Five years ago Rick Breslin, CEO and co-founder of the wine app Hello Vino, was running a small Web agency, Drive Thru Interactive, for wineries in Modesto, Calif. Based on what he learned from his clients, Breslin started purchasing wine at local grocery stores and wine shops. After noticing confused shoppers beside him, Breslin began giving out free wine shopping advice by asking a few questions. “Unless it’s a specialty wine shop, very few retail associates in supermarkets know anything about selecting wine,” Breslin says. “Most of the time someone is asking a 16-year-old kid, ‘What wine should I pick to bring my boss?’ So I started recommending wines.”
Breslin quickly learned that asking a few simple questions could help demystify the wine buying process: What occasion is the wine for? Do you prefer red or white? Which flavors do you like? Is this for sharing? Is this for a meal? That’s when Breslin decided to package the conversation into an app.
Building a Brand
Prior to launching Hello Vino, Breslin and his team of employees from the Web agency and outside consultants and contributors spent six months inputting tens of thousands of pairing combinations and occasions for buying wine, working directly with wineries to create a robust database that
now contains 200,000 wines. The app quickly filters information to help users find what they are looking for by asking a simple initial question: “Can we help you choose a wine?”
“Having good content that is easily accessible is huge,” Breslin says. “We spent a good six months collecting tens of thousands of pairing combinations and tasting notes to get great wine data. Having great information like that is paramount for us so we could tailor our recommendations to a U.S. audience.”
To grow excitement prior to the Hello Vino’s launch, Breslin sought out potential users by creating a blog and participating on social networks. He sent out press releases to various media outlets and websites like Mashable, The Huffington Post, KillerStartups.com and Daily App Show that cover the tech and mobile industries, in addition to wine-industry outlets including: Wine Business Monthly, Wine Biz Radio, and Vineyard & Winery Management magazine.
Prior to the app’s launch, Breslin also grew Hello Vino’s fan base on Twitter—a tool that he calls “the greatest free market research tool.” He searched the terms “wine,” “app” and “mobile,” and followed 2,000 people initially.
Hello Vino then focused on search engine optimization to help direct potential fans with searches like “what wine goes with pizza?” and “wine pairing for ham” to HelloVino.com. That competitive research went into an app and a “wine for everybody” brand with a reliable audience by the launch date. Today, Hello Vino has more than 17,200 followers on Twitter, a Facebook page with 3,500 likes and a website that has 80,000 monthly visitors, Breslin says.
Thanks to the extremely competitive market of more than 830,000 iPhone apps and the large amount of time required to achieve meaningful results from engaging users on social networks, “app marketing is a 12-hour-a-day job,” Breslin says, adding that “this is especially true if you are not executing any media buys which we were unable to afford as a bootstrapped startup.” Launching a mobile web app prototype at the 2009 Boston Wine Expo helped Hello Vino quickly get in front of a target audience. “We wanted to see if people would actually use the app,” Breslin says. “As soon as people started using the app, they loved it.”
They loved it enough that most of the 15,000 people who tested the prototype at the expo wanted to download the app, Breslin says.
The iPhone app officially launched in June 2009, and quickly catapulted into first position among wine apps in Apple’s App Store. In October 2010, the app was released on Google Play for the Android market. Occupying the New and Noteworthy and Staff Favorite spots in iTunes tripled download rates to 2,000 a day, Breslin says. Three years later, Hello Vino has exceeded 1.1 million downloads; almost three-quarters of users opt in to location-based services.
“The way Apple ranks your app is based on a proprietary algorithm that includes several factors such as daily downloads over a certain period of time, the length of time the app is in the store and the repeat usage of the app,” Breslin says. “If you don’t come out of the gate strong, you’ll be forgotten.”
Creating a Sustainable Model
Despite Breslin’s success, there are plenty of wine apps littering the digital landscape. Some, like Crushd, tried to create a wine-based social media channel. Others, like Wine Ph.D., which helped enthusiasts and novices make wine selections, no longer work.
Gary Vaynerchuk, who co-founded a social media consulting brand and started the very popular daily video blog, Wine Library TV, which had been running for few years and attracted 80,000 viewers a day, tried to transfer his audience over to Daily Grape, an app that connected to the website. After several years, the app closed in August 2011, and Nirvino, a wine ratings guide, was abandoned without any future content updates. “There’s certainly no shortage of wine apps that have not been able to acquire a critical mass of users and no longer work,” Breslin says.
Treat creating an app like its own company, Breslin says. “Most people just throw a paid app into an app store,” he says. “That’s not a sustainable model.”
That’s something Michael Bottigliero found out the hard way. Bottigliero, founder of Windy City Wine Guy, a wine event and private consulting company, launched an app called Windy City Wine Guy on Demand in 2011.
The idea was to provide a personalized sommelier service—app users could ask Bottigliero questions about wine pairings and he would respond within 15 minutes to an hour. He spent $1,000 to create the app and charged $2.99 per download, which included three questions. Each additional question cost 99 cents. “I had probably 150 downloads in the first month or two and then it kind of tailed off,” Bottigliero says. “I lost a little bit of money on it, but it was worth it to try.”
Still, Bottigliero and his wife certainly don’t miss the middle-of-the-night phone calls for wine questions. “I don’t think I did anything wrong with the app, but it didn’t catch enough buzz,” says Bottigliero, who has more than 3,000 followers on Twitter. “And I don’t have any idea on how to create enough buzz.”
Having a successful wine app is more than just creating enough hype, says Paul Mabray, chief strategy officer for VinTank, which does social media intelligence for the wine industry. “The reason many wine apps struggle is a lack of business model and a misunderstanding of what the consumer really wants,” Mabray says.
VinTank helps wineries follow millions of wine conversations on social media channels with its social media monitoring tool that helps wineries learn who is talking about wine and what they are saying. That can range from a post or tweet such as, “I really liked this wine with my girlfriend” to more detailed information like “I just purchased a great chardonnay from Napa Valley” or “This 2010 Layer Cake Malbec is amazing with spaghetti and meatballs.”
To date, Mabray says VinTank has measured more than 300 million conversations across 12.5 million social users, but of that number, only a small percentage have been specific. For example, only 2.75 million users have mentioned a brand, variety or region of wine in their conversation, and only 250,000 users have written a tasting note. “You can see how small the group really is,” he says.
Having a concrete revenue model is also essential for building a financially successful app that has a viable business model, Mabray says. “But who do you charge?” he says. “The consumer hasn’t been very kind to the app world, because it’s not really profitable unless you have hundreds of thousands of users.”
Charging the wine industry isn’t a great avenue either, he says. “We, in the wine industry, are notoriously cheap and horrible about spending money on digital tools.”
Successful apps in any industry capitalize on what Mabray calls the “cost of caring”—the pain point where someone cares enough or is bothered enough about something to download and then frequently use an app. For example, if someone is at a restaurant where the wine list is long and confusing, he or she might benefit from using an app.
Since average Americans don’t purchase expensive wines, Hello Vino’s business model is to only recommend wines that cost $40 or less. With its “wine for everybody” philosophy, the app focuses on wines sold in major retailers to mirror the average consumer purchasing patterns. Its No. 1 pairing is for pepperoni pizza.
Even though Mabray acknowledges that Hello Vino is one of only a few wine apps with a business model, he says, at the “supermarket model” level, most people aren’t going to care if they purchase a bottle of wine they end up disliking if it costs $10 or less.
It’s a point that Breslin disputes. Instead, he points to Hello Vino’s conversion rate of app users who actually purchase a bottle of wine. Every Hello Vino user is given a suggested wine pairing, which has translated into a purchasing rate of 8.2 percent per “click” or “tap” on the app, almost 12 times greater than benchmarks for other digital and mobile placements, Breslin says.
To help create a sustainable model, Breslin says Hello Vino “went out of the gate” thinking the app will always be free. “We wanted to make money another way through sponsorship, collecting data about consumer trends that we could sell to different outlets, so we don’t have to charge consumers,” he says. For Breslin, it was more important to have access to raw data and information about his users’ purchasing behavior. He says the app makes money through sponsorship, direct wine sales, premium features for sale within the app, and by collecting anonymous consumer data that can be sold as information to “different outlets” about consumer wine drinking so they don’t have to charge consumers.
“Regardless of what the wine industry thinks they know about what consumers want,” Breslin says, “if our users are drinking pinot with turkey, we know about it, because that’s what we’ve measured.”
In an age driven by user-generated content, many companies are forgetting to put consumer-centric strategies in place, Mabray says. That means changing how people think about purchasing wine by building a stronger connection with the consumer. “There is a fundamental breakdown in the wine industry,” Mabray says. “We aren’t a marketing industry, per se. We tend to be a manufacturing industry that tries to solve problems through distributions and scores, like Robert Parker’s well-known wine rating system, rather than telling stories about the wines.”