Wine Industry 2020 Email Benchmark Report

January 2021Presented by WineGlass Marketing

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Introduction Each December, WineGlass Marketing releases email benchmarks for the wine industry. We do this because having a bar to evaluate email performance has always been a challenge within the wine ecosystem.

Benchmarks are widely available for broad categories such as “Retail” or “Food and Grocery,” but finding a comparison to a Wine Club email is historically as accurate as predicting what would happen next in 2020.

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2020 will forever have an asterisk next to it, noting numerous external forces outside of our control which affected our marketing and response rates. When looking at the calendar, there are many force majeure events worth noticing that likely prevented our customers from responding typically:

• We had an initial Shelter-in-Place order closing tasting rooms and restaurants in mid-March. The government asked us to work at home and limit our time outside, so eCommerce delivery options filled the void. Our media consumption changed as we searched for connections, and we became glued to CNN and obsessed with Facebook, YouTube, and TikTok. Business suffered, and by the end of Spring, our unemployment rate was in the double digits.

• Tensions rose with the temperatures as several racial injustices made headline news culminating in the death of George Floyd on May 25. This horrible tragedy unleashed weeks of riots and demonstrations throughout the summer months. Some states relaxed their grip on the Shelter-In-Place orders, albeit cautiously, which resulted in a flurry of

changing guidelines. Forced to interpret the rules, wineries tried to convince customers to visit again.

• And then came the fires. Not one but two waves in August and September devastated Western states, including California. The fires destroyed a few wineries but caused extensive smoke taint damage to the 2020 vintage for a larger group. The media descended, and reporters were everywhere convincing consumers to stay away from a Northern California that was in flames, leaving wineries the practical duty of reporting the actual impact to their customers.

• The fire of different views on how to handle the virus and inequality in our country was fanned brighter in the Fall with a very contentious national election. September and October saw media ads and email boxes jammed packed, so there was very little else on anyone’s mind.

• Finally, in Q4, there was no letting up with another wave of Coronavirus underway with several states considering going back to strict stay-at-home guidelines. Some expect

THE YEAR IN REVIEW

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the most significant online holiday shopping season yet, but since the data in this analysis ends on 9/30/2020, this prophecy will have to wait till next year’s report.

Throughout all of 2020, our customers have endured. They have accepted their club ship-ments and opened our emails, and God bless them, they have ordered wine.

A lot of wine, actually. Early in the year, Wine Intelligence reported initial growth in wine consumption frequency due to the shift to at-home occasions more than compensated for the loss of on-premise occasions. Thus, making our emails more critical than ever.

Wine consumption during the Shelter-in-Place order increased to almost 10 times a month or every 3 days.

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However, did this increase carry over to email results? Hubspot says no. The marketing jugger-naut released a report at the end of October 2020 asserting that after initial explosions of emails and subsequent consumer mass consumption, the responses to emails, and sales, are dwindling.

With the outrageous context of 2020 in mind, we widened our scope for this year’s

benchmarks and leaned into the data.

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The Results We pulled statistics for the past year on 222 wineries with over 9,000 campaigns and just shy of 46 million individual emails. What we found was interesting...

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The average number of campaigns sent per winery in our 2017-2019 report was 1.88 per month, equating to a little less than 23 emails a year or a frequency of one email every 2-3 weeks for sales, events, or wine club communications.

The average number of campaigns sent per winery in 2020 is double this at 3.63 per month, which means that on average, we sent one email a week to communicate with our customers this year. It seems that we followed suit with other industries who jumped on email as the logical replacement for in-person customer care, sales, and support.

And why not? Email is relatively inexpensive, and it does not require staff to be present in the office or consumers to be in a particular location either. It is, actually, the perfect COVID market-ing platform.

However, were customers amenable to this increase?

Initially, we look to Open Rates to gauge if customers are receptive to our messages. An open rate is how many people, expressed as a percentage, opened an email and is largely a factor of three things:

• The sending address or who the email is from• The subject line• The teaser text that appears in browsers to

provide a summary of the email

However, environmental factors that contend for attention can trump all of these rules. The data exposes that after an initial spike in March during the original COVID Shelter-In-Place orders, there has been a steady decline in Open Rates in 2020. Moreover, although this study ended on 9/30/2020 - we can also assume we will experience lower rates in November and December with the election and the standard holiday email burnout.

WE SENT MORE EMAILS

OPEN RATES FELL

The number of email campaigns doubled from the reporting of 2017 - 2019 to this study of 2019 - 2020 indicating a heightened reliance on this communication channel.

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Bounces fall into two classes. A Soft Bounce is when the receiving server recognizes the email recipient, but the address is blocked at the moment: such as an out of the office response. A Hard Bounce means the address is no longer on the server.

With office closures and unemployment hitting the double digits mid-year, we can confidently assume that many email addresses changed in 2020.This hypothesis played out in the data as we saw Bounce Rates jump by 20% from pre-COVID to post-COVID months.

BOUNCE RATES INCREASED

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The Click-Through Rate is how many people click on an email, expressed as a percentage, and mostly depends on how compelling the email is. What is considered compelling is mostly subjective but includes the offer itself, the copywriting, and the presentation, such as an image, text, or a button.

The exciting thing about the Click-Through Rate is its independence of other metrics – such as Open Rate or frequency. Click-Through Rates are an accurate indication of a customers’ interest in the message.

The closure of thousands of wineries and restaurants forced customers to look to other channels for their wine needs. The most obvious of these channels is emails directing sales to eCommerce. Therefore, consumer attention and consumption of email messages swelled in March, and Click-Through Rates stayed high through the Summer. But then we see the exhaustion and distraction set in the Fall, and we fall below previous years. When we pull data next year, we hope to see a Q4 spike in 2020, resulting in strong eCommerce sales for everyone.

CLICK-THROUGH RATES SKYROCKET... AT FIRST

But as we all know, while the exterior environment is an essential predictor of

results, it isn’t the only one.

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Detailed Results Let’s look at some other factors and benchmarks at play in 2020.

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When we look at industry yardsticks, the internet provides vast categories. Mailchimp publishes its benchmarks each year and offers us a very unhelpful and unclear “retail” category. This annual whitepaper’s genesis was to provide wineries with a more accurate goal to shoot for with the hypothesis that hobby or passion interests (like wine) will garner better results than something less interesting, like a sale on pillowcases or socks. We can see that this hypothesis is correct. Once again, winery-specific metric kicked some Mailchimp retail category booty. However, the issues of this past year are apparent. Mailchimp reports a 5% decrease in open rates from 2019-2020, and we’re showing a 9% decrease. Mailchimp also said that average Click-Through Rate increased by .4%, yet our assemblage of wineries showed an aggregate loss of 15% in Click-Through Rate year over year.

The data suggests that we can use the same hypothesis in reverse: That wine is complex and engenders passion and interest, so it per-forms differently than everyday retail goods like clothing and cosmetics.

But, this year, it wasn’t in our favor. We know consumers hold off on purchasing luxury products (like wine) in place of necessities during economic downturns. We also know that small splurges, like a new lipstick or a new zoom-worthy shirt, will be deemed reasonable versus a larger luxury purchase of $100 or more. But we’re still curious about the more considerable investment, which explains why Open Rates are impacted less than Click-Through Rates.

OVERALL INDUSTRY VS GENERIC BENCHMARKS

Wine Industry emails typically perform better than average eCommerce or retail emails.

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The average subject line for the 9,660 campaigns in the 2019-2020 study was 45 characters. In last year’s study (2017 – 2019), it was 42 characters. Campaign Monitor published that 41 characters or shorter were ideal, and emails with subject lines below 16 characters boasted “significantly higher” open rates (they weren’t specific).

Our data is specific. We bucketed emails into four buckets. If the subject line has 1-25 characters, we note it as a “Low” subject line character count. “Medium” emails have subject lines with 26-50 characters, “High” with 51-75 characters, and “Very High” are emails with subject lines of 75 or more characters.

Our data points concur with Campaign Monitor. We see that email subject lines with fewer characters perform 20% better than those with more characters. The “Very High” group does pop back up, but this was only 4% of all emails sent and almost exclusively administrative updates for Club shipments and tasting room hours. So, take that information with a healthy understanding that 2020 was, ahem, unusual.

When composing subject lines for your emails, shorter is better most of the time. Try to keep it under 25 characters for best results.

SUBJECT LINES

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You’re thinking: “But, what if I have a lot of information to convey?”

It appears our customers tolerate more extended introductions in certain situations. For the second year in a row, the data shows customers appreciate more details in the subject line of event emails and newsletters. For other communications, keep it succinct for optimal performance.

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We broadened our scope this year to include other factors in addition to length that influence the effectiveness of subject lines. We couldn’t help noticing that last year we hardly saw any emojis (about .9% of you included them). But this year, 4.43% of all subject lines (or over 400 campaigns) came augmented with little pictures.

Of those email subject lines with emojis, 73% employed one, and 27% sprinkled the subject line with more than one. We found no correla-tion between the number used and performance, so while it doesn’t hurt to go crazy with multiple icons, it doesn’t really help, either.

The favorite emoji? The wine glass was used in 50.36% of all subject lines with emojis, followed by a heart (in various colors) which was used 6.11% of the time.

Another pronounced change in this year’s study was the increase in exclamation points! Everyone was very enthusiastic!! We used them a lot!!! 48% of all emails in this study had an exclamation point in the subject line. Many

!had several. This overt appearance of exclamation points caused us to look back at our previous report to find only 19% of last year’s subject lines were animated enough to include our tallest and most flamboyant punctuation. Perhaps this emphasis telegraphed our anxiety in 2020, and our plead for customers to buy online with the tasting rooms closed. Interestingly, for those in love with miniature portrayals of red wine glasses and Christmas trees, your savvy knowledge of texting culture paid off. You can see in this chart, the line shows the average Open Rate of 24.66%. When we compare the Open Rates for emails with subject lines that contain an emoji, we see a 6% boost in open rates to 26.18%, indicating that seeing pictures might inspire a few additional people to open your message.

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As with most things, however, saying the same thing louder does not do the trick. Customers opened emails with exclamations points less than average, but more importantly, customers opened emails without exclamation points more than average. This difference could also be a delivery issue as many business spam filters now remove emails with exclamation points.

We combined our Low and Medium count subject lines into a group re-named “less than 50 characters” and merge the “High” and “Very High” subject line lengths into a new group called “more than 50 characters”. With this unification, we can clearly see that brevity also gets more attention.

For best results, our benchmarks indicate that an emoji or two helps but an exclamation point or a high character count hinders Open Rates.

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We do not know the exact segmentation or targeting for each of the 9,660 campaigns, but we can look at the content and put them into logical buckets. In doing so, we determined 55% of all emails were asking for a sale in some fashion. We include allocations, new releases, and recipes or scores highlighting a wine and offering it for sale in this group. If it had a click to get the wine, we said it was eCommerce focused.

Event emails occupied 15% of our email space, which is more than previous years but makes sense with all the confusion in 2020. Note that we added a new category called “tasting rooms,” which was just information about opening, closures, and fire status. These took up 10% of our inboxes.

Club emails were the next most frequent communications, and these included all administrative information about shipments.

EFFECT OF CONTENT ON EMAIL PERFORMANCE

13% of emails sent are club related and mostly administrative: That’s a lot! It would likely be worth your time to design these emails the best they can be and include some upsell or cross-sell messaging.

Newsletters, with 6%, appear to be falling out of favor as we transition to frequently sent bite-sized exchanges.

There were 1% of emails that didn’t seem to fit in any group. They were recipes, photo contests or surveys that did not have a strong call to action. It seemed the customers were confused about their purpose as well since the Open and Click-Through Rates were the weakest of all groups.

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What is interesting is the extensive range of response rates based on content. Although a small percentage of the total emails sent, Club emails have the highest Open and Click-Through Rate, followed by newsletters. The eCommerce group boasts the highest number of emails but delivered a weak open rate and one of the lower clicks through rates.

Although this data is harmonic with last year’s analysis, the context of 2020 cannot be ignored. Wineries weren’t the only industry to turn to email. Many retail messages competing in our customer’s in-boxes offered steep discounts and complimentary shipping that wineries simply could not match dampening overall 2020 results.

This is one of the many statistics which indicate sending more frequently doesn’t

translate to higher sales.

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As we mentioned in the introduction, the logical shift in focus to eCommerce gave rise to an escalated cadence in our communication patterns. In last year’s report, we saw most wineries sending emails every two to four weeks, whereas in this year’s study, 81% sent emails every week. This shift is one of the most extensive data changes from year to year and a phenome-non that should not surprise anyone. In actuality, the virus brought wine industry email frequency closer to par with other eCommerce verticals that send emails daily with generally positive results.

But what about the effect on performance? We can see that Open Rate on the surface appears to do best at every six months. Upon further diagnosis, wineries who sent less frequently were mostly small family wineries with an average list size around 2,000. These smaller wineries tend to send more personal customer-centric messages, accounting for the higher Open Rates. For the rest of us, the sweet spot is every two weeks. Weekly and monthly performance mirror each other indicating that every week may be too much information and once a month is too long in between touchpoints. Indeed, the longer a customer continues to not hear from you, the more likely they are to unsubscribe when receiving a communication.

THE IMPACT OF FREQUENCY ON EMAIL RESPONSE

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The day of the week is always a much-debated topic. Email lore says mid-week mornings are best. In truth, most of our emails are sent Tuesday – Friday with a higher volume on Tuesday and Wednesday. But as per last year’s report, Thursday is the strong sleeper performer reporting an average Open Rate just a quarter of a percent lower than Tuesday and an equal Click-Through Rate as Tuesday.

The surprise is the dip in performance mid-week, where Email Opens drop almost 4%, and CTR loses half a percentage point. For best performance, it appears a send on Tuesday or Thursdays is still best practice.

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46% of all the campaigns in this year’s study reported sales in correlation with the list and response data. When compared to last year’s results, we see the top-level trends continued down the purchase funnel.

Our average conversion to sales dropped from .48% last year to .17% this year. We can be saddened about the dip from last year or rejoice that wine is still a coveted product. Klaviyo.com updated their benchmarks for their 18,000 customers and noted the average conversation rate is still .09%, so the wine industry is roughly twice the general average. It isn’t all bad news.

The average revenue per campaign sank from last year’s $7,446.56, and the Average Order Value took a 24% dip from last year’s value. But on the positive side, our 2020 orders per campaign are up by 23% to almost ten orders per effort.

WHAT ABOUT SALES?

All sales metrics decreased in 2020 except the average number of orders per campaign increase. This indicates that people purchased lower priced items more frequently than years passed, which should surprises no one.

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Looking at the days of the week, the sales roughly followed the trend in email Open and Click stats indicating that people are mostly likely to place an order on a Tuesday. However, there is significant data showing that while we Open and Click on emails mid-week, many of us hold out until Friday to make the actual sale.

The Winner is…TUESDAY

% of Sends: 26.4%Average Open Rate: 26.4%Average Click-Through Rate: 5.31%% of Sales: 20.08%

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Summary Here are your winery benchmarks for 2020 and how we suggest using this data to move forward with your marketing in 2021.

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Why does WineGlass Marketing share this data? Because we all need benchmarks to improve. Analytics isn’t about massive analysis and large-scale pivoting. You can benefit from real gains with small changes and frequent review of your own benchmarks. It can be as simple as watching what works and doing more of that (or con-versely, stop doing what doesn’t work.)

KNOW YOUR NUMBERS

There are many tips in this report regarding subject lines, frequency, and send times. Take this free information and make the most of it to plan your communications. Keep your subject lines short, have fun with emojis, don’t yell, send emails about every two weeks and on Tuesdays or Thursdays, and you’ll be halfway there.

FOLLOW BEST PRACTICES IN THIS REPORT

This report doesn’t include several things you should do: Good content, design for mobility, white space around buttons, and strong call-to-actions are just some best practices to help your results. These items are the other half of the equation and are just as crucial as this report’s suggestions.

FOLLOW BEST PRACTICES, NOT IN THIS REPORT

Email is not a substitute for tasting rooms. Tasting rooms are valuable because they are a first point of connection with potential buyers where your brands and wines are introduced. Email will never be able do that. The role of email is to keep in contact with prospects and customers you already have, and prospects decay quickly. So it is critical that you continually add to your list: Don’t forgo adding to your mailing list because your winery is closed to tourists.

DON’T FORGET TO ADD TO YOUR MAILING LIST

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We are now competing in the online retail space. The game has changed, and the pressure is on. Why order wine from the winery when you can order a bottle from Instacart to be delivered in an hour? It is important to recognize the new set of rules and strategize how to keep competitive in the digital landscape.

2020 offered some exhilarating moments all fueled by adrenaline that drove consumption, interest and response. But virtual tastings and clever shipping offers aren’t new anymore. In 2021 we’re now faced with a marathon where endurance prevails. Strategy, messaging and planning is needed versus a quick-pivot reaction. The wineries that recognize the new landscape and competitive set of broader retailers and embrace integrated online marketing with a blueprint for all phases of the customer journey will emerge the winners.

Customer Acquisition• Website design & maintenance• Advertising (traditional & digital)• Search Engine Optimization• Search Engine Marketing• Social Media marketing

Sales Strategy• Email design & deployment• Database segmentation & hygiene• Content creation & delivery• Competitive & customer research• Partnership & influencer programs

Loyalty Marketing• Trade tools & assets• Strategic decks & market plans• Wine Club analytics & planning• Customer service & support• Technology & tools implementations

Service Offerings:

Interested? View some samples of our work, check our website or dop us a line.

PHONE 707-927-3334 EMAIL service@wineglassmarketing.com WEBSITE www.wineglassmarketing.com

The premier direct marketing agency in the adult beverage industy.