There are three general types of ecommerce for the global wine and spirits industry, ad-hoc, recurring and targeted. What they are and how they impact how customers interact with a producer or retailer’s website is one of the key pieces to understanding the BlackSquare wine revolution.
We define ad-hoc ecommerce shipments as those transactions that come through a public website for a random number of individual bottles. The purchaser has no previous connection to the brand or site and there is no confidence this user will purchase again in the future. This category of ecommerce makes up a massive majority of traditional ecommerce sites currently running but is responsible for less than 30% of overall online revenue in the industry.
Recurring ecommerce shipments (eg. wine club) are defined as those which happen monthly (or quarterly) for a set number of bottles (2, 4, 6, 12). The user has made a substantial commitment to the brand or site and there is high (95%+) confidence the user will purchase again in the future. This category of ecommerce makes up a tiny minority of existing websites but is responsible for between 50% and 70% of overall online revenue.
Targeted ecommerce shipments is a follow-on to recurring ecommerce shipments in that “ad-hoc” purchases which are made by “recurring” members are sent out monthly (or quarterly) with the batch shipments. This category of ecommerce is almost non-existent however can be up to 10 times as profitable (based on our internal numbers) on a per bottle basis as ad-hoc ecommerce. The higher profit margin is due to the batch shipping of orders once per period and shipments going to existing recurring members.
To understand why batch shipping is more profitable, take a look at our batch vs. manual shipment primer.