when the heat is too intense will prevent spoilage during shipping. However doing so may lead to cart abandonment (and less revenue) because newer customers may not be willing to wait for 4 months to get what they want. Remember, well known brands such as Amazon, Apple, and Zappos have trained the average eCommerce consumer to expect fast shipping and two-day delivery.
On the other hand, providing that “instant gratification” does come with a risk--but that risk landscape is changing. While there is some possibility that wine can be heat damaged during shipping over the summer months,the body of work over the last 5 years has yielded only a handful of instances of clients telling us that there has been heat damage, seepage or cork push.
Forward staging, FedEx Cold Chain, UPS Temp Control and ice pack shipping are all options available to wine shippers to prevent possible heat damage. This means that you can provide customers that instant gratification--especially for special occasions like an anniversary, a birthday or other special event.
So, though weather holds might be an ingrained practice, they should not be a “knee jerk” reaction to hot weather. The decision to do a weather hold should always be a calculated one. While not an ideal option, delayed shipping can reduce the cost of replacement in the event of heat spoilage and/or the cost of returns arriving back at the winery or fulfillment center. But those costs need to be measured against cost of lost opportunities that come with a weather hold.
To make such a calculated decision, you should consider:
How long will the weather hold need to be in effect? The longer a shipping delay, the more customers become impatient. While a delay of a day or two might not be a big deal, a delay of a month or more will be. You will need to determine whether your weather delay is likely to last a few days, or for most of the summer.
Have you promised a specific shipping window? Customers hate broken promises. It’s easy to lose potential repeat customers if you promise quick shipping at a certain rate, but then have to delay shipping the product to ensure quality. A contributing factor of wine club attrition is customers not getting the regular shipments they expect. In the end, keep your promise and if you can, exceed expectations. Communicate!
Have you built a “regular expectation” of delivery? Even if you don’t explicitly promise a shipment by a certain date, customers might nevertheless come to expect prompt shipments, especially if they have received them in the past. For example, if you have a wine club that delivers to members every quarter on or around the 15th of the month, it builds the expectation that every shipment will come on the 15th.… of every month. A weather hold can violate that expectation, even if you did not explicitly offer it.
What is your exposure if a product is shipped in a line haul truck? This starts to get down to the nitty-gritty of a weather hold calculation, specifically when moving larger volume. Shipping within a single zone might not expose your product to much risk; but shipping, say, from zone 2 to zone 8 will. If you know how much product is going to be shipped in an FTL or LTL shipment, you can estimate how much product can be potentially ruined. (Exact percentages will vary by wine and by route. But some estimates are that as much as 50% of a shipment can be ruined.) Sum the cost of the damaged product.
If a DTC delivery gets returned, how much would it cost you?A similar issue arises at the package level when considering DTC sales. The farther a DTC shipment needs to go on the ground, the longer it will be in a potentially hot UPS, FedEx, or GSO truck. In such cases, even wine that is technically not “ruined” might lose many of its characteristics and get sent back by the (now dissatisfied) customer. Sum the cost of replacing the product and shipping replacement orders--assuming, of course, that you are picking up the shipping costs for the replacement. (Multiple warehouse and staging facilities can mitigate this some, as products can be stored in a temperature controlled facility and then shipped via a shorter ground or air route.) But no matter what, remember that 2Day Air packages, 3 Day Air Packages and Ground/ Residential Delivery packages all have a shipment commitment by the end of that service's’ business day.
What is the cost of the alternatives? There are alternatives to weather holds, of course: ice packs, Fedex cold ship, warehousing in multiple locations, and so on. We describe some of them here. Once you know the potential cost of lost or damaged inventory, you can compare this to the cost of these shipping alternatives.
Copper Peak Logistics specializes in shipping wine, food, nutraceuticals, and other temperature sensitive products. If you would like some help going through the calculations and seeing if a weather hold is the right move for your operation, contact us. We would be glad to help.
If you are in (or getting into) the Direct to Consumer (DTC) wine space, there are likely a lot of issues you are trying to tackle at once: containing shipping costs, choosing warehousing solutions, keeping products cool during transit, and exploring options for multiple shipping locations, just to name a few that we’ve written about.
So it’s understandable if the issue of data security practices at your strategic partners has not been on your radar. Still, it is a very important subject, as your customer’s privacy could easily be at stake.
Our sister blog over at Materialogic handled this topic well in a recent post about data security and what you need from your 3PL. They suggest, rightly, that shippers look past the headlines and the hysteria and ask what is really at risk, and what positive steps can be taken to avoid problems. The piece ends with an excellent list of questions to ask a 3PL to ascertain whether they have a solid data security plan in place according to best practice.
We suggest you take a look at the post and, if you have any questions about data security and 3PLs, reach out and talk to us. Your customers privacy is important, and safeguarding it is another way to keep those loyal customers.
You’ve decided to enter the wine space and you’re looking into logistics. You might be considering a 3PL to handle your DTC shipping details. As a winery, an importer/retailer, or as a marketing agent, you will need to become educated as you do your diligence to find the right fulfillment partner.
To help with this process, Copper Peak Logistics has put together five important considerations you will need to research before you begin contacting 3PLs in order to make your engagement more productive.
Before you contact a 3PL, be clear about what license type you have and set your expectations accordingly:
A Type 02 Winery can ship to as many as 43 states, provided the winery has permits in those states. This license is typically reserved for wine growers.
A Type 17/20 Retailer can ship to as many as 16 states, provided the retailer has permits to ship into those states. Holders of this license are typically considered retailers under state direct-to-consumer shipping statutes.
A Type 85 Online Retailer can ship to 14 states provided the online retailer has permits to ship to those states. Type 85 enables the licensee to make direct sales of wine to consumers via the internet, direct mail or phone (from a location not open to the public) without the requirement to also hold a wholesaler license.
Out of the 50 states, three—Mississippi, Utah, and Kentucky—specifically prohibit the direct shipment of alcoholic beverages to consumers. Some counties within states do as well.
In the wine space, legal compliance is as important as it is complex. A wine retailer basically has three options for handling compliance issues: designate an employee to handle them, choose an independent consultant to handle them, or select a SaaS product such as ShipCompliant to manage your compliance needs. (In some cases a winery may use multiple solutions simultaneously.)
As of this writing, ShipCompliant is the industry standard for accessing up-to-date state regulations and tax rates for direct shipments to consumers, as well as tracking shipments to ensure compliance. It also handles tax filing, label registration, and much more. To get an idea of what it costs to get a permit in the state you would like to ship to, use ShipCompliant’s handy ROI calculator.
Whatever option you choose, you must have a system in place to ensure proper compliance and keep your business running without legal entanglements.
Federal law states that, for an importer to ship Direct-To-Consumer (DTC), they must meet two requirements: 1) the importer needs to have a Federal Basic Permit to import wine, and 2) they must comply with all state and local laws for the states to which they want to ship. For example, many states (Louisiana, Nebraska, New Hampshire, Nevada, North Dakota, Oregon, Virginia, Wyoming, West Virginia) require a direct shipping permit, a license fee and/or application fee, sales and excise taxes, and reporting.
Most states will restrict the types of businesses that can properly receive a permit for DTC sales. For example, a state might require that only properly registered wineries actively practicing winemaking can receive a permit. And, even if an importer has a winemaking operation, states may limit it to wines produced in the United States.
Marketing agents, for their part, act as an agent of sale on behalf of a winery. This usually means a company that is advertising the winery’s products on their platform and then facilitating the sale. The actual sale, however, is between the winery and the consumer. It is up to those parties to determine what states the winery can legally ship to and what restrictions are in place.
Contact information, including websites for the alcohol beverage control board in each state, can be found on the Wine Institute website.
eCommerce sites for the wine space differ slightly from typical eCommerce platforms like Magento, Shopify, and WooCommerce. Those platforms do not integrate readily with software solutions like Shipcompliant and others used by fulfillment centers. So, before you engage with a 3PL, make sure that you’ve taken the appropriate steps to ensure your eCommerce platform is suited to the wine space and either is or can be made compatible with standard software solutions.
For example, both Magento and WooCommerce have plug-ins that help with integration (Magento’s plug-in is through a company called Vonnda, while WooCommerce has a plug-in through a company called h2 media). Shopify does not currently have a plug-in, but there is one in development.
eCommerce platforms and sites specialized for the wine industry include eCellar, VineSpring, Vin65, Cultivate, Captina, 750, eWinery, and many more. These are all compatible with ShipCompliant out-of-the-box. You might want to look into some of these solutions if you plan on conducting online sales in the wine space.
(For a list of all platforms compatible with ShipCompliant, see https://www.shipcompliant.com/current-partners/).
Warehousing and fulfillment are often seen as two separate sides of the same coin. You can engage a partner for handling one, the other, or both. There are business models that make sense with each choice.
Typically a fulfillment center is not a bonded facility. The fulfillment center would only want enough tax paid inventory on hand to fill a certain amount of orders. For example, they might only want a 30 or 60 day supply of the SKUs you are selling. Once that inventory is depleted, the winery will pay any taxes to the government and then the product will move from the bonded storage facility to a fulfillment operation.
For that reason, many wineries will use a bonded/long-term storage warehouse facility to store the majority of their goods until it is time to sell the product. Since importers pay their tax at time of import and retailers pay tax at the time of purchase from a winery or importer, the inventory is technically tax paid. The inventory can go directly to a fulfillment center when needed or else stay in a long-term storage facility.
There are only a few companies that offer bonded/long-term storage of goods, and even fewer of those can offer DTC fulfillment in addition to the storage. They are two different business models. You will need to carefully consider your needs and search for partners that can fulfill those needs, keeping in mind there are usually additional costs associated with moving wine into and out of storage.
Making and selling wine can be a fulfilling line of work, as well as a tremendous business opportunity, but it cannot be taken lightly. Before you craft a business model around DTC sales, consider several issues with regard to licensing, compliance, technology, warehousing, and fulfillment.
If you feel you have these areas covered, and you are ready to speak with a representative from a 3PL, we suggest you download our Wine Fulfillment Pre-Engagement Checklist. This will help you organize your questions and make the engagement process more productive.
*** Please note that Copper Peak Logistics is neither a compliance expert nor a legal expert, nor are our employees lawyers. Therefore, the material in this post is for informational purposes only and not for the purpose of providing legal advice. Please check with an appropriate legal or compliance expert if that is your need.
There are many ways for a wine company to build their brand. Of these, wine clubs are a great way to build a loyal customer base while creating a consistent revenue stream.
Still, many wineries face a challenge when it comes to sustaining effective wine clubs. In fact, some of the industry statistics tracking wine club participation paint a less-than-rosy picture[…]
To learn more and read about Lessons on Subscription Services click here.
Most wineries don’t bother with RFPs when looking for a logistics partner. That’s OK: A good referral to a company experienced in your vertical, or well established in your geographic area, is often a preferable way to find a 3PL partner– and it takes less time and effort.
Still, there are times when an RFP is needed. And the worst thing that can happen is when you go through the RFP process in all its grueling detail, only to have the service not be what you expected, or to have hidden fees eat away at your bottom line.
When costs far exceed what a winery originally contracted with their 3PL, we’ve found that the #1 culprit was an inadequate or misleading RFPs. So, if you are thinking about sending out an RFP to 3PLs, you’ll want to know best practices for getting the service you need–with no “surprises.”
If this is your situation, you might want to download this white paper published by The Global Supply Chain Institute over at the University of Tennessee Haslam College of Business. (There’s also a very nice overview of this paper over at our sister company blog at Materialogic.) It’s a great overview of best practices for selecting and managing a 3PL; general enough that someone new to RFPs can understand it, but detailed enough that even an RFP veteran fill find useful information.
We understand that, of all the activities that go into a running a successful wine or food business, mastering the art of the RFP is probably low on your list of priorities. But not being up on best practices can cause headaches down the road. If you’d like a fair assessment of whether an RFP process is right for you, or if you want a partner to walk through the logistics process and skip the RFP altogether, give us a call.
Copper Peak Logistics provides craftsmanship fulfillment for speciality products, specifically wine, food, and nutraceuticals. Our white glove service is deeply rooted in customer relationships– starting from the very beginning.
Our sister blog over at Materialogic just put out a great piece about dimensional (DIM) weight pricing that is worth a read. FedEx and UPS adopted new rules for DIM weight pricing about a year ago. These rules not only changed the pricing for shipped goods, but also meant that more items would be subject to DIM weight pricing (as opposed to actual weight).
The details of how DIM weight is calculated -- and what this means for shippers -- is covered in the post. But the basic idea is this: less dense packages (large but light items) may now be subject to increased shipping rates.
We wanted to bring it to our reader’s attention because there might be some special cases where DIM weight makes a big difference in shipping costs. For example:
We would love to hear from our readers whether DIM weight pricing has affected business, and how you have been dealing with the change.
Shopping cart abandonment is the bane of ecommerce, and retailers try all sorts of strategies to re-engage customers who have forsaken an order. A new study by retail marketing company Listrak looked at the top 1,000 internet retailers and their use of shopping cart abandonment (SCA) campaigns . This was the fifth consecutive year that Listrak ran this study, and the main finding was that, although use of SCAs is still growing, it seems to be reaching a plateau -- and well before its use has become widespread.
Here are a few of the interesting highlights of the report:
Those interested can download the entire study from Listrak. The numbers here seem to be pretty clear: There is still a lot of money being left on the table when it comes to using SCA re-engagement campaigns. Best practices are gravitating towards more emails (at least four) with discounts and incentives offered later in the sequence.
Copper Peak Logistics provides craftsmanship fulfillment for speciality products including wine, food, supplements, and nutraceuticals. We pride ourselves on our insights into intersection of logistics and marketing for these industries. Contact us if you want to learn more.
Though summer is still months away, companies may well be into their planning for summer shipping. Summer deliveries are a unique challenge for the food and beverage industry, particularly when it comes to wine shipments. The heat can easily spoil an entire truckload of goods if you do not plan appropriately. Otherwise, you’ll be postponing shipments of those tasting room and wine club orders…and who wants to wait four months for their order?
So what options currently exist for summer deliveries? And what are the pros and cons of each? Here is a quick look at the most common alternatives.
Ice pack shipping has been the traditional way of maintaining a package’s temperature during transit. There are a variety of ice pack choices available depending on your product’s temperature needs.
Ice Pack Shippers: the Pros
Ice Pack Shippers: the Cons
A second option lets you reach distant customers via ground shipping more quickly by warehousing some stock in a second, more central location. For example, Copper Peak offers warehousing and shipping from our centrally located St. Louis facility. This also means that your products spend fewer continuous trips in potentially hot trucks.
Multiple Locations: the Pros
Multiple Locations: the Cons
Your third option is with FedEx Cold Chain service from California. Packages are picked up by FedEx Supply Chain Transportation and delivered to their consolidation point and mixed with other FedEx Cold Chain clients. Packages are arranged by recipient zip code location and are placed on FedEx Supply Chain temperature-controlled line haul trucks to be delivered to any of six different FedEx hub locations around the country. Cold chain can be used in conjunction with FedEx Delivery Manager or the FedEx, “Hold at Location” (HAL) services.
FedEx Cold Chain: the Pros
FedEx Cold Chain: the Cons
A fourth option to consider is zone skipping. This is where a shipper consolidates many individual packages, holding them until the number of items reaches a full truckload. Those items are then sent together from one zone (location) to another. For example, Shipping from Napa Valley/ Sonoma Valley might be in UPS/FedEx Zone 2, while New York is in Zone 8. Shipping directly from Zone 2 to Zone 8 via consolidated truckload would be zone skipping. From New York, the shipments would be inserted into the UPS/FedEx network and ship from that locations zone to the delivery recipient zone. This will change a zone 8 shipment to a Zone 2 or Zone 3 shipment. The idea is to eliminate small package movements one at a time and insert a consolidated move of many packages across the country for a potential savings. Copper Peak calls this the Zone 78 program.
Zone Skipping: the Pros
Zone Skipping: the Cons
As a last ditch effort, you can always put orders on hold during the hottest times of the year. Your customers won’t likely be happy with the delay, but better to have an order arrive late and safe than have it arrive spoiled. Still, we find that the above options are worth the investment in terms of customer experience. It is money well spent.
Not all strategies wineries can adopt when it comes to wine storage, logistics and DTC shipping are created equal. A good example of this is the question of whether it makes sense to use multiple facilities for shipping.
This might sound like a minor issue. One warehouse or two? Who cares? It sounds like the kind of issue that a shipper or 3PL might worry about, not a winery. But when wineries are the consumer of shipping services, choosing certain services becomes an important business decision. Consider these facts:
If you are one of these small-to-medium sized wineries, these numbers are a bit frightening. They mean that it is going to be harder and harder to get your brand “out there” and in front of customers.
So what does this have to do with location? Using facilities in multiple locations makes sense when certain goals are part of your sales and marketing strategy—like increasing customer satisfaction with an improved speed to market and the potential to save dollars on shipping cost.
Ecommerce has been around long enough that customers expect certain things. They have grown up in a world where Amazon offers 2-day shipping on just about anything, and “on demand” means, literally, on demand. But if you have a vineyard in California, there’s no way to ground ship to the East coast in that time.
Enter forward staging. With forward staging, some proportion of your inventory is sent to a second location that is more centrally located in the middle of the country for storage. When orders are processed, they are packaged and shipped from the location that is closest to its end destination, thus achieving a faster delivery to market. This multiple location strategy allows you to greatly reduce the time in transit for packages (typically reducing east coast orders from 5 days down to 2 days), and thereby increasing customer satisfaction. This solution also minimizes some of the risk to your product due to weather issues and handling by the carriers.
True, the above advantages can be had by using air freight, but at a significantly higher cost. Using ground shipping with forward staging can be up to 35% less expensive compared to 2nd Day Air shipping. That’s a significant savings and major impact to your bottom line. (Additional savings can be had as this does not account for fuel surcharges, which are historically charged at higher fees for air service versus ground service.)
So, if you really are focusing on the customer delivery experience as part of your business model, it would be better to use forward staging with ground shipping everywhere in the country. We’ve had clients tell us that this enables them to offer multiple promotions to increase brand loyalty (for example: Shipping Included, Add another bottle for only X dollars, etc.) thus encouraging more reorders and helping retain wine club members[BNT1] .
All that said, using multiple shipping locations is not a one-size-fits all, cookie cutter solution for every winery. For example, it does require some additional analytical work and planning ahead to make sure enough product is located in each location to prevent out of stocks. It is a tool that some wineries effectively use to their full advantage when it comes to managing the customer experience and standing out in the crowd.
Things to consider when contemplating multiple shipping locations:
As we all know competition in the Wine industry is fierce and continues to accelerate. It’s great to have a craft brand experience that wine enthusiasts can enjoy - but when there are literally hundreds of those to choose from, you can’t rest on your history, personality and craft alone to stay memorable and profitable. Executing a multiple location strategy might be the smart move to get your chosen brands into the hands of your customers more quickly, more safely, and at a more affordable rate that can encourage additional sales growth.
Thank you for taking the time to read our article. If you have any further questions on how Copper Peak Logistics can help your winery manage it's fulfillment, plese contact us.
Milton Cornwell- President
With major retailers like Costco buying up private label brands and hard liquor becoming more and more trendy, smaller privately-owned wineries have more competition than ever. We’ve witnessed many smaller wineries languish even though they had a great product, just because they couldn’t build that loyal fan base.
But over the years we’ve seen some true and tried things that work. And while it may seem beyond your budget to invest in expensive marketing-- we get that-- the truth is, it’s also out of your budget not to invest in it.
Fortunately, building your business doesn’t have to break the bank. So let’s go back to basics: here are some simple ideas you can implement that will grow your customer base while giving you the most bang-for-your-buck.
What is great about each of these programs is that you can track their effectiveness with metrics, which are which is a key part of an intelligent marketing plan. The more data you have, the more you can see what’s working, and what’s not, so you can spend your marketing dollars more wisely.
These ideas are just the tip of the iceberg, of course. Keep in mind that with a little creativity and a marketing plan, your small winery can bring in bring in big business.
At Copper Peak Logistics, our focus is on helping wineries meet the growing demands of shipping. Give us a call at 707.265.0100 or check out our website at http://copperpeaklogistics.com.
A vendor of ours once admitted that he never would have had a “Dark and Stormy,” nor kindled a love of ginger beer, if it weren’t for a holiday gift from his mother-in-law. That one kit introduced him to a new drink, and netted a new customer for the company that made his favorite dark rum.
Now think about this for a bit. What for most bar owners would be a mere restocking exercise was turned into an actual experience just by putting some spirits together with a ginger beer and a fancy glass. And we see this pattern over and over: people trying new things just because there is the right presentation, leading to the right experience.
We’re talking, of course, about kitting. Generally speaking it just means the process of assembling, packing, and shipping multiple products in a single package or sku. Done right, kitting can be a tremendous marketing tactic that creates excitement and incremental sales opportunities with customers. Kits can be built in advance and carried in inventory (typically the preferred and less costly option), or built on the fly as orders are received (best used when kit component stock is limited and adding a day to turnaround times isn’t an issue).
A Wide Range of Applications
Kitting takes on an important dimension when talking wine, spirits, and food items; it actually becomes a marketing tool. Kitting can be a whole new way of marketing your products, cross-selling, and adding value. For example, successful wineries can use kitting for a wide range of applications:
Sure, most products can be sold separately. But many products have greater marketability when they are seen as something bigger. Kits tend to stand out more, and when coupled with a good deal can be a powerful enticement to consumers.
Of course, the above ideas speak to why wineries, tasting rooms, and similar outfits should consider using kits. In small quantities it may be simple to do kits in house. But if you have large volumes, complexities around packaging, or need help sourcing companion items, you should call in experts. A good 3PL will know how to help you navigate the ins and outs of managing kitting activities. Here are a few things to consider when blending kitting in with other warehousing and logistics operations.
One last piece of advice: To get the most out of kitting, plan ahead in partnership with your 3PL.The more you can plan upstream, the smoother things will go. If you are thinking about getting kits together for the Christmas Holiday here in November, you are already too late! But there are plenty of opportunities around kitting, and it’s never too early or late to start the conversation.
If you are interested in how to use kitting to your advantage in advance of a special event, or as a general offering, contact us. Copper Peak has expertise in kitting and its potential applications for wine and food.
The nutraceuticals industry is growing rapidly these days; one study predicts that nutraceuticals will grow to be a $250bn market by 2018. And whereas many of the early players were smaller companies, nutraceuticals companies with over 500 employees and millions in revenue are no longer unusual.
This fast growth means that nutraceuticals companies are facing all sorts of new challenges, many of which have to do with scaling up their businesses. More..
One of the highlights of the 2015 Direct to Consumer Wine Symposium agenda was the user group focused on Millennial marketing. Over 100 industry professionals attended the discussion and learned how shifting demographics in the “Direct to Consumer” wine sales channel will have a major impact on current and future marketing activities.
In short, retiring Baby Boomers are shifting their spending habits and will be taking over $400B in eCommerce spending with them. Generation X and Millennials are the present and future of “Direct to Consumer” eCommerce, with an expectation that this group will spend over $600B annually. Building brand loyalty to Millennials is more challenging than doing so with their parents/boomers. The traditional approach to marketing is no longer captivating to a generation that is used to everything happening at the speed of wifi. Social media, mobile applications, value added services, and most importantly, telling the brand story are all front runners to engaging this group.
The Socially, Mobile, Millennials: Farming for the Future session, hosted by Copper Peak Logistics, brought together four wine-industry and marketing experts who gave a look into the next generation of wine consumers. Their knowledge and expertise in this field oered insight and actionable takeaways to help the attendees build brand loyalty with Millennials, suggestions on how to capture the growth of the DTC market among Millennials using social mobility, and tips on how to create added value without turning to discounts.
THE FREE ADVICE
Their expert advice and responses to questions posed by both audience members and moderator, Dave Dobrow, are chronicled here.
Napa, CA – December 1st, 2014 – Copper Peak Logistics (www.copperpeaklogistics.com), the trusted name in winery direct to consumer fulfillment, logistics and brand building services, announced today the addition of George Ross to the Sales and Marketing department in Napa. George will be joining the team as a Business Development Associate reporting to Dave Dobrow, Vice President of Business Development and Marketing. His responsibilities will include sales, account development, and various marketing initiatives. Ross comes to CPL from Bacchus Fulfillment (a division of Wine Shipping), where over a period of nine years he advanced to an Account Manager role, and was previously the Warehouse Manager at Napa Valley Packaging.
“We are really excited to have someone like George join the CPL team” said Milton Cornwell, General Manager of CPL. “George has accumulated a tremendous amount of experience in the wine industry, most of which has been focused on direct to consumer sales, building brand awareness, as well as developing relationships with existing clients and new prospects. As such, he is comfortable with our organization and we feel his skills and experiences will blend perfectly with the current and future sales and marketing directives of CPL.”
“I am excited and honored to be joining the CPL team,” Ross added. “CPL really promotes a family atmosphere where each individual’s efforts boost the company’s success, as well as making each person feel empowered and valued. This dynamic naturally extends to all of our customers, making them more than clients, but partners. I look forward to both contributing and benefitting from this great company, and all of the people involved.”
For more information, contact Milton Cornwell, General Manger of Copper Peak Logistics at (314) 692-9555 or firstname.lastname@example.org.
About Copper Peak Logistics:
CPL is an experienced third party logistics provider serving the American wine industry. CPL delivers a compelling suite of marketing, fulfillment, print, software and value added supply chain solutions for winery clients to grow their business in the direct sales channel and beyond. The combination of CPL’s services, people, and geographic footprint has created a compelling point of differentiation and helped build an impressive client base. CPL is a privately owned company and a member of the Materialogic Supply Chain Alliance, a strategic partnership of supply chain industry providers whose members collaborate to provide total solutions for their clients. For more information visit www.copperpeaklogistics.com and/orwww.materialogic.com.
Napa, CA – July 1st, 2014 – Copper Peak Logistics (www.copperpeaklogistics.com), the trusted name in winery direct to consumer fulfillment, logistics and brand building services, announced today the addition of Meghan Letters to the Client Services department in Napa. Meghan will be joining the team as an Account Manager reporting to Merilee Anderson, Director of Client Services. Her responsibilities will include client support, account development, and preserving the hands on service CPL is known to deliver to its customers. Letters comes to CPL from West Coast Wine Partners in Sonoma, where she helped rebrand the wine clubs for Valley of the Moon and Lake Sonoma wineries and she previously represented Oregon's Montinore Estate as Regional Sales Manager.
“We are very pleased to have Meghan join the CPL team” said Milton Cornwell, General Manager of CPL. “Meghan has held a variety of positions in the wine and craft beverage industry, most of which have been focused on direct to consumer sales, building brand awareness, as well as developing relationships and marketing activities for the wholesale and direct channels. As such, she is comfortable with ecommerce platforms, CRM applications, logistics, and social media marketing. We feel her skills and experiences blend perfectly with the foundation CPL has built in delivering industry leading solutions through best in class technology, operations and customer service.”
"CPL has the reputation, not only as a trusted partner for the wine industry, but as a savvy team of true logistics professionals," Letters added. "Their focus on building brands through progressive technology and creative logistic solutions is exciting and I look forward to working at their high standard of customer service. I have always admired their client centric approach and am honored to be joining the team."
Letters joins the Napa team this week and will begin assisting current winery clients in their direct to consumer fulfillment needs immediately.
For more information, contact Milton Cornwell, General Manger of Copper Peak Logistics at (314) 692-9555 or email@example.com.
About Copper Peak Logistics:
CPL is an experienced third party logistics provider serving the American wine industry. CPL delivers a compelling suite of marketing, fulfillment, print, software and value added supply chain solutions for winery clients to grow their business in the direct sales channel and beyond. The combination of CPL’s services, people, and geographic footprint has created a compelling point of differentiation and helped build an impressive client base. CPL is a privately owned company and a member of the Materialogic Supply Chain Alliance, a strategic partnership of supply chain industry providers whose members collaborate to provide total solutions for their clients. For more information visit www.copperpeaklogistics.com and/or www.materialogic.com.
COPPER PEAK LOGISTICS, Napa Valley’s premiere direct to consumer wine fulfillment and logistics company, is looking for an ACCOUNT MANAGER (AM) to join our growing team. This position reports to the Director of Client Services and will be based in our American Canyon headquarters. We are looking for a high energy, team oriented person that posses a strong desire and work ethic to be the best in the business. The ideal candidate will have wine industry experience and a demonstrated track record of providing superior client services and account management, along with flawless communication skills, a sense of urgency, and a consultative approach to drive value added thinking that helps Clients grow their brands.
Along with your résumé, please include a cover letter explaining your experience as it relates to this position and industry, and your compensation and benefit expectations. We WILL NOT review any resumes without ALL of the requested information.
The Account Manager (AM) will be responsible for managing and performing the support activities and tasks of designated Client fulfillment and distribution accounts, including daily oversight of order flows, inventory management, resolve sensitive Client issues thoroughly and timely, and assist in various company initiatives, such as the roll out of new products or solutions. In addition, the AM must be able to understand Client business objectives such that they can ultimately ensure that Clients are satisfied with the overall services provided by CPL.
• Develop a comprehensive working knowledge and understanding of all systems, processes, and methodologies utilized by CPL to provide services to Client accounts.
• Become proficient in the CopperLink, INFOplus, and Ship Complaint software systems used to support Client accounts.
• Provide daily oversight of direct to consumer (DTC) orders flowing from various web services portals, data bridges, and entered directly into CopperLink to ensure they are received by CPL for processing.
• Provide inventory management oversight, including consultation regarding transfers, receiving, low stocks, backorders, and storage.
• Coordinate shipping requirements with CPL Operation staff, and ensure Client expectations are internally communicated in a timely and accurate manner, and where conflicts may arise, assist in working with Clients to schedule workload.
• Support on-going reporting needs and respond to ad hoc Client reporting requests.
• Provide secondary back up support all CPL accounts as directed.
• Establish and maintain a complete understanding of direct to consumer wine shipping laws and regulations to ensure our Clients are compliant with current state and federal legislation.
• Conduct periodic account reviews to build Client relationships and insight.
• Conduct new account implementations and Client training on CopperLink.
• Assist in support for new business development by participating in sales calls, sales presentations, industry conferences, and demonstrations of software solutions.
• Develop a basic understanding of CPL pricing strategies and contractual requirements.
• 3-5 years client service experience in logistics directly related to customer service/client services order management and fulfillment.
• Strong knowledge of and passion for fine wines, previous experience in the wine industry preferred.
• Support our Clients through informative and clear communication, complete follow through and proactive problem solving.
• Must multi-task, be quick to respond, and demonstrate a high level of competency in the subject matter.
• Solid communication and interpersonal skills. Must have strong command of the English language both oral and written.
• Operate office equipment including computers and be proficient in Microsoft Word, Excel, as well as experience with UPS, FedEx, and GSO tracking and shipping management.
• Establish and maintain effective professional working relationships with all Clients and internal CPL employees.
• Be able to multitask, promote teamwork, and be willing to work in the trenches, when necessary, and help in any area.
• Four year degree in related field is preferred.
The majority of the time will be spent in an office environment with the possibility of assisting in the warehouse when needed. The warehouse environment is temperature controlled to be below 65 degrees. Working in the warehouse will require extended periods of standing and the possibility of lifting up to 50 lbs.
For consideration please sent application to Terri Grace