Retailers of every shape and size are hoping to cash in during this always-important holiday season. Among those hoping to end the year with a bang is the nation’s largest online wine distributor, for whom the holiday season is always crucial period.
“December typically makes up 30 percent of our total yearly sales,” said Wine.comCEO Rich Bergsund.
For the company, which saw revenue grow more than 25 percent in 2010 and a record 2 million bottles ship in the last 12 months, business is booming. But Bergsund says it could be better.
“In the last year we weren’t fully converting all our sales opportunities,” he says.
Bergsund realized they were leaving money on the table, or more accurately, on the mobile device.
“IPhones are 7 percent of our traffic and less than 1 percent of our revenue,” says Bergsund. “We knew consumers were going to the site looking for something, but not buying. The conversion rate just wasn’t there.”
The failure to turn browsers into buyers meant a loss in potential revenue, but it wasn’t just lost sales that were troublesome, it was the average amount of those lost sales. That’s because when it comes to wine sales, not all customers are created equal. Company data shows that consumers shopping on Apple products typically spend more than the average Wine.com customer.
Consider the iPad. According to Bergsund, the average Wine.com order is $150, but on the iPad the average order increases 50 percent to $225.
“The typical Apple consumer matches up well in the Wine.com demographic,” he says. “Fifty percent of Wine.com consumers earn over $130,000 per year, 32 percent over $180,000."
With Apple products currently making up about 80 percent of all mobile traffic to Wine.com, the company recently created their own mobile-specific website making it easier for consumers shopping on any mobile product, be it an iPad-, iPhone- or Android-powered device. The site allows customers easy access to Wine.com’s full catalog of wines and most importantly an express check-out system that makes mobile purchases easier to execute.
“We want to make the process hassle-free,” says Bergsund, who hopes the new site “will increase our mobile sales by 4 to 5 percent.”
While Wine.com’s upward trend is obviously good news for the company, Bergsund thinks positive trends about the economy as a whole can be seen via the wine choices his customers are making.
“The under $20 bottle category is slowing for us. It's not growing as much as the over $50 a bottle group,” he says.
The cost of the average bottle of wine sold is also increasing. In January 2008, the average bottle of wine sold on Wine.com was $25. That dipped to $22 in July 2009 before climbing its way to the current level of $27 per bottle last month.
Bergsund hopes the upward trend continues and will be watching closely to see how the forecasted gadget boom this holiday season will boost his company’s bottom line.
“Last year, the day after Christmas, 20 percent of all sales came from the iPad,” He says. “People were at home relaxing with their gifts. This year, and going forward, we’re going to be ready no matter what platform they are shopping on.”
Questions? Comments? Email us at consumernation@cnbc.com. Follow Tom Rotunno on Twitter @tomrotunno
