THE PRECARIOUS STATE OF WINE CLUB SOFTWARE

Help us, please!

Those words were the first thing I heard when interviewing winery owners and tasting room managers. Many are unhappy with their website or wine club software, and with the companies behind them. Great support is hard to find, and innovation has stagnated. Straight away, I knew there was a big problem that needed to be solved. 

Back up to the start of 2015. My team was (and still is) the digital agency of record for the Washington State Wine Commission. Our award-winning design for their new website woke up the industry a bit. Calls started coming in from wineries asking if we can help them with their websites. There was clearly a need and a business opportunity. The team decided to explore the idea and returned some calls.

The big question was always, "How much would a new website cost?" My default response at the time was, "$25k is where we start, and it goes up from there." At the time, the work was all custom, built-from-the-ground-up-and-just-for-you, which takes time and money. 

Of course, jaws dropped. One winery owner even laughed... hysterically... right in my face.

Our pricing didn't work for small wineries. Wanting to find a way to re-structure our fees, I went back through my early interview notes to study the problems and found a quote that changed our direction:

"We don't need a new website. It doesn't sell wine. Our social media channels work great for communicating general information. We need tools that help us target the right customers, and sell more wine to them." 

A professional website is an important part of the puzzle, but that alone wouldn't move the needle. The problem lived where deep in software behind the website. We took a hard look at the solutions wineries were using. Some serious problems were discovered.

Looking behind the curtain

Our team has been building software for over 20 years. I started working with Jeff Bezos at Amazon.com in 1995 on a new design for their book catalog and developed the creative direction for their very first online ads. It was an eye-opening experience. 

Since then my team has designed and built countless ecommerce stores, websites, mobile apps, and fully-custom business systems. Through years of experience, I can promise you that developing and maintaining complex software that includes solid ecommerce features, which your customers love, is almost impossible for a small company with a small team.

Why impossible? Here are the 20 core features of a full-stack solution for wineries:

  1. Website builder
  2. Content management system
  3. Shopping cart and store checkout
  4. Product manager
  5. Inventory manager
  6. Customer manager (CRM)
  7. Order manager (OMS)
  8. Discounts and loyalty programs
  9. Fully integrated Point of Sale (POS)
  10. Wine sales and tax reporting
  11. Wine club manager
  12. Membership and saved payments
  13. Batch order/shipment manager
  14. Shipping rates and carrier integrations
  15. Order fulfillment and shipping management
  16. Marketing email manager
  17. Blog articles and events
  18. Club sign-up and tasting room kiosks
  19. Analytics and machine learning
  20. Integrations for tax calculations, accounting, and compliance

 

Pick one of these features and think about its complexities. Then consider what it might take to design, build and support that single feature in a way that makes every customer happy. Think MailChimp for email marketing, which is a great example of well-done software that users love. 

There are roughly 15 companies that offer a full-stack solution for wineries. See Paul Mabray's DTC Vendor Prism for an excellent overview. Only a handful have attempted to offer all of the core features listed above. If you're currently using the software offered by one of those companies, ask yourself, "Are the email marketing features as good as MailChimp?" Nope. MailChimp has over 800 employees and sends over 1 Billion emails a day. Your software provider doesn't have the resources to even come close. 

Now ask yourself the same question for each of these 20 core features. You might think of Wordpress for blogs, Wix for website building, Lightspeed POS, or Magento (now owned by Adobe) for cart and checkout. These top-tier solutions are large companies, with sizable, specialized teams.

So how are DtC software providers doing it? What is happening behind the curtain is not a pretty sight.

Many of the larger DtC software providers (we call them "legacy solution providers") have been in business for over a decade and have sizeable client lists. Some boast they service over 1000 customers. This is great for credibility, but a large percentage of these customers aren't happy. We know because we've talked to a lot of them. Here are some common complaints that we hear:

  1. The customer service is poor
  2. Features are buggy and seem to be getting worse
  3. The solutions feel old and out-of-date
  4. There is very little innovation or future-thinking
  5. Important features are missing
  6. System components aren't fully integrated
  7. Websites aren't performing, and are poorly designed

 

Unlike a fine wine, software gets worse with age. The legacy solution providers are sitting on old, proprietary code, which becomes increasingly hard to maintain. As time goes by, it becomes even more difficult to replace the software. Add to that, unhappy customers are demanding fixes. Software developers can't focus on innovation or new features because they are patching holes. Word starts to spread and their reputation begins to dissolve. This can put a company into a tailspin that is hard to pull out of. 

Our team understands this situation well. We've been there before.  

Today, most legacy solutions are a single, centralized system that uses closed-source, or proprietary technology. Wineries are forced to use only the features provided by that system. Since the code is mostly proprietary, wineries are stuck waiting for the solution provider to make updates. To make it worse, many legacy providers don't offer a website, POS, loyalty programs, or event management as part of their offering, forcing the winery to use other, external solutions that aren't properly integrated. This is a messy mix of multiple, centralized systems cobbled together. This attempt to provide all of the full-stack features expected by today's modern winery is clearly not working. 

What is the solution?

DtC solution providers need to decentralize their software and embrace open-source technology. Get as far away from closed, proprietary systems as possible. 

If you follow technology trends, you already know about dapps or decentralized applications that use blockchain technology. This article isn't about dapps. Although, solution providers need to start planning, and rethinking how blockchain, smart contracts, and tokenization will be used in the future. Until this happens, we can't call our solutions truly decentralized. 

That said, solution providers can move in that direction by using existing, open technologies and services, forming a fully integrated solution. Wineries should have the ability to self-select the features they need for their business. Designing solutions with this in mind allows providers to adapt, innovate, and one day begin using or even developing their own dapps. 

Let's consider what that might look like today.

Wineries need a platform that will provide the core ecommerce features. The payment gateways will use PCI compliant (tokenized) transactions. This is the only option for saving/using credit cards for club members. In addition, alternative payment methods, like ApplePay and BitCoin should be available.

Wineries require an easy-to-use website and blog manager, allowing pages to be added and content maintained. Sites should be fully integrated with the ecommerce platform, wine club, email marketing, events, and loyalty programs.

For integration and future extensibility, the entire system will need to be backed by robust APIs (application programming interfaces). Sorry, I got a bit technical. All you need to understand is that APIs provide the means for different systems to talk to each other is a fast, secure way. 

At Bloom, we found Shopify was the clear answer to provide most of what we were looking for. There are other options, like Wordpress and Woocommerce. Or Squarespace who has started to build out a decent ecommerce solution. For us, they weren't quite ready for prime-time.

There are 13 core, full-stack features that Shopify provides for us: 

  1. Website builder
  2. Content management system
  3. Shopping cart and store checkout
  4. Product manager
  5. Inventory manager
  6. Customer manager (CRM)
  7. Order manager (OMS)
  8. Discounts and loyalty programs
  9. Fully integrated Point of Sale (POS)
  10. Shipping rates and carrier integrations
  11. Order fulfillment and shipping management
  12. Blog articles and events
  13. Analytics and machine learning

 

Shopify provides Bloom a competitive advantage—now and as we evolve. These 13 core features will advance as Shopify grows. App developers will build new extensions to fill in potential gaps. A large software development team isn't needed to provide a competitive solution.

There are still 7 core features that Shopify doesn't provide: 

  1. Wine sales and tax reporting
  2. Wine club manager
  3. Membership and saved payments
  4. Batch order/shipment manager
  5. Marketing email manager
  6. Club sign-up and tasting room kiosks
  7. Integrations for taxes, accounting, and compliance

 

When you examine this short list, they are all winery-specific features except for the marketing email manager. Bloom and Shopify have both built a very robust integration with MailChimp using their top-notch API. Our developers are focused solely on these wine-specific features, massively reducing scope and our codebase. Translation: more time to focus on innovation, less time spent supporting core features. 

There is a downside to a decentralized model. It removes the ability to have control over the entire system. Apple decided, early on, to have total control over their hardware and software. But Apple is a huge, international company with the resources to follow this business model. I'll say again, DtC solution providers do not have this luxury. 

Decentralization means you rely on third-parties for much of your functionality and APIs. If Shopify shut off their Orders API, we'd lose the ability to create orders programmatically for club shipments. In addition, third-parties might not have every feature you need. For instance, Shopify doesn't provide the ability to save card data for security reasons. Bloom has built our own solution to address this. 

When these limitations are embraced, it forces us to design our software in a generic, extensible manner. Do you want to use a different platform for the core ecommerce features? The platform should provide for that. Want to use Stripe instead of Authorize.net for payments? A simple configuration change should do the trick. Need a loyalty program? Take 90 seconds to install and configure a plug-in and you're up and running with a new fully-integrated feature. 

The truth is, a great DtC software option is hard to find if you're looking at the legacy solution providers. The complexities of full-stack solutions are overwhelming. The scale isn't manageable by small teams. Cobbled together, centralized solutions aren't working. Until the industry accepts the fact that decentralization is where software is headed and starts to use existing best-of-breed integrations, the options will continue to be limited.