Refreshing Japan's Online Wine Offering - D2C Discovery #5

Swirl's wine box subscription service uncorks a new generation of online wine sales in Japan. Hear from the founder about what it takes to innovate in Japan's competitive wine market.

July 14, 2022

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Federico Fanelli co-founded his D2C wine company, Swirl, to refresh the wine offering in Japan. Key to his mission is a subscription business model that takes consumers on a journey through wine.

But what’s off with the online wine market in Japan in the first place? And how does Swirl breathe new life into online wine through their service? Find out in today’s final D2C Discovery post.

In today’s post:

  • Meet Federico Fanelli

  • Japan’s online wine market needs refreshing

  • Putting the “service” into subscription service

  • Keeping D2C sales fresh

  • The power of welcoming design in Japan

  • In Japan, telling the story of wine needs a personal touch

  • The challenge of pioneering a new model

Meet Federico Fanelli, an expert in the wine markets of Asia

Federico discovered his passion for the Asian wine market while at university. He has pursued it intensely ever since. He began studying Japanese and learned the import regulations and practices for wine in Japan. He also took opportunities to work at international wine fairs in Italy. Here he introduced fine Italian wines to Japanese visitors, building his network in the process. Through this work, he learned what the Japanese look for in wine.

After graduating Federico made it to Japan where he worked for a wine importer for several years. During this time, Federico discovered the online wine market in Japan was missing something. 

The colour and joy of wine were obscured by the dry and dated design of wine websites in Japan. While the e-commerce platforms that dominate the space may have better designs, they are content to sell the same old package of 6 bottles of wine for $50. It’s nothing new and nothing special. In short, online shoppers in Japan only see a small part of the vibrant, versatile world of wine.

In 2021, Federico co-founded Swirl to change things, and refresh the offering of wine in Japan. Swirl sells exclusively imported wines from across the world direct to consumers in Japan. Their focus is on their Wine Club, a wine subscription box service.

To support their offering, Federico uses his expertise to sell wines direct to businesses like restaurants and hotels too.

Japan’s online wine market needs refreshing

Despite Japan being the world’s sixth-largest importer of wine, Federico explains that the online market can be disappointing.

There are 3 areas the online wine market in Japan lets the majesty of its product down. Firstly, few websites focus on design and UX. A smooth, good-looking website helps consumers connect to and understand the product. It’s missing in Japan. 

Also, Japanese websites don’t convey the story of wine. Consumers have no way to know the backstory of the wine and the hard work that went into making it. But this is an essential aspect of the wine experience.

Finally, the social, human aspect of wine is missing in Japan. The websites are practical and they don’t facilitate interaction or community around what is a very social product.

Swirl is all about doing things differently to address these shortcomings. Using an innovative subscription service and a beautifully designed website, Swirl is uncorking potential for online wine sales in Japan.

Putting the “Service” into subscription service

Federico is a passionate oenophile. He explains he wants customers in Japan to experience a journey through wine. A journey does not start and end in a single bottle of wine, however. It requires trying and experiencing many different wines. For Swirl, a subscription model is a perfect way for consumers to learn about and appreciate wine by trying different types.

Practically speaking, subscriptions are a reliable source of revenue. But they help us achieve our big goal. Through our subscription boxes we introduce wines and their stories to our customers. Over the months they learn how to enjoy and appreciate wine. 

As we discussed in an interview with Le Comptoir, D2C subscription services are still novel in Japan. Yet, Federico is excited about the potential they offer to build relationships with customers.

I’ve spent most of my career in Japan. I know how important relationship building is for business. Subscription services offer the opportunity to have regular contact with customers, to build a connection. 

For Swirl, every month is a fresh chance to impress customers with outstanding service.  

I’m used to the high levels of customer service and expectations here. I apply this approach to our subscriptions. For example, I will send handwritten notes with the wines to customers. It gives a personal touch that is often missing from online sales. 

Not only notes, but Swirl gives customers special offers, seminars and extra digital content to help them explore the world of wine further. These kinds of extras are a key aspect of D2C subscriptions. Happy customers become fans, and fans make for long-term customers.

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Keeping D2C sales fresh

As we introduced in our first post, novelty - keeping the service fresh - is important for D2C subscriptions. Federico’s wine offering does this naturally.

The wines we import are exclusive to us. We work very hard to meet with and review wineries. Our customers can be assured of the quality of the wine, and the rarity of the offering.

We also use standardized pricing for our wine club options. Two wines a month costs $60, and four costs $120. But when you add up the value of the bottles you receive, the cost performance is very high. Customers get consistently high quality and are introduced to new and exclusive wines through our boxes, at a great price.

Swirl have received feedback from customers that they love the quality of the wine. 

Every box is quality, but sometimes there’s a real standout gem. Our customers love the value they get.

Subscription has additional benefits here too. Subscribers like to share wines they enjoy as gifts with friends. This gives Federico opportunities to provide value through discounts and encourage repeat purchases.

The social aspect of wine is another area where Swirl can offer value to consumers in Japan.

Wine is a product that you enjoy socially. One of the extra benefits we offer our customers is events. We regularly hold wine tasting events for our customers to get together and enjoy conversation and great wine. 

Activating your customer community in D2C has many benefits. For one, Federico can talk directly with his customers when they come to events. This is an opportunity for feedback, honest discussion and for consumers to feel a connection with the Swirl team.

When we meet face to face, our customers know me and can learn more about why we do what we do. This creates a connection with consumers in Japan.

Wine tastings are also part and parcel of the experience of wine. Federico chooses premium venues with pleasant atmospheres.

Our events are a special experience. Warm environments, great wine and conversation with a like-minded and curious community.

The power of welcoming design in Japan

In addition to subscription service novelty, Swirl have invested in creating an online experience to stand out from the crowd.

Online wine sites in Japan are spartan. Practical. They put no love into UX or design. Of course, these components are expensive in Japan. But an attractive design helps to tell the story of wine. It helps to make the wine and its information stand out. 

Ryan Walker, the co-founder of Swirl, created their outstanding website. The company invested in beautiful design and UX in order to wow consumers. Beyond wine fans, great design helps them to reach consumers who do not normally buy wine or those who would get their vino from the konbini. 

A welcoming design makes wine more accessible. Our website is colourful and friendly. It balances white space with information. Through UX, we overcome one of the biggest barriers to wine - the complexity of the product. We try to use simple expressions and make our wine easy and enjoyable to learn about.

UX conveys part of the special experience when shopping for wine online. Venturing into a wine store and picking out a bottle of wine is an experience. It has an atmosphere. Online shopping should feel special too. We want customers to enjoy their time on our website and the pleasure of selecting a wine.

Federico’s target customers for subscriptions are people in their late 20s and 30s. This is the age where people have more disposable income and often seek new experiences. Wine is often seen as a more mature and rewarding way to enjoy alcohol. Swirl seeks to cater to a generation of digitally savvy millennials who also have high expectations for online experiences. So far it is working well.

The majority of our customers for our Wine Club fit our target. Given that we launched our business during the middle of the coronavirus, we’re grateful for the level of interest we’ve received. Our customers in their 30s are either fans of wine already, or those looking to elevate their wine experience from the $15 to the $25 - $30 dollar range. I believe that our design and welcoming brand mean we’re converting a lot of these exploratory customers. 

Like good wine, Swirl’s story is worth sharing:

In Japan, telling the story of wine needs a personal touch

Wine is unique. Each year it is different. Sometimes it’s an exceptional year, sometimes it’s a bad year. Changing weather, and changing challenges produce very different wines. Of course, when you find the wine in a supermarket, you don’t think about the hard work that goes into making it. On Swirl, between the moment you pick the bottle and pay for it, you already get in touch with the people who are behind the bottle.

Federico interviews producers of the wines he imports. He writes concise and colourful explanations of each wine in addition to basic stats for each bottle. The result is dedicated pages for every wine on Swirl. Product information, such as flavour profile, grape varietal and how to drink, is displayed concisely in tables. Copy for each product focuses more on painting an engaging picture of the wine and its origin.

In addition to telling each wine’s story, Swirl’s website uses one of the most beneficial tools of D2C to make the ordering more personal.

When customers make their first order, they fill out a questionnaire about their preferences. The questionnaire is responsive to the novice, first-time buyer, but also fans of wine. This questionnaire gives us really valuable data for marketing. It also means each customer has a unique experience of discovering new wines that suit their tastes.

The challenge of pioneering a new model

Federico launched his business during the heart of the COVID-19 pandemic. 

We launched right in the middle of the COVID-19 pandemic. So, we weren’t able to offer social events for example. We had to wait to really start building our community. Since in person events started again, we’re seeing a lot of interest in our events now.

Pandemic aside, Federico explains that starting a D2C business in Japan is a big investment in time and energy.

We want to deliver an outstanding experience to our customers. We want them to receive a box and be like “wow, this is a really great service” and to feel pleasurable curiosity about their wines. This takes a lot of work of course. We invest a lot of time in researching, tasting and selecting only the best wines. This must be fit in around our day to day operations.

The nature of D2C business is that it empowers owners to be in control of all aspects of the business. When starting out this can be a lot of work. For Federico, it’s worth it.

I love this industry, and I love receiving feedback from customers who fall in love with a bottle of wine we send. That’s why we’re doing this. 

Federico reminds us you must also be ready for critical feedback as a D2C founder.

Sometimes something doesn’t go right, and you have to be ready for some negative comments from customers. For this you need a heart of steel.

But like the good and bad years for wine, the ups and downs are all part of the D2C business experience.

Ultimately, we’re lucky to have such a close relationship with our customers. It helps us to continually improve the quality of our offering.

That’s a wrap

We’d like to thank Federico and Swirl for supporting this interview. It was a joy to learn about the ins and outs of transforming direct-to-consumer wine in Japan.

We’ll be back soon with more Market Brew to explore more of the forces that are shaping the food and beverage industry in Japan. Stay tuned.

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