WTN Blog

“Progress lies not in enhancing what is, but in advancing toward what will be.”
–Kahlil Gibran   

Innovation, excellence in service, listening to customer needs are the conerstone of WTN Services and are shared visions of our winery and wine retail partners.  2008 and planning for 2009 is underway for many of our partners and certainly for WTN. A success tip is to ensure your WTN Services Account Manager is participating with you in planning the next years activities. From budgeting of fulfillment services spend, to ways we can help in margin improvements, special projects and more the sooner your account manager is involved in your planning the better we can deliver opportunities for innovation and margin enhancement discussions for you. Speak with the WTN Services account management team today…

According to our friends at Verticle Response, “Forrester Research online sales will be up 21% over last year making this the most lucrative time of year for many of our customers.”

The key to success and anticipation of meeting customer needs is providing your web, email and fulfillment partners your daily volume estimates, peak SKU velocity movers and shakers and modifications to the plan that was anticipated for the season. As peak rolls forward, you have a good record of what is working and what is not working verses plan.

The key to holiday succees is if customer purchases are hitting later than anticipated let your partners know when the expected lift will be. If certain promotions are trending better let your partners know. Knowledge is power- better to over communicate daily sales trends to your partners than under. Don’t leave your fulfillment partner guessing communicate and update the plan for holiday success.

WTN Fulfillment Focus 

As the nights begin to chill it seems as if the summer just started and now it is post Labor Day. Wow -what a summer. With the passing of Labor Day, most wineries are very focused on harvest. At the same time we are focused on Holiday Planning and finalizing the key pieces to ensure our mutual holiday success.

There are many exciting things happening at WTN Services. We have added several new team members with a depth of experience in warehouseing, inventory control and logistics planning. We have increased the level of experience in winery relations and with our team in Napa and in Albany, New York.

Concurently, we have worked with our client base on defining expectations, expanding capabilities of our bi-coastal fulfillment centers and now have several months of history under our belt -better understanding the major system upgrades we initiated this past summer.

This week marks another milestone for our company. We will have set a new record for our company. We will have completed the largest volume shipping day in the history of our company, having shipped more packages in a single day than any of our competitors ship in a week.

This accomplishment is a statement about you our valued clients and your success through our partnership. We have a very loyal client base, a limited and select set of great new clients and the future could not be brighter for our bi-coastal fulfillment system and our mutual success.

Included with this posting is our fall newsletter- it features a few tips, a review of some of our newest staff additions and outlines our holiday shipping deadlines ensuring carrier delivery attempts prior to the specific holiday.

We have sent this newsletter update to each of our clients but in addition we are posting in our blog ensuring that everyone on your team has access and no one is missed. We believe open book visibility into our operation ensures our mutual success.

Again thank you for being a client!

For those of you that are not yet WTN clients or partners, we are honored to have you join the dialog  and peak into our world; even if just for a moment. 

At WTN Services we have a deep passion for wines, we hope for the opportunity to meet, partner or share a glass of wine together in the future with you.

As the wine industry matures a tremendous amount of confidential and sensitive information is collected during the normal course of business. From tasting rooms- to call centers to e-commerce transactions, the flow of winery sales data and customer information is staggering. This information encompasses client account information, date of birth information, client phone numbers, email addresses, wine buying preferences and other personal information that is usually captured in client records. The needs for protections of that data, both in-house and with fulfillment vendors, is of paramount and often understated importance. Understanding the standards of data integrity WTN Services has created a white paper entitled  “Winery Privacy, Security & Data Integrity: What’s the Risk to Your Winery?” for you to review and consideration.

winery-privacy-data-integrity-pdf.pdf

WTN Services/1800Flowers believes your winery business and winery customer information is too valuable to not be properly protected.  We strongly encourage you to evaluate the risks in the decisions of your fulfillment options. Warning: steer clear of private, Johnny-come-lately or Venture Capital backed winery fulfillment options that may not have the safeguards or the capital to maintain the safeguards to protect your data and consumer information.  As a financially solid publicly traded company, WTN Services/1800Flowers clearly understands your risks and the need for data protection. The risk of lost reputation and trust, as well as the steep fines and loss of shareholder value are too great to jeopardize neither your business integrity nor ours.  For further questions feel free to visit www.wtnservices.com or contact your WTN Services Account Manager or call 707.265.2933

Recently there has been comparatives and press articles in recent wine business publications on how to select a wine fulfillment provider and how they compare. Attached is our WTN Services White Paper. This white paper is produced as a “how to” in evaluating fulfillment services providers. It outlines what steps or homework you should do to make quality decisions in what best fits your business model. This paper is presented as “best practices” in vendor selection tips.

The key to any vendor selection is research and clearly defining what your needs are. The attached white paper provides recommendations of best practices in vendor reviews. Please feel free to use this tool when challenged to evaluate your fulfilllment needs.

Please email us or contact a WTN Services account manager 707.265.2933 with questions after reading the white paper on best practices in selecting a fulfillment vendor…

Matching Winery Needs to a Quality Fulfillment Provider…

Winery and wine retail fulfillment companies with a long-term vision of sustainable practices servicing the wine industry must strive to pursue the highest level of client service to attract or retain clients.

There are a very limited number of winery fulfillment companies that are scalable for direct to consumer growth anticipated in the next few years. Growth is fueled in part by a new awareness by wine direct consumers of new media-Web 2.0, blogging & Net TV.

There are even fewer winery fulfillment companies that are selective in their partnerships, understand the changes and have the financial strength to invest in the future in preparation of the market changes ahead. WTN Services is the one that meets all of the above conditions while focused on best in class client service and support.

The pursuit of “best in class” client services requires that the anticipation of customer
needs and expectations. The key to sustainable service is to then match those needs and expectations with a product and service offering that is timely today and anticipates, plans and invests for those needs tomorrow.

WTN Services is continuing in that direction. Within the last two years our clients have seen us successfully launch an east coast fulfillment center. We now lead the industry as the only winery fulfillment company with a proven track record of bi-coastal services. We lead not only in the number of packages we fulfill out of our two locations but in our ability to execute with excellence. This offering now has two years of experience and is being expanded.

Additional enhancements in technology, consumer research, training, education and staff development further affirm WTN Services lead in innovation for the future while recognizing our pioneering past.

In the case of winery and wine retail fulfillment, the definition and the value of  “best in class service” is great and at times under recognized. The value is very real and has a very large potential to reduce a clients costs and increase the clients ability to achieve their goals. It is fulfillment, done well with account management that understands your goals and abilities in planning, that reduces the cost of storage, fulfillment and shipping while making certain that the end consumers are pleased with the execution and quality of the final delivered product.

For winery and wine retail fulfillment to have its greatest impact on cost reduction and goals achievement, superior client service and support must be realized for three distinct constituencies…

1. The end users or the wine drinking consumer;
2. Inventory managers, product, marketing or club managers, or those with the overall responsibility for day-to-day contact with the fulfillment provider and
3. The corporate goals toward which they are all working.

There are many ways these constituency’s priorities overlap; however, there can be great differences in priorities…

For example, the consumer may simply want the reship or the return processed and redelivered within a day of his or her request, while an inventory manager is concerned with accurately anticipating and monitoring product inventory needs to avoid running out and the panic of “RUSH” pickups and deliveries. All the while, the corporate goal of keeping costs down and increasing sales must be served.

For world-class client services to be achieved in fulfillment, the needs and wants of each of these constituencies must be balanced, coordinated, managed, and met. For this daunting challenge to be accomplished, a fulfillment provider must have tremendous experience, and scale in financial resouces to invest in technological systems and people systems.

There are five main areas that make up the definition of “best in class”client service
within the winery fulfillment industry:

• Results that are excellent and consistent, on a routine basis especially related to continuity programs, daily order consistency and ecommerce fulfillment stadards (club, planning and execution is key);
• User-friendliness that builds trust and use (systems and account team);
• Proactivity in communication and anticipating ways to reduce costs and improve operational excellence and margin improvement for the client, (account planning and partnered management)
• Innovation that adds value over the long haul, (bi-coastal inventory management, carrier efficiency, packaging, etc);
• Achievement  and reporting of mutually agreed-to performance indicators.

If one is to determine the level of customer service of a fulfillment provider, detailed milestones — complete with metrics of their achievement — must be agreed upon, defined and assessed. In our next posting we will review metrics that should be monitored and expected of a premuim provider.

For further information or questions visit www.wtnservices.com or your WTN account manager.

Sometimes little changes can make a big difference in your profitabilty by rethinking appoaches to business. Recently we went through a series of meetings with FedEx and UPS Logistics Management seeking cost savings tips for our clients. One topic came up being insurance. If you ship out packages with a value of more than $100, never pay the carrier for insurance as it is covered with the shipment. If the shipments are valued in excess of $100.00 then what is your real cost of damage verses purchasing insurance. Let’s review an example…

Winery A wants to ship 2000 release shipments. The release is a 6 bottle shipment valued at 480.00 per shipment. The cost of insurance for these 2000 shipments would be aproximately $5000.00. 2000 shipments X $2.50 Insurance Expense per order = $5000.00 Total.

Traditionally the carrier loose or break 1 package out of every 1650 shipped so the exposure is S480.00 in retail loss verses an insurance payment of $5000.00. The insuring of packages is a major revenue source for the carriers with a minimal payout.

Fulfillment Savings Tip: Insure as little as possible to improve your profit margins.

WTN Services-1800Flowers is committed to helping our clients reduce expenses, improve their margin and enhance the consumer experience. A consumer is excited when they place a winery order and are eager to recieve thier order. A challenge with wine deliveries is the need for adult signature for delivery. The adult signature requirement adds to the risk of non-delivery or additional delivery attempts.

According to UPS Logistics, “the average number of consumer order returns in general retail runs from 2.5% to 3%. Wine returns due to the added issue of the adult signature requirement can increase this return rate to as high as 5%.”

What is the impact of the return on you the client?

1.) The customer is frustrated due to not receiving the product causing a potential lost sale or lost future sales.

2.) Increased cost of business as the carriers pass along a returns delivery charge and most fulfillment houses charge a returns processing and restocking fee. (WTN’s is the lowest in the winery fulfillment industry or the major fulfillment companies)

3.) If the consumer still wants the wine there is a reship fee and transport fee so in reality you are charged for transport due to three trips but the consumer paid for one. The result is a purchase that is no longer profitable to the average winery.

Profit Impact: The average return for a 2 pack of wine can cost the winery as much as $40.00 or more in delivery and reship fees when factoring initial shipping charges, returns shipping charges and reship charges all passed to the winery by the carriers both UPS and Fed Ex. On a wine club consisting of 500 members if 5% if the shipments return and are reshipped that would be an expense of $1120.00 in servicing that return,not counting your labor in facilitating the customer contact concerning the return.

What to do?

Tip to Ponder: WTN has introduced Package Management Delivery Techonology providing delivery attempt detail on every package shipped simply by logging into our Winelink Portal. Added to that is the ability to send a branded message reminder to the consumer of missed delivery attempts. Additionally this technology upgrade allows our winery client to monitor and note action taken by your staff as related to that return. You could send an email first missed delivery attempt, call the consumer second and ensure delivery on the third attempt.

Positive Customer Experience-Positive Profit Impact…

Clients in testing that have taken advantage of this technology and better managed returns have seen their returns drop by as much as 50%. Imagine a 50% improvement on returns. For a 500 member club shipping 6 times a year the positive profit impact would be aproximately $3,000.00 annually of charges negated by a proactive use of techology and support from WTN and the added benefit is more customer satisfaction. For wineries taking advantage of this technology with larger clubs the savings can runs into the thousands.

Returns are the hidden cost that creeps into profitability and customer satisfaction when not handled proactively. Stay tuned to further fulfillment tips to improve the customer experience and improve your bottom line results.