Personalized Wine Recommendation Website Reveals Untapped Market Ripe for Disruption and Rapid Growth
March 27, 2012 - San Francisco, CA - In the $34 billion domestic wine market, Club W is uniquely poised for rapid growth as the first e-commerce platform offering a personalized consumer recommendation engine and point of purchase all in one offering. Three months after launch, the San Francisco-based startup and its curated subscription model for wines is showing strong growth across a range of metrics.
“Obviously, it’s great seeing these disruptive ecommerce models emerging but I’m never too sure if buzz equates to sales,” says co-founder Mark Lynn. “In our case it’s nice to have both, seeing revenue hitting $1mm, annualized, is definitely a great step but more gratifying is that we’re connecting with our target market. We have 300% month-over-month user growth and only 1 percent attrition. People really like what we’re doing.”
Site visits and Facebook confirm Lynn, with 11,000 unique visitors, 73,000 page views and 23,000 Facebook likes. A large part of the attraction and one of Club W’s key differentiators is its Palate Profile, a proprietary algorithm that provides consumers with personalized wine recommendations.
“The beauty of the Palate Profile is that under the hood there’s a lot going on,” offers co-founder Geoff McFarlane, “but for the consumer, it couldn’t be simpler. They just answer questions they already know the answers to - for example do you like citrus - and we are able to pinpoint wines uniquely suited to their specific tastes.” Club members can also rate their wines, further refining the Palate Profile.
Another way Club W keeps things simple for the consumer is by eschewing traditional wine jargon in favor of straightforward advice delivered by a team of curators who are recognized leaders in the industry. Having collaborated on wine lists for some of the most recognized restaurants around the country including Per Se and The French Laundry, the curators share Club W’s passion for making great wine more consumer-friendly and accessible.
"I love that I can introduce people to great, undiscovered wines with Club W, just like I do at my restaurant, but with far greater reach," says curator Aaron Forman.
The QR Codes on each bottle mean that Forman’s reach extends all the way into people’s homes. After scanning the code with a smartphone, club members are taken online to a Curator Insight video where they can learn more about the wine and vineyard without any of the pretense or snobbery typically associated with buying great wine.
“Bringing wine into the digital age is a massive business opportunity,” notes co-founder Xander Oxman. “Overall, online sales account for 10 percent of all retail sales but only 1 percent of wine sales take place online.”
In part, this is because it is challenging to sell wine from multiple producers and importers through a single website without either running afoul of state regulations or becoming licensed in each state. Club W solved this challenge through a network of agreements with licensees around the country.
Uniting this network also puts the company in a unique position to rapidly gain market share in the highly fragmented wine space where no one retailer, online or bricks-and-mortar, accounts for more than 2 percent of total wine sales.
For the consumer, the highly-efficient licensee network means Club W has no distributor markup to pass on. Club W memberships start at $39/month for 3 bottles including shipping, a substantial savings on wines that typically retail for $18 - $25 a bottle elsewhere.