I wrote about my least favorite time of the year when I owned a direct to consumer wine club a couple of weeks back, citing the return game this time of year. (Returns Kill wine clubs)
Turns out, it was worse this year, which if I was going to pat myself on the back, is something I would have predicted. As the economy worsens, the rate of returns outside of how well your wine club does, goes up. Here’s the stats from Digital Commerce 360.
So what else will wine clubs experience during an economic downtown? Well, much like increased returns, there is an increase in price pressure. What I mean by that is that, a higher percentage of your sales are going to come from those wine clubs which you are willing to discount and in this case, you may need to heavily discount them.
Thirdly, if the higher rate of returns and increased insistence on discounts isn’t bad enough, wine clubs will see new members stay in their clubs for a shorter time period than they have before.
It’s the trifecta of wine club issues which all come along with a worsening economy where average consumers have less to spend on stuff that isn’t essential.