Case study: taking ownership from grape to box

Lots of wine subscription boxes offer curated bottles based on customer tastes – so Winc decided to take the whole process into their own hands.
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Launched as Club W in 2011, Winc set out to create a wine subscription model that caters to a broad audience, bringing curation and personalisation to the industry. At the time, it was pairing customers and wines through a palate profile quiz and recommendation engine. Trouble was, it wasn't the only one, with a host of other wine clubs run by sommeliers and two other startups employing similar style algorithms.

In 2015, therefore, it pivoted to fully proprietary wines; bringing on a director of winemaking, Ryan Zotovich, and seven vintners. ‘As a company passionate about wine and winemaking, the decision to become our own winemakers was a natural pull to get closer and closer to the source,’ explains co-founder and COO Brian Smith. In 2016, the subscription company rebranded to Winc to reflect its new approach.

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Winc has now evolved to own every part of the process: from production to branding and distribution. It still works closely with its customers to create wines they will like, and this direct connection to the customer base means the company is uniquely positioned to experiment with the types of wine it produces. ‘Our digital-first platform and subscription model provides us with a unique ability to launch, test, and iterate projects with our customers at an unrivalled pace,’ outlines Smith; it’s a customer- driven approach that’s led to revenues increasing by 333% in the last four years. Crucially, it enables its team to retrieve immediate feedback from its customers, in the process allowing them to be both more responsive and innovative in their winemaking.

Winc now runs a diverse portfolio of consumer-led brands, and has produced some 664 wines from 78 grape varieties sourced from 97 regions across 12 different countries. There have been sell-out runs and 1000-long waiting lists for seasonal releases. ‘I’m constantly impressed by how open our members are to trying new things. For example, one of our projects is an obscure orange wine called Au Dela,’ says Smith. ‘We sold out of the wine in just two months after launch, underscoring the strong level of trust we’ve established with our consumers’.

Subscription boxes: a model for success?

Since erupting in the early 2010s, thousands of companies have climbed on the sub box bandwagon. So what's it all about – and is it a viable business model? Books, meal kits, contact lenses, pet food, vitamins, mushroom cultures, hot sauces, pagan workshop supplies – there isn’t much that can’t arrive in the post as part of a regular subscription. An in-depth report from McKinsey last year estimated the subscription box market to be valued at around $10bn, with 15% of online shoppers having signed up for some kind of box delivered straight to their door.

A couple of years ago, it felt like the subscription box market was destined to continue growing until the idea of actually stepping foot in a store became a distant and strange memory. But common sense dictates that there are only so many boxes consumers want piling up on their doormat, and talk is rife of a saturated market. Companies are finding that, whilst it’s relatively straightforward to attract new customers to sign up for their subscriptions, it’s just as easy for them to cancel a few months later.

The three main types of sub boxes

1. Replenishment

Allows customers to automate the purchase of commodity, everyday items so that they never run out. Here value for money and convenience are the key motives for signing up. (See: Dollar Shave Club)

2. Curation

Sends customers new or highly personalised items they haven’t chosen themselves, and is therefore all about the wow factor. Prominent in clothing, beauty and food, customers expect these to become more tailored over time. (See: Birchbox)

3. Access

Typically involves a monthly fee that allows customers to get lower prices or members-only perks. Usually seen in food and apparel, exclusivity is the main attraction. (See: Thrive Market)

This article was first published in Courier Issue 31, October/November 2019. To purchase the issue or become a subscriber, head to our webshop.

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