The Evaluation of Mid-Atlantic Wineries Websites: A Comparative Analysis
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1 The Evaluation of Mid-Atlantic Wineries Websites: A Comparative Analysis Gustavo Ferreira (Virginia Tech) Paulo Ferreira (MAWAS) Peter Caffarelli (Virginia Tech) Presented at the American Association of Wine Economists 7th Annual Conference Stellenbosch, South Africa
2 1. The Virginia Wine Industry The production of wine in Virginia dates back to the early 17 th century at the Jamestown Colony, and continued with the efforts of Thomas Jefferson, George Washington, and James Madison to promote the development of an American wine industry. Most of the wineries are located in the Northern Virginia region, the Shenandoah Valley, and the Monticello American Viticulture Area (AVA).
3 1. The Virginia Wine Industry Wine Tourism: The Virginia government has made the promotion of state wines and winery tourism one of its top agricultural and tourism priorities (Johanson, 2012). There has been an increase in the number of visitors to wineries - from one million tourists in 2005 to 1.6 million tourists in 2010 (Rimerman, 2010). Wine Enthusiast has recently named Virginia one of the top ten wine travel destinations for 2012.
4 Production of Bulk Wine (Gallons) 1. The Virginia Wine Industry Figure 1. Production of Bulk Wine in Virginia (Gallons) Wine production in Virginia has been steadily growing, particularly since the mid-1990s. 1,200,000 1,000, , , , ,000 0 Year The number of Virginia bonded wineries grew from 129 in 2005 to 238 in 2013.
5 1. The Virginia Wine Industry Challenges faced by the industry: In 2006, a court ruling nullified Virginia s self-distribution law for in-state wineries. Only 35 percent of the wine volume produced in Virginia is distributed through the three-tier distribution system (Rimerman, 2010). Three-tier system Retail Winery Licensed distributors Restaurants
6 1. The Virginia Wine Industry Challenges faced by the industry (cont.): Overall, Virginia wineries are predominantly small, and family owned and operated businesses producing less than 10,000 cases. Wineries produce many different grapes and wines instead of concentrating their limited resources on a specific product and then develop expertise and a marketing image (MFK, 2007).
7 1. The Virginia Wine Industry Challenges faced by the industry: Small market share - Virginia wines sells account for less than 5 percent of wine sales within the state. Inconsistent quality and some bad reputation in the past. Grape production in Virginia is characterized by relatively high production costs - high labor and materials costs for vineyard spraying (Leahy, 2012). High selling prices!
8 1. The Virginia Wine Industry Segment Average bottle price (750ml) Market share of table wines (2009) Value (<$3) $ % Domestic $ % Imported $ % Sub-premium ($3-$6.99) $ % Domestic $ % Imported $ % Premium ($7-$9.99) $ % Domestic $ % Imported $ % Super-premium ($10-$13.99) $ % Domestic $ % Imported $ % Ultra premium (>$14) $ % Domestic $ % Imported $ % Total Table Wines $ % Domestic $ % Imported $ %
9 2. The Benefits of Winery Website Development The internet is arguably the most powerful and accessible information tool we have ever seen in our lifetime and it became a very important marketing medium. Wineries in the United States are facing a worldwide oversupply of wine mainly from large domestic wine makers (i.e. California) and emerging wine producing countries (i.e. Australia, South Africa, Chile, etc.). Small wineries find it increasingly difficult to influence distributors to market their products and to secure retail shelf space. Many of these wineries do not have the resources or the knowledge to implement comprehensive marketing strategies and consequently are markedly vulnerable.
10 2. The Benefits of Winery Website Development Websites should be used as a marketing tool that enhances the communication between a winery and its customers, and as an alternative distribution channel. Websites provide some basic information about a business that might otherwise cost considerable time and energy making available. A winery s website is likely to be the very first contact that a potential customer may have with the winery. Because first impressions are critical in this industry, the winery should be sure to develop and maintain a site that is attractive, up-to-date, and easy to navigate.
11 2. The Benefits of Winery Website Development Consumers will not return to websites that do not give them good experiences, which may result in losses of direct wine sales or future visitors to the winery (Belanger et al., 2006; Nielsen, 2000; 2002). Many studies have identified the benefits associated with the adoption of Internet technology by wineries (Giraud-Héraud, Soler and Tanguy, 2001; Quinton and Harridge-March, 2006; Sellitto and Martin, 2003; Stricker, Mueller and Sumner, 2007). A total of 182 Virginia wineries were analyzed, and the quality of their website was measured based on four broad dimensions: (1) General features of the website; (2) Wine tourism; (3) Marketing; (4) Educational.
12 2. Benefits of Websites Development for Wineries 1. General features of Web site Visits to winery (Wine tourism) Increase in direct wine sales 2. Wine tourism Perceptions from potential customers, distributors or retailers Relationships with retail and distribution channels Increase in retail wine sales 3. Marketing tools 4. Educational Brand equity Increase in prices and customers loyalty
13 2. Benefits of Websites Development for Wineries 2.1 General Features While a well-designed site will give people a positive image of your business, a poorly designed website will project a negative image of your winery and give people the impression that your business is likewise disorganized or poorly managed (Mainville, Sterrett, and Mundy, 2009). ). 2.2 Wine Tourism A positive perception from the website can encourage the first or repeated visits to the winery. According to Getz, Carlsen and Anderson (1999) wineries should use their websites to transmit information about the wine tourism services offered by them, as well as about specific touristic attractions and events organized in the region.
14 2. Benefits of Websites Development for Wineries 2.3 Marketing Wineries, in particular the smallest ones, should use websites as a marketing tool to overcome limitations at the distribution channels and to expand both direct and retail sales. The winery website can also be used as promotional platform in a cost effective manner in the sense that, online promotional efforts cost less than printing services and promotion in television, press or radio whilst having a greater effect. 2.4 Educational Literature shows that customer education has the potential to retain visitors and expand a winery s customer base (Hall, 1996).
15 2. Benefits of Websites Development for Wineries Table 1. List of Recommended Website Features for Virginia wineries General Features of the Websites An URL that is clear and easy to remember Updated website Contact information ( , phone, social networks, address.) Legible fonts Wine tourism Pictures Images or animations with added value Tasting room Winery or wineyard tour Food items offered Calendar of events Gift shop and / or souvenir items Information on wine production facilities Maps and / or driving directions towards the winery Opening hours of the winery Wider regional information (e.g. attractions, activities) Links to wine-related web sites Links to web sites of wine and/or grape industry associations Information and/or links to local tourism-related business Direct marketing FAQ newsletter sign-up On-line wine club Social networks List of available wines with description and prices On-line store Photo gallery about the products and/or the winery Awards given to wines Newspaper articles Testimonials & feedback from customers Educational History and/or stories about the winery Profile of the winemaker(s) provide Information on grape growing, grape varieties, wine making, etc. Food recipes pairing with the wines offered Tips on wine drinking, tasting, health-related issues.
16 3. Methodology and Results The 182 websites were individually reviewed and rated by three different researchers, and the Cohen s Kappa was computed as an inter-reliability test among raters (0.91 value). Using a dichotomous scale, the researchers coded 1 if a particular feature was present in the website and 0 if the feature is not included in the website or it simply failed to meet a minimum standard and could be greatly improved.
17 3. Methodology and Results After computing the score for all wineries, the mean completion rate for the entire state was calculated. Table 2. Percentage Share of Features Present on Virginia Wineries Websites Website Dimensions Percentage Share (%) General Features of Website 90 Wine Tourism 54 Direct Marketing 43 Educational 52 n = 182 Wineries Source: Authors' own calculations
18 3. Methodology and Results Table 3. General Features of Virginia Wineries' Websites Proportion of Virginia Wineries with this Website Feature feature (N=182) An URL that is clear and easy to remember 94% Updated web site 79% Contact information ( , phone, social networks, address.) 97% Legible fonts 93% Source: Authors' own analysis of Virginia wineries' web sites.
19 3. Methodology and Results Table 4. Wine Tourism Features of Virginia Wineries' Websites Website Feature Pictures Images or animations with added value Tasting room Winery or wineyard tour Food items offered Calendar of events Gift shop and / or souvenir items Information on wine production facilities Maps and / or driving directions towards the winery Opening hours of the winery Wider regional information (e.g. attractions, activities) Links to wine-related web sites Links to web sites of wine and/or grape industry associations Information and/or links to local tourism-related business Source: Authors' own analysis of Virginia wineries' web sites. Proportion of Virginia Wineries with this feature (N=182) 95% 67% 81% 45% 33% 78% 19% 29% 80% 82% 44% 29% 25% 40%
20 3. Methodology and Results Table 5. Marketing Features of Virginia Wineries' Websites Website Feature FAQ newsletter sign-up On-line wine club Social networks List of available wines with description and prices On-line store Photo gallery about the products and/or the winery Awards given to wines Newspaper articles Testimonials & feedback from customers Proportion of Virginia Wineries with this feature (N=182) 7% 52% 35% 69% 90% 51% 69% 28% 22% 10% Source: Authors' own analysis of Virginia wineries' web sites.
21 3. Methodology and Results Table 6. Educational Features of Virginia Wineries' Websites Website Feature History and/or stories about the winery Profile of the winemaker(s) provide Information on grape growing, grape, varierity, wine making, etc. Food recipes pairing with the wines offered Tips on wine drinking, tasting, health-related issues. Proportion of Virginia Wineries with this feature (N=182) 85% 50% 68% 38% 18% Source: Authors' own analysis of Virginia wineries' web sites.
22 3. Methodology and Results Null Hypothesis: There are no significant differences between winery groups (inside and outside the two clusters) mean scores of each website features dimensions. Alternate Hypothesis: There are significant differences between winery groups (inside and outside the two clusters) mean scores of each website features dimensions.
23 3. Methodology and Results Table 7. Summary Statistics of the Four Website Features Dimensions for Groups of Wineries Inside and Outside the Clusters. Cluster Location Mean Standard Deviation Frequency General Features Outside Inside Wine Tourism Outside Inside Marketing Outside Inside Outside Inside Educational
24 3. Methodology and Results Table 8. One-way ANOVA for the Four Website Features Dimensions. I. General Features Source DF SS MS F-value P-value Between groups Within groups Bartlett's Test for Equal Variances Chi-square = P-value = II. Wine Tourism Source Between groups DF SS MS F-value P-value Within groups Bartlett's Test for Equal Variances Chi-square = P-value = III. Marketing Source Between groups Within groups DF SS MS F-value P-value Bartlett's Test for Equal Variances Chi-square = P-value = IV. Educational Source Between groups Within groups DF SS MS F-value P-value Bartlett's Test for Equal Variances Chi-square = P-value =0.993
25 4. Mid-Atlantic Analysis (Virginia, North Carolina, and Maryland) Number of Wineries Analyzed: Evaluation of Wineries Web Sites North Carolina Industry Virginia Industry Maryland Industry Average Average Average General Features of Web Site 89% 92% 90% Clear and easy to remember URL 93% 94% 92% Updated web site 71% 80% 75% Contact ( , phone, social networks, address.) 100% 98% 98% Readable fonts 93% 96% 96% Wine Tourism 59% 55% 55% Pictures 93% 96% 88% Images or animations with added value 66% 70% 58% Tasting room 87% 83% 83% Winery or wineyard tour 73% 45% 35% Food items 28% 34% 21% Calendar of events 72% 78% 77% Gift shop and / or souvenir items 35% 20% 25% Information on wine production facilities 68% 30% 77% Maps and / or driving directions towards the winery 96% 85% 88% Opening hours of the winery 91% 86% 83% Wider regional information (e.g. attractions, activities) 43% 45% 38% Links to wine-related web sites 30% 31% 21% Links to web sites of wine and/or grape industry associations 14% 25% 29% Information and/or links to local tourism-related business 28% 41% 44% Direct Marketing 47% 44% 46% FAQ 8% 7% 6% newsletter sign-up 44% 53% 44% On-line wine club 42% 37% 44% Social networks 63% 70% 71% List of available wines (with description and prices) 92% 90% 88% On-line store 50% 53% 52% Photo gallery about the products and/or the winery 72% 70% 54% Awards given to wines 52% 29% 65% Newspaper articles 34% 23% 31% Testimonials by customers of the winery 17% 10% 2% Educational 59% 53% 49% History and/or stories about the winery 79% 86% 83% Profile of the winemaker(s) provide 31% 51% 44% Knowledge on grape growing, varierity, wine making, 71% 70% 60% Recipes on food pairing with the winery's wine 65% 40% 52% Tips on wine drinking, tasting, health-related issues. 50% 18% 4%
26 4. Mid-Atlantic Analysis (Virginia, North Carolina, and Maryland)
27 4. Conclusions The significant of this research is fourfold: (1) This study presents the first evaluation of the Virginia wineries websites. (2) This study developed evaluation criteria that measure the quality of a website in four different dimensions. (3) An initial overview of the scores reveals that there is room for further improvement in the wine tourism, marketing, and educational dimensions. (4) The results from the one-way ANOVA rejected the hypothesis that that wineries located in the Northern and Central regions have better developed websites and higher scores.
28 5. Future Research This study will continue for the three Mid-Atlantic states, and a comparative analysis will be conducted. Search Engine Optimization (SEO) analysis will be also included in the study (Website ranking, linkages, etc ). Econometric analysis to identify important factors that affect the quality of a winery s website.
29 Thank you Questions?
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