Winc business model: How it works, background, and journey

Winc business model works for one of the more popular wine clubs in the U.S. There is no need to flash receipts to show the vineyards you visited in the earlier year. The less you know about wines, the better you are likely to enjoy your experience with Winc. It is a wine club and online winery that makes exploring wines easier and more enjoyable. 

The California-based winery was co-founded by Brian Smith who is a sommelier. An online palate profile is used together with your ratings for recommendation and shipping of the best wines suitable to your taste. There is no need to spend a huge amount of time in wine aisles trying to decipher the labels. In most cases, you end up selecting the bottle that looks the prettiest. 

There is no requirement to join the club and you may skip the monthly shipment if you wish. In case you are not too keen on a monthly subscription, this brand also offers an a la carte shop to their members. Here you can get discounted pricing for the wines.

Winc: A brief background

Even in the case of the more advanced sommeliers, it is practically impossible to be aware of all the wines available in the market. You can get more than 20,000 wines on the popular website wine.com. This does not include the thousands of other kinds of wines available worldwide that are not registered on the website. 

For simplifying the product discovery in this kind of overcrowded market, in the 1970s many people began wine clubs. The model used was straightforward. The winery will pick a new bottle each month and send it to its subscribers.

By the 2010s many of these wine clubs went online. However, they still followed the conventional method of sending the bottles monthly to the subscribers. This was the Winc business model as the co-founders saw an opportunity to serve the wine lovers better. They launched Club W in 2012. 

It was a personalized subscription wine club that aimed at making the wines easy to get and simpler to enjoy. Rather than sending the same bottle to all the subscribers that they may not enjoy, Club W sent different bottles to various customers depending on a sign-up survey regarding their taste. 

Club W was aware of the fact that most of the shoppers were not wine experts. They just asked simple questions in their survey without using the sommelier lingo. For instance, do you like salt in your food? Or do you enjoy citrus fruits? Then, third-party wines matching the subscriber profile were sent to the subscribers.

Redefining the customer experience

The Club W team decided that they will look to go above and beyond the customer expectations. This was at a time when nobody else in the wine industry was offering a personalized service. Eventually, their business model canvas was proven right. 

The everyday wine shoppers loved the simple ways in which they were able to discover the wine bottles by using Club W. This allowed the business to grow exponentially. You need to follow the Winc business model to explore how you wish to develop product experience and not just make it convenient for the shoppers.

Sending personalized recommendations: The Winc business model uses the customer data you may already possess. For this, you can survey the shoppers and encourage them to leave product reviews and ratings. You can also track their buying history by providing some solid recommendations. There are several e-commerce platforms out there that provide information about the website behavior of shoppers. So, you are aware of the items that are browsing and adding to the cart.

Simplifying their online ordering: The Club W team added resources to simplify the checking out experience for their shoppers. You can sell certain products via subscription therefore; shoppers do not have to reorder the products.

Highlighting all the add-ons: The Club W team brainstormed about the additional resources you could include with the wine purchases to improve the buying experience.

Reimagining the way, the wine is created and not just how to sell it

Having a personalized wine club online was an innovative idea when Club W was launched initially. However, within a few years, several wine sellers started utilizing the online subscription model. Some of them sent the users bottles based on their taste. A couple of years after the launch of Club W, there came Bright Cellars. It was an algorithm-based wine subscription service selling personalized wines to users. 

However, a lot of competition was not the only problem faced by Winc. They found that wine experts were not taking the Winc brand too seriously. They started looking to get the brand established as a source of top-quality boutique wines. But most sommeliers envisaged Winc to be a glorified form of marketing.

Due to all this, Club W made a major shift in its business approach. They began creating their wines for the subscription services they were offering. The idea was to make great-tasting wines themselves rather than selling third-party wine bottles. This allowed the wine lovers to love and trust their brand more. 

They had an edge for pulling this off. They had customer data. They had plenty of intelligence about the preferences of their subscribers coming through from purchase histories and survey answers. they created bottles that reflected these tastes and Winc gradually became a force to reckon with.

Also, read 8 best alcohol delivery apps

Winc became a trusted winemaking brand

The core audience for Winc has always been the intimidated wine drinkers. These are the people that walk into the wine liquor store only to stare at the rows of bottles blankly. But after Winc’s business model shifted to making their wine, they saw an opportunity to expand the audience. Rather than appealing only to the novice drinkers the company saw an opportunity to draw serious wine lovers as well. 

The website of the company has played a significant role in this. On their website, they explain how and why their wines are prepared in smaller batches. And h0w they are using top-quality grapes from all around the world.

It must be noted that the brand never forgot the core audience though. It stays true to the real mission of making the wine accessible by maintaining the price range between $13 and $20 for most of its wines. Their customer survey from the start is still simple enough to understand and uses straightforward questions rather than all the wine lingo. 

Although their product descriptions on their websites include some advanced details, Winc business model has taken due care in placing the need-to-know content on their pages. These pages will inform you about what the wine can pair with and what it tastes like etc. Many shoppers are looking to skip the unwanted information.

Winc goes public

Winc has joined several consumer start-ups that are looking to go public after all of them experienced tremendous growth during the last year. The L.A.-based wine club is listed on the NY stock exchange under the WBEV ticker. Winc has been successful in raising $54.2 million in funding thus far. 

There is also a customer equity program available that raised $16 million. They have stopped accepting new investments since then. The company experienced massive growth during the coronavirus pandemic with increased revenue of nearly 70% on average.

Although Winc experienced a quick growth in the last couple of years, it is a lot smaller company than others that went public in the meantime. There is one large unknown Winc has to face at the moment. Whether or not the consumers will go back to their pre-pandemic buying habits or not.

Conclusion

When the founders of Winc launched Club W in 2012, most wine sellers were not obsessed with the clientele. They trusted their gut feeling and the opinions of experts to decide what bottles were worth selling. Rather than succumbing to these pretensions about a typical business model, Winc decided to trust the input from the customers and used the feedback for driving their product experience. 

Although the conventional sommeliers may scoff at putting this kind of trust in the customers that know little about wines, the brand was successful in delivering several best-selling wine bottles. 

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