THE PRECARIOUS STATE OF WINERY SOFTWARE

Hand pulling Jenga block from block tower

“Help us, please!”

Many wineries are unhappy with their website or wine club software. “Help us, please!” was the first thing I heard when I started interviewing wineries about the problems they faced building their Direct to Consumer (DtC) business. Initially, the fix seemed straightforward. What could be so hard about engaging customers and driving them down the purchase funnel?

Then I heard this during an interview with a respected winery owner:

"We don't need a new website. Our website is not what sells wine. We need tools that help us target and incentivize our loyal customers. Then an ecommerce solution that provides an amazing checkout experience."

It became evident that just a great-looking website wasn't going to move the needle much. The problem lived somewhere deep in software behind the website. The software that managed the marketing, customers, club management, Point-of-Sale, website, ecommerce and event management. All the important features that customers interface with. We took a hard look at the solutions wineries were using. Some serious problems were discovered.

The impossible task of building a winery ecommerce platform with a small team.

The team I manage has designed and built countless ecommerce stores, websites, mobile apps, and fully-custom software system for businesses small and large. Through years of experience, I can promise you that developing and maintaining complex winery software that includes solid ecommerce features, which your customers love, is almost impossible for a small company with a small team.

Why impossible? There are at least 20 core features that a winery needs to have in their DtC software:

  1. Website builder
  2. Web content management system
  3. Shopping cart and store checkout
  4. Products manager
  5. Inventory manager
  6. Customer manager with CRM
  7. Order, returns and exchanges manager
  8. Discounts and loyalty programs
  9. Fully integrated Point of Sale (POS)
  10. Wine sales and tax reporting
  11. Wine club manager
  12. Memberships and saved member payments
  13. Club orders and batch management
  14. Shipping rates and carrier integrations
  15. Order fulfillment and shipping management
  16. Marketing email manager
  17. Blogs, articles, social media, and content marketing
  18. Club sign-up and tasting room kiosks
  19. Analytics and machine learning
  20. Integrations for tax calculations, accounting, and compliance

Pick any one of these features and think about its complexities. Let's consider what it might take to design, build and support that single feature in a way that makes every customer happy. Think MailChimp for email marketing, which is a great example of well-done software that users love (that's #16 above). MailChimp has over 800 employees and sends over 1 Billion emails a day. Your winery software provider doesn't have the resources to even come close to building what MailChimp as built. If they offer an email marketing solution, I'm going to guess it feels a bit lackluster.

So how are winery software providers succeeding? Or are they?

Hand pulling Jenga block from block tower

A Peek Behind the Curtain

There are roughly 15 companies that attempt to offer DtC solutions for wineries. See Paul Mabray's DTC Vendor Matrix for an excellent overview. Only a handful have attempted to offer all of the core features listed above. They are called "full-stack" providers.

Many of the well-established winery software providers (we call them "legacy solution providers") have been in business for over a decade and have sizeable client lists. Some boast they service over 1000 customers. This is great for credibility, but a large percentage of these customers aren't happy. We know because we've talked to a lot of them.

Unlike a fine wine, your software is likely getting worse with age. Most legacy solutions are built on top of old, outdated code -- the foundation of the solution. The older the code gets, the harder the software is it to maintain. As time goes by, the software becomes buggy, brittle, and difficult for developers to update or re-engineer. Unhappy customers are complaining and reporting issues, requiring resources to focus on fixing bugs instead of innovating. Word starts to spread and the software provider's reputation begins to dissolve. This can put a company into a tailspin that is hard to pull out of.

My team understands this situation well. We've been there before.

Jenga tower toppling over

Open up or risk toppling over

These legacy solutions are mostly proprietary, meaning the software is owned by the provider. They are fully responsible for updates and maintenance of the software. Another term for this type of software is "closed source", and was a common approach ten or so years ago. We're way past that now.

Today's modern solution provider needs to build as little proprietary software as possible. Instead, they need to use existing, best-in-class, open technologies that are maintained by large communities of developers. This type of software is called "open source". Many great options exist, and when used effectively it can save providers a tremendous amount of time and effort. A great example is Active Merchant, which provides an easy way to connect software to payment gateways for credit card processing. It would take weeks for a small team to develop a similar solution, and potentially months to keep the software updated and bug-free.

My team understands this approach. We're doing it now.

After more than a year of research, we concluded that building our solution on the Shopify platform made a ton of sense. Yes, there are some limitations and challenges, but the advantages far outweigh the downsides.

There are 13 core, full-stack features that Shopify provides:

  1. Website builder
  2. Content management system
  3. Shopping cart and store checkout
  4. Product manager
  5. Inventory manager
  6. Customer manager (CRM)
  7. Order manager (OMS)
  8. Discounts and loyalty programs
  9. Fully integrated Point of Sale (POS)
  10. Shipping rates and carrier integrations
  11. Order fulfillment and shipping management
  12. Blog articles and events
  13. Analytics and machine learning

Getting these features for free provides my team with a competitive advantage. These 13 core features will advance as Shopify grows. Plus, they add new major features every year, like Shopify AR, a new augmented reality shopping experience. Plus, the open-source community is building hundreds of free additions (like Active Merchant mentioned above). If my team needs to extend the functionality of Shopify we either install one of the 2000 apps available to merchants, or we simply build our own using their amazing app development library Polaris.

There are still 7 core features that Shopify doesn't provide:

  1. Wine sales and tax reporting
  2. Wine club manager
  3. Membership and saved payments
  4. Batch order/shipment manager
  5. Marketing email manager
  6. Club sign-up and tasting room kiosks
  7. Integrations for taxes, accounting, and compliance

When you examine this short list, they are winery-specific features except for the marketing email manager. Luckily, MailChimp, SendGrid, Campaign Monitor, and others make it very easy to integrate third-party solutions. That only leaves six core features for a team to develop and support. And remember, these are winery-specific features, which is where a team should focus their attention. Winery software developers really shouldn't be building inventory management systems in 2019.

Translation: by using Shopify and open-source add-ons, my software development team has the time and resources to innovate. Less time is spent building & supporting ecommerce and marketing features that already exist.

The truth is, a great DtC software provider is hard to find. The complexities of a full-stack solution will overwhelm a small team. Many proprietary solutions aren't working for today's modern winery. Until the industry accepts the fact that open systems are required to effectively scale, great options will be limited.

Photos by Samantha Hurley from Burst