The Final Chapter in the Kamphuis Wine Commerce Trilogy — Commerce7

I’ve worked long enough in this industry to experience the majority of its digital transformations. More importantly, I’ve been fortunate to work with some of the most exceptional wine technologists to work in the wine industry: James Jory, Matt Franklin, Aaron Rutledge, Joseph O’Connell, Patrick Angeles, Stephen Gillett, Eric LeVine, Doug Cook and so many more. Of course one of the most well known and most successful in our industry is Andrew Kamphuis. He was the CEO of K-1 Technologies that build E-winery and then moved on to start Vin65.com before it sold to WineDirect where he successfully led as President. About two years ago I lamented his exit from the wine industry after leaving WineDirect. He was part of a massive exodus of technologists, and I wondered if we had hit a tipping point of no return. But as I was working on the 2018 DTC Vendor Prism, I learned that Andrew was in stealth mode building another DTC platform: Commerce7.

I can say a lot about Andrew (most of it good — LOL), but without question, there is one absolute truth; he’s been there and done that in the wine commerce space twice over. There’s probably is no other human on this planet that knows winery commerce better than him. He’s a true expert in this category, and I’m glad he’s returning for the third installment of his commerce trilogy. He’ll be able to take all the lessons learned and apply them to a fresh canvas with new technologies. This will allow him to charge ahead one more time to help wineries better sell online. God knows we need it. I was in a winery conference the other day with over 75 large wine groups, and I asked them to raise their hand if they were happy with their DTC technology partner or fulfillment house: no one raised their hand.

One of the benefits of the wine-tech space being so small is that most of us are good colleagues and sometimes even friends. I recently had the opportunity to bend Andrew’s ear with some questions about his new venture, the future of wine online, and the nature of being a wine-tech company. Enjoy.

Why the name Commerce7?

Because it might have been in bad taste to do Commerce65 :)

Truthfully, I believe there are seven transformational technologies that are evolving DTC commerce. Our platform intends to reflect those in upcoming evolutions.

Why have you come back to wine 3x? There are plenty of other industries, what keeps drawing you back here?

Ha! I sometimes ask myself the same thing. When I left WineDirect I wasn’t thinking of coming back to the wine space. I left to spend some time in Mexico and Costa Rica and focus on tech, learning, and doing a lot of things that I walked away from when I was president at WineDirect.

I have a real passion for retail and technology. I was playing around with machine learning and I wanted to bring that to small businesses to help them market better. I was hoping to bring that back home to Vancouver. I must have met with 50–100 retailers. Most small retailer’s data is a mess or they have systems that can’t talk to other systems. Small businesses tend to have the same issues as wineries. So to start we needed to build a transaction system to help clean up their data and open it up before we could do any machine learning on their data.

Along the way I kept getting calls from wineries. At first, I pushed back on everyone that called (if you’re one I pushed back on, I apologize). Over time I realized that all my connections were in wine and that what I was building and my end goal worked well for wineries.

What makes C7 different?

The technology is miles different from what we were doing last time. We learned a lot from the past (No more ColdFusion!). The new architecture is stateless, all microservices, and extremely fast. But the important thing is what we are doing for our clients.

We’ve doubled down on the customer and creating better customer experiences. The future of retail is around experiences — we are seeing this everywhere. Our club tools and ecommerce experience are the best out there. Apple Pay, GooglePay, full internationalization, a new way at looking at customers, modern clubs, etc.

Another big difference is that we are 100% API based. This makes the software open and interoperable and allows for connections into other tools and programs. We are already seeing some great integrations being built.come from.

What is the hardest thing about building a wine focused software?

Starting Vin65 it was cash flow. When we only had 20–30 customers in the beginning it was hard to pay the bills on monthly fees. We did a lot of things just to help cash flow.

As we built Vin65 it went from cash flow issues to decision making issues. Should we sign a partnership or not? Should I have sold or not sold? Most of the time you only have part of the information but as the president you have to make decisions.

Starting Commerce7 it was figuring out what we wanted to be. You can only be the best at one or two things. Especially as a small company. Today we are doubling down on the customer experience around ecommerce and club.

With wine commerce, what is the hardest feature you’ve ever had to build?

There is nothing that is technically challenging in any of our code. As for what’s the “hardest” (as in the toughest decisions), it’s probably something simple like having a pickup order that now becomes a ship order. Everyone wants to handle that differently.

What was the feature that you have built (at any of your companies) that you were the proudest of and why?

At the time we built it, I was very proud of Action Emails. I spent two weeks in Mexico on vacation building that. Today marketing automation is everywhere so it’s not that big of a deal anymore.

At Commerce7 I’m proud of all our club tools. User choice is very slick. Club processing is fast (almost too fast). Customer experience with our club is great. There are some hidden nuggets in clubs that will come out over time that I’m excited about.

What is the future of wine online? In your opinion are the greatest challenges with wine online? In your opinion what are the greatest opportunities?

Consumers are going to continue to buy wine online and it’s only going to get bigger.

The challenge for a winery is how to be relevant. Why should I as a customer buy from a winery when I can get wine from a retailer that has better selection, better pricing, and potentially has some amazing things around finding me the perfect product. Why does a customer in Minnesota care about a winery in California?

Opportunities for wineries are endless. Naked Wines and Club W / Winc came from nowhere to do some big things. As a producer, a winery has this ability to go deep with their customer relationships, create experiences customers love, and use this deep relationship to build loyalty.

Today’s customers buy first for experience, then for product, then for price.

Which brands do you most admire online (not wine)?

It’s drifting but I had a lot of admiration for Dollar Shave Club. Fantastic marketing. Simple process.

I want Commerce7 to be like Shopify.

What are your thoughts on the subscription economy and how it relates to wine?

Wineries have been doing wine clubs since the 70s (maybe earlier). They should be the ones leading the subscription economy but we (wineries and winery software developers) seemed to have gotten stuck focusing on the product rather than focusing on the customer.

Take something simple like summer shipping. A winery won’t ship their club in the summer yet customers still drink wine in the summer. Are we being product centric or customer centric here?

Today’s subscription economy has put the customer in control. The customer controls their Blue Apron account, their Birch Box, their Dollar Shave Club, etc. Wineries are going to need to hand over control of their club to their customers and they will succeed.

Talk to me about the holy trinity of DTC (ecom+subscription/club+POS). Why hasn’t this been solved yet? Are you going to solve it?

Vin65 has come the closest to a solution here.

For a long time there has been a lot of small software players. All of them trying to make a little bit of money. It’s hard to put a POS and ecomm and club software together. Especially when some of the technology is web based and some is traditional programming.

The problem today isn’t about putting the system together. I think that’s been solved. The problem today is handling real problems and creating workflows that make sense. Some wineries are driven by accountants and they want transactions one way. Other wineries want it another way. Solving this is tough.

At Commerce7 we haven’t launched a POS yet — but if we did I’d like to say we are going to solve it — but in reality, we are just going to up the bar and also create a new set of problems :).

Why do you think the wine industry has not adopted digital in a strong way? How does this impede the success of companies like yours?

Small and mid-size wineries are often like small and mid-size retailers. They are busy and they are focused on what’s in front of them. That’s their tasting room or shop. They are all about creating a great experience in their tasting room — but when it comes to digital it’s hard to understand how to create a great experience online. Also, the price to create a great experience online is often large.

What do you wish you could do with Commerce7?

I want to make a difference. When wineries use our tools and succeed that gives me a lot of satisfaction.

I want to see a winery use our tools and really break out. I want to see wineries in general have 50% of their business come online. (William Sonoma has 40–50% of its business online and it’s in a comparable category to a lot of wineries).

What other digital tools does the wine industry need built?

The wine industry has a lot of tools — but a lot of them are old, don’t play nice with others, or they are feature light. Today’s wine ecommerce tools don’t compare with Shopify. Today’s wine reservation tools don’t compare with Tock or Open Table. The club tools today don’t allow for a modern club.

The wine industry needs a more modern tool set — or they need some of the big players out there to tailor their software towards wine.

Amen. Glad to have you back Andrew.

Good to be back.

Questions about Andrew Kamphuis’ vision, software or about winery commerce in general? Comment below and both of us will answer.

PS — I know I promised a different blog post next but this interview was so timely with the results of the SVB DTC Webinar coming out on Wednesday (http://svbwine.blogspot.com/2018/05/last-chance-svb-live-dtc-videocast.html?).

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