San Rafael, Calif.
TastingRoom.com founder Tim Bucher says the partnership with Lot18 will allow him to focus more on the reformatting side of the business.
—TastingRoom.com, the online retailer that employs patented technology to give consumers taste-size bottles of wine, has entered into a marketing partnership with flash wine seller Lot18.
The Santa Rosa, Calif., based TastingRoom.com
is closing its own online retail operation and will instead focus on managing its system of transferring wine from 750ml bottles to smaller 50ml samplers and 3.4-ounce single-serve bottles. The company currently offers wine for sale in the 50ml, 3.4-ounce and full 750ml bottles.
Company founder Tim Bucher said he’d always admired the marketing prowess of Lot18
, and the agreement lets him focus on managing the reformatting side of the business while Lot18 handles sales. “There’s a great marketing partnership there,” he said.
Because TastingRoom.com handles and bottles wine it’s a bonded winery, and Bucher said Lot18 will now serve as its marketing agent. “To me it seemed like a real natural synergy,” he said.
Lot 18’s wine club
Lot18 and TastingRoom.com’s marketing partnership comes at a time when the New York-based Lot 18 is transitioning away from solely offering daily deals to its clients. The company unveiled a wine club where members receive six bottles every three months for $99 plus $9.99 in shipping. The first shipment costs $49.
Part of the transition included laying off 25 staff members and choosing new leadership. Olly Garland, the former CEO of Direct Wines, who manages several wine clubs including The Wall Street Journal
’s club, joined the company’s board of directors, and Lot 18’s chief marketing officer, Jay Sung, was promoted to CEO.
The company has been posting fewer flash offers as well. From January to November of 2011 Lot 18 made 676 offers, but that figure had slipped to 414 for the same period in 2012, according to WinesVinesDATA.
Bucher has said he viewed TastingRoom.com as being distinct from flash sites, which he views as unsustainable businesses. “I still believe it’s a race to the bottom and all of them are having to evolve their business models, which is good for consumers and good for merchants,” he said in an email. Bucher said he gives Lot 18 “major kudos” for changing how it does business.
He said he’s not sure if TastingRoom.com will retain a unique web presence after its retail operation closes. Bucher said that during the past two years the company had built a solid pool of paying customers that numbered in the “six figures,” but he declined to be any more specific about its customers or sales.
A Lot 18 representative who asked only to be identified as a spokesperson said, “We’re making Lot18 products available to TastingRoom.com customers and TastingRoom.com products available to Lot18 customers.”
He said the specifics will be worked out over the next couple of months, and the changes should be in place by the end of the quarter.