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Making the most of a cellar door in a COVID-19 world

By Justin Cohen, Senior Marketing Scientist, Ehrenberg-Bass Institute for Marketing Science, University of South Australia

Government restrictions on business operators introduced to curb the spread of COVID-19 have upended advice to grow cellar door sales by increasing visitor numbers — that’s if such restrictions allow them to stay open at all. Justin offers his thoughts on how owners of cellar doors might make the best of a less than ideal situation.

In a prior issue of this journal, Peter Bailey reported on the 2019 Wine Australia Cellar Door and Direct-to-Consumer (DtC) Survey stating that cellar doors accounted for just over half of all DtC revenue, an increase on the year before (Bailey 2020a). COVID-19 lockdowns and restrictions put in place over the last 18 months have had an impact on this growing channel. Wine businesses in Australia have been consumed by the disruption of COVID-19 and great effort has been made by many to ameliorate its impact with some even bravely trying to turn this disruption into an opportunity.

At the start of the pandemic, research in the wine industry mainly focussed on how consumption patterns were changing and how this might affect channel patronage. Bailey (2020b) commented that the impact of COVID-19 was larger on wine brands with an on-premise focus while the commercial level of the industry was doing well in retail. Research by Lockshin et. al. (2020) explored how the beginning of isolation in Australia impacted the occasions that people consumed wine, particularly special occasions, which was corroborated by Bailey (2020b) documenting the decline of Champagne sales. Lockshin et. al. (2020) further showed that the usage of online channels was not as significant as one would imagine. Not surprisingly, cellar door sales were severely impacted.

Early in Australia’s battle with COVID-19, cellar doors and other non-essential businesses were closed until management plans were in place due to the chance of cellar doors and hospitality venues creating super spreader events. Whilst cellar doors were closed, there was a buzz about what wine brands could do to engage with their customers virtually. We saw a rise in tasting events via Zoom and other creative ideas to try and interact with wine buyers using social media. Taylor (2020) even commented that some wine brands were transforming their cellar doors to operate like bottle shops to continue to trade within their local communities.

By May of last year, Australian Grape & Wine and other industry bodies were supporting the industry by publishing safety protocols and guidelines for cellar doors to help them reopen and adhere to the strict public health orders in place. Cellar doors quickly adapted. However, this resulted in reductions in the number of visitors a cellar door could accommodate due to these requirements.

For readers familiar with my prior articles in this journal, the Ehrenberg-Bass Institute’s framework for growth is underpinned by increasing the size of your customer base (Sharp 2010). Two pillars that brands need to invest in to achieve this are building mental and physical availability (Romaniuk and Sharp 2016). Before COVID-19, my advice to grow your cellar door business would be to implement a strategy that increases your number of visitors. I would have made the point that growth is a numbers game and that strategies based on loyalty and only reaching your heaviest buyers won’t help you grow. In the best of circumstances, COVID-19 management plans in states that are not under lockdown restrict our ability to go for numbers. There are capacity management issues to consider as cellar doors execute plans to build their brand and achieve sales with restrictions that impact the volume of customers they can service. In a more challenging COVID-19 landscape, wineries have to navigate through lockdowns which create an even more austere business environment.

COVID-19 has resulted in a challenge for cellars doors to build and maintain their mental availability. Life has been upended for such a significant amount of time that many people who might visit cellar doors may not recall a wine region visit as an option when thinking of an occasion that would lead to a cellar door excursion. You need to make it easy for potential cellar door visitors to think of you. There are many Australians with discretionary income that would normally be spent on overseas holidays. There is a clear opportunity to welcome these people to our wine regions. State and regional tourism bodies are doing their best to promote domestic tourism through campaigns using a range of media channels. This support is most welcome, but the businesses that this advertising supports must hold these campaigns accountable and make sure there is strong branding that prominently displays distinctive assets for that region (Romaniuk 2018).

Whilst most of the advertising for our domestic tourism sector is visually stunning, we need to advocate the inclusion of cellar doors and winery scenes. The names of the regions need be presented visually in the communications and, wherever possible, verbally mentioned as well. Wine brands must also do what they can to encourage cellar door visitation. They need to reach out to their databases and post to their followers on social channels to encourage visitation. With a well-crafted and personal cellar door experience, you can aim to achieve higher sales from visitors and build memory structures that will pay dividends in future wine buying scenarios. Wine brands living in lockdown that have a direct-to-consumer capability need to work at reaching their databases with engaging content that offers a wine experience that can alleviate some of the stress of lockdown for them or as gifting opportunities. Whether your wine business is open under a COVID-19 management plan or closed due to a lockdown, you need to work beyond just contacting your database and invest in paid social.

Wine brands operating in lockdown need to work on their digital physical availability. Review direct-to-consumer protocols and optimise the user experience to facilitate transactions. For wine regions that are allowed to be open, effort must be made to increase cellar door physical availability by making it easier for a customer to find and buy you. A cellar door needs to see this as an opportunity to remove as many of the barriers to visitation and purchase as possible that have been created by COVID-19 management plans. Communicate clearly to all potential visitors how to find you. It is likely for many visitors it has been quite some time, if ever, that they have been to your region. Work towards making the reservation process, if required, for cellar door visits seamless and have as few steps as possible whilst capturing all relevant contact data for COVID-19 safety reasons. During the visit, carefully explain that you would still like to acquire visitors’ contact details a second time for the purpose of communicating with them in the future about your brand and encourage them to follow your socials. Make it clear you are not mining the COVID-19 registration details. You will be producing significant signage and decals for the cellar door to implement COVID-19 safety protocols. Follow the approach I outlined in a prior article in the Spring 2020 issue of this journal. Use each one of these signs as a branding opportunity and harness the power of your potential distinctive assets (Cohen 2020). Consider investing in branded face masks for your staff and make these available for visitors as well.

Due to the restricted numbers of cellar door visitors, you have an opportunity to curate a more meaningful experience. Orientate your tasting around consumption occasions that are more common and relevant. Be circumspect about which consumption occasions would be most impacted by lockdowns and restrictions on everyday life and build linkages between your brand and those likely to not be impacted. If you can’t make a sale on the day, you will have a better chance of getting purchased when a visitor is in a purchase scenario on another.

Another key point to make is don’t hide behind restrictions with walk-in visitors that you can’t accommodate. It is easy to blame the government or the visitor themselves for not knowing how to plan their visit. Use each failure to provide a cellar door experience as an opportunity for service recovery. Cellar doors should have well branded materials to share with walk-ins that cannot be currently accommodated that can encourage them to wait for an opportunity later in the day. If they really can’t be served, you may consider presenting a small but well-branded token of appreciation for them attempting to visit and have information on how they can book another day and where the brand can be purchased or consumed at other hospitality venues in the region during their visit.

Australians have spent a considerable amount of time with their lives on hold. They are looking for enjoyment and experiences. Cellar doors are perfectly positioned to achieve this in those regions that are open. Advancements in technology have made it possible for businesses in lockdown to attempt to achieve this in a digital world. The wine industry always finds a way to persevere in difficult situations. As we work on getting our community vaccinated and transition away from lockdowns and restrictions, this article can provide some ideas to help your brand manage in these challenging times.

References

Bailey, P. (2020a) Survey reveals growing importance of cellar door sales to the revenue of Australia’s wine businesses. Wine & Viticulture Journal 35(1):67-68.

Bailey, P. (2020b) The impact of COVID-19 on domestic wine sales…the story so far. Wine & Viticulture Journal 35(3):67.

Cohen, J., (2020) Change isn’t always a good thing: Using distinctive assets to improve marketing strategy. Wine & Viticulture Journal 35(4):62-63.

Lockshin, L.; Corsi, A. and Bruwer, J. (2020) How wine and alcohol purchasing and consumption changed during COVID-19 isolation in Australia. Grapegrower & Winemaker 680:112-115.

Romaniuk, J. and Sharp, B. (2016) How brands grow: Part 2. Melbourne, Oxford University Press.

Romaniuk, J. (2018) Building Distinctive Brand Assets. Melbourne, Oxford University Press.

Sharp, B. (2010) How brands grow. Melbourne, Oxford University Press.

Taylor, D. (2020) Australian wineries adapt to COVID-19 restrictions. Wine & Viticulture Journal 35(3):60.

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This post was originally featured in the Spring 2021 issue of the Wine & Viticulture Journal.
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