A new insight into DTC sales in Australia

In 2022, instead of conducting its own Wine Direct-to-Consumer survey, Wine Australia has worked with WineDirect (provider of software for DTC sales and customer management) and Enolytics (technology developers and data analysts) to bring new insights to wine businesses on the performance of direct-to-consumer (DTC) sales in Australia. These insights¹ are derived from the analysis and reporting of transactional sales data recorded on the WineDirect platform. The number of businesses included in this analysis is higher than the usual number of respondents completing Wine Australia’s Wine Direct-to-Consumer survey but the data may lean towards wineries with larger wine club memberships as this is the basis of the software.  

How did DTC perform in 2021–22?

Comparing the WineDirect x Enolytics data for 2020–21 and 2021–22, direct-to-consumer sales showed strong growth in the most recent financial year, with growth of 10 per cent in value and 7 per cent in volume². These growth rates were reduced compared with those of 2020–21, when lockdowns, closed domestic and international borders and the shift to online purchasing all favoured DTC growth. Across two years, since the beginning of the COVID-19 pandemic, all the major DTC channels have grown by around 50 per cent (Figure 1).

Figure 1        Net sales growth by channel (2019–20 to 2021–22)

 
^{Source: WineDirect x Enolytics}

Cellar door was the largest contributor, accounting for 34 per cent of the total value, but lost share to wine club compared with 2020–21 (Figure 2).

Figure 2        DTC sales by channel – past three years

 
^{Source: WineDirect x Enolytics}

Compared with Wine Australia’s Wine Direct-to-Consumer Survey results, the share of wine club is higher for this cohort (33 per cent compared with 19 per cent in 2019). This is likely a result of the customer base who uses wine club management software tending towards wineries with larger wine clubs on average.

Apart from overall value and volume increases, a number of other key metrics showed a positive change year-on-year. Average order value increased overall by 11 per cent, which is a strong indicator of efficiency, as it is means that it is taking fewer transactions to achieve the same value (or a higher value is being achieved with the same number of transactions). Further analysis indicates that the increase in average order value was driven by an increase in the average number of bottles purchased (up from 6.3 to 6.8 per order), while the average price per bottle remained the same. 

Average order value (AOV) was highest for telemarketing, followed by website sales, while the strongest growth was in cellar door AOV³  (Figure 3).

Figure 3        Average order value (A$) and year-on-year change by channel

^{Source: WineDirect x Enolytics}

A deeper dive into sales by price point

Analysing sales by the list price of the wines sold shows that the more expensive wines grew much more strongly than cheaper wines (Figure 4). This same result was found in the US and Canada data, and reflects more generally the strength of the premiumisation trend in mature wine markets.

Figure 4        Net sales growth by price point

^{Source: WineDirect x Enolytics}

Analysing sales by price point and channel shows that cellar door sales accounted for the largest share of wines sold between $20–$39 per bottle, but almost none of the wine sold above $50 per bottle. On the other hand, wine club sales accounted for a large majority of sales for wines above $60 per bottle. Interestingly, website sales accounted for over half of sales at below $20 per bottle, but also accounted for nearly half (the largest share) of sales at $50–$59 per bottle (Figure 5).

Figure 5     Share of sales by price point and channel in 2021-22

 
^{Source: WineDirect x Enolytics}

Who are the key customers?

Date of birth is collected for most purchase transactions in the WineDirect platform, while Enolytics has an algorithm to classify purchasers into male or female categories based on their first names. While this data does not extend to every purchase, given the high total number of transactions, it is a statistically significant source of demographic information that has not been available for Wine Australia reporting previously. 

The results show that in 2021–22, male ‘Baby Boomers’ accounted for 31 per cent of total winery DTC sales for this cohort, with male ‘Gen X’ second at 17 per cent (Figure 6). At an individual winery level, knowing the gender and age breakdown of customers, including by channel, provides a very powerful evidence base for marketing strategies.

Figure  6    DTC sales by gender and generation in 2021–22

 
^{Source: WineDirect x Enolytics}

This analysis also showed that males in these two demographics had the highest average spend at $293 (Gen X) and $291 (Boomers) and were more likely to buy red wines than white, rosé or sparkling. Conversely, females were more likely to buy white, sparkling or rosé wines, and spent less on average in each demographic group than the corresponding male segment. These findings are linked through red wines tending to have a higher average value as a category than white wines.  

The full Australia 2022 Direct-to-Consumer Impact Report can be downloaded here.  Reports are also available for the US and Canada.
 

^{1. The findings from their analysis have been published by WineDirect and Enolytics in their Direct-to-Consumer Impact Report, which is available free of charge on the WineDirect website. The analysis is also updated quarterly, with those additional reports available through the same source.}

^{2. Subset of all subscribers that had three years’ worth of data.}

^{3. Excluding the very small ‘admin panel’ sales – which refers to orders placed directly through the platform – e.g. by a staff member on the customer’s behalf.}