Tom Walenkamp: Definitely anti the gatekeepers we saw that took what is a product that a lot of people love and made it potentially more complex or more confusing or more intimidating than it absolutely had to be. Our personalization engine facilitates safe discovery. We don't like to over optimize our marketing to make it such high converting materials that we're acquiring customers that don't necessarily want to be a customer.
[Ad]: Welcome to Add to Cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast moving world of online retail. Here's your host, Bushy. Welcome to another episode of Add to Cart. I'm Bushi and I'm joining you from the land of the terrible people otherwise known as Brisbane, Australia on Add to Cart. We welcome everyone to share and listen to e commerce stories. The more diverse the better. I want to especially welcome the traditional owners and the original storytellers of the land that we are on, our indigenous and Torres Strait Islander listeners to join us in our e commerce conversations and our community. Now, speaking of community, we are excited to have the Add to Cart campus open for access. What's the Add to Cart Campus? I hear you say. Put simply, it's a learning community for e commerce professionals and it feels like it's what we've been building at Add to Cart for for many years. Free to Join Campus has lunch and learn webinars, the latest e commerce resources, a job board, and a heap of ways to learn with industry professionals and your peers. Whether you're an e commerce manager, a founder, or simply finding your path to a career in e commerce, we'd love to see you in there. Register to join campus@addtocart.com There are some products and categories that have a reputation for being inaccessible, you know, really hard to understand and only for those that are in the know. Art is one example and another is wine. And haven't we all gone into a bottle shop and been baffled by the massive amount of wine choices? I mean, judging on a label, is it all that bad? My guest today identified this problem and set out to solve it by creating an interactive wine subscription service for for novices and aficionados alike. Tom Wehlenkomp is the co founder and CEO of Good Pear Days, a company that has built a custom personalized engine to deliver expert wine curation specific to your tastes. In their words, it's like you've got a best mate who's an award winning sommelier. Did I say that right? Sommelier in your pocket. A decade after launch, they now have over 65,000 thousand subscribers and were dubbed the Netflix of wine by Vogue. In this chat, Tom shares how they've taken their personalization recommendation engine to the next level. They were one of the first to use personalized data in a way that uses machine learning well before AI was popular. Tom also shares why their focus prioritizes customer satisfaction and value creation. And we hear all about their exciting plans to launch a physical space for wine. Not a bar, not a bottle shop. Something a little bit in between and quite unique. Tom also gives us an inside tip for ordering wine in a restaurant. Cheers to that. So, thanks to our partners, Shopify plus and Deliver in person. Here's our conversation with Tom Weilinkamp, co founder and CEO of Good Pair Days. Tom, welcome to Add to Cart.
Tom Walenkamp: Thank you for having me, mate.
[Ad]: Great to have you here. You are described as the chief wine drinker. We're recording this at 11 o' clock in the morning. Does Chief Wine Drinker extend 2am hours?
Tom Walenkamp: It has in the past, but not anytime recently, especially not since having kids. So those days, they're past me, unfortunately. But when the occasion arises, there's always an excuse.
[Ad]: You've always got to taste the product, don't you? Well, congratulations. I know we've tried to line this up for a little while and you've had new additions into the family, so congratulations there. It must be a wild ride at the moment, being a founder but also parent of young kids.
Tom Walenkamp: Yeah, thank you so much. It's our third, but so I guess you can't say you're used to it because everyone adding to the mix is always another step. But it's going well so far, so thank you for that and thank you for being accommodating, mate.
[Ad]: Of course. So Good Pear Days. For anyone who doesn't know Good Pear Days, and I don't know how you would. It strikes me as almost anti wine industry. Been around for 10 years now and when you first came onto the scene, I do remember looking at the Good Pear Days site and going, oh, this is different. This is very different. Did you go out with the intention to be anti wine industry?
Tom Walenkamp: No, not anti wine industry as a whole, but definitely anti the gatekeepers we saw that took what is a product that a lot of people love and made it potentially more complex or more confusing or more intimidating than it absolutely had to be. And so we're definitely trying to cut down some of those barriers to. To make it more accessible, to make it more approachable, to teach people that you don't have to be intimidated by wine and that it's here to be enjoyed. And so definitely some of the. Some of the marketing tactics, some of the perceived elitism, definitely attacking that, but not the wine industry as a whole. You know, the people that grow the wine and make the wine and winemakers, we. We couldn't do what we. We do today without those wonderful people. But some of the marketing practices and some of the. I guess gatekeepers is the best word, is where we thought we could make a difference.
[Ad]: Yeah, I like that word, gatekeepers. It's almost like you've made wine accessible to a new generation coming through. So for listeners who may not have had the good Pear days experience, can you talk us through how it actually works? Because it is fascinating from an e commerce perspective in that you choose the wines or the product for the customer, rather than the customer selecting their own. Can you talk us through how that works and how you came up with that idea?
Tom Walenkamp: Yeah, well, I guess the genesis of the idea was that when you walk into a bottle shop and there's some of tens of thousands of bottles of wine to choose from, that can be a very intimidating experience for someone that doesn't necessarily know exactly what they're after. You know, often you just stick to something you've had before, or you end up choosing by price or just by pretty label and, you know, there's nothing wrong with that.
[Ad]: Guilty.
Tom Walenkamp: Yeah, exactly. I think everyone. Everyone faces that. You know, most people face that same dilemma or difficulty in ch a wine. And so really what we wanted to do was to find out your preferences in terms of, you know, whether you like red or white or rose or sparkling, generally what you like to pay. And let's look kind of like, take that out of the equation, and then let's use your taste and what you like and what you don't like to really make some suggestions and some selections for you so that you can sort of get outside that comfort zone, but still having the security that you're pretty much hopefully going to like. Like what we send you. We call it safe discovery. So our personalization engine facilitates safe discovery.
[Ad]: I love that term, safe discovery. That's cool.
Tom Walenkamp: You also don't want to just completely buy something completely random and then realize that actually that's not to your taste at all because that's, you know, it's a waste of money. And we know every dollar is precious. So you don't want to take too big a risk on. On your Friday night or your Saturday night and, you know, spending 20, 30, $40 a bottle and Then realize, actually this isn't something that I enjoy that much. So that's why we want to discover new things. But we. The safe discovery makes it impossible, I guess.
[Ad]: And has your rate of safe discovery got better as you've learned more about your customers? Like, has there been a difference between customers at the start, like, this one's for me, or like, right towards the end where you've kind of nailed it?
Tom Walenkamp: Definitely our recommendations have gotten better over time, and that's just thanks to how much data we've got over time as well. I know you said you might have a question about how the recommendation engine works, so we can kind of jump to that a little bit and how that's developed over time. But it's relevant because in the early days it was very much Banjo and Beto and I looking at people's ratings of their wines and making recommendations ourselves. Especially Banjo, being a Chief Wine officer, was spending days and weeks in the end on actually just selecting wine, as
[Ad]: in manually selecting it.
Tom Walenkamp: Yeah, that's how we started because we. We hacked it all together on Shopify using Typeform. And even for the first box, I had this, like, spiderweb. I almost broke Typeform in those early days because I had this, like this quiz which then, depending on your answers, recommended a certain box for you. And it took an hour for the Typeform to load. I'm sure I could handle it a bit better. This is like, yeah, nine years ago now or something. But then the very first algorithm we built was very much a simple algorithm like regression. You know, if you. What's the percentage? If you like this, what's the percentage chance you're going to like that and just spitting out kind of like a formula for the type of wines you like. And then over time that got smarter until eventually we. It was in 2019, we killed the algorithm, the formula we had built all together and started from scratch with machine learning. So that's where we basically just fed all your quiz answers, plus all your ratings of all your wines, plus all the tags and details we had on every bottle that our wine team would do. And we fed that all into a big machine learning engine to help us make these more advanced recommendations. And that was a big step, and it's probably a step backwards for a few months until we got enough data flowing through that, enough ratings going through the system, enough wines. But then it started to really get better and better. And so I think we've got something like 90% rating accuracy now. And the way we judge that is if we recommend a wine bottle to someone and whether they say they like it or don't like it, we then judge whether that's a successful recommendation. And so I think in the early days when we first relaunched that, it started off in the 70s and then after about 12 months, I think we're in the 90s.
[Ad]: That's awesome. That's cool. I love that you started manually because on the outside it didn't look like that. And there's that whole thing of startup. Right. Is like you make it shinier on the outside than what it actually is. And there's a lot of grunt work behind the scenes when you're at that stage.
Tom Walenkamp: Yeah, exactly. Actually, Beto, our third co founder, he's a genius programmer and he actually. One of the reasons he decided to join us in those early days was because we had started and we had some traction and we had this demand and we showed that. He's like, wow, there's actually something here already. Without pretty much not much technology, apart from what you can get off the shelf at that point. And really, you know, that was a really positive sign for him to come on board and build all the tech behind Competos.
[Ad]: That's awesome. So you've been on the machine learning and AI, let's put it in the same kind of wagon there for a lot longer than most, especially in E commerce. How have you seen that change and evolve over those years, especially say the last two years where we've seen it become much more accessible and almost expected of businesses to use. Has it put you in a position where you can use it more intelligently or do you find that everyone's just catching up now?
Tom Walenkamp: The AI we use is very much a product recommendation AI, so it's a bit different to the language models that have come out in the last couple years where it's put it in a human voice and things like that. In terms of pure recommendation engine, we would compare ourselves more to like a Spotify song recommendation engine. You can see that really hasn't changed too much since the new models have come out. You can just wrap it up in a DJ that talks to you about it a bit more now. But the core recommendations for Spotify, that's kind of the path we had gone down where kind of seeing all these ratings, you're seeing what other people like, what playlists people are creating. And very much that's what we were doing and the way we decided to build it as well. And so that technology has been around for a while and it's Basically how you feed the right information to it that gets you the best results. So not just the ratings of the bottles and the quiz answers and everything, but the US tagging each model intelligently to make sure that that gets fed in as well. And then when the machine learning can see the comparisons between different people, so it can actually say, you know, this person likes 10 of the same wines that you love and they have this 11th bottle which you haven't tried. But we can see that all that stuff, it starts to get a lot, a lot more accurate from having all that really rich data from across all the customers that you have whilst being completely private and no privacy concerns at all. It's just getting fed into the recommendations. But in saying that, I think that the new models are making it a lot easier to explain why you might like something or explain why you might have been recommended or if you like this wine, what's the reason that you might like that? So it's adding that level of next step of customer education and understanding around the recommendations which I think is really exciting.
[Ad]: You know that nervous feeling you get when you place your checked in luggage on that airport baggage machine? You're kind of just hoping that your luggage arrives at your destination on time and in perfect condition. It's the same in E commerce. You place a lot of trust in your last mile partners to deliver the final crucial element of the customer experience. Now imagine you are a premium product with over 100 years of customer experience expectations. That nervousness increases a lot. That's why Samsonite has chosen Deliver in person for their reliable on time delivery to drive outstanding shopping experiences, enhance brand reputation and significantly improve key delivery metrics. I mean, you can never be too careful when it comes to making sure luggage arrives on time and undamaged. Don't settle for less. Make your last mile experience the first thing that customers remember. Learn more about the incredible performance uplifts Samsonite has experienced since working with Deliver in person@deliverinperson.com casesampsonite. You've got a really unique tone of voice and way of talking about wine. You know, exactly like you said, taking down the gatekeepers and being approachable there. Have you tried to train up a language model on how to speak like good pair days? Is it possible?
Tom Walenkamp: I did one myself when those custom GPTs came out and I trained it. We have a tone of voice document that we put together many years ago now to try and make sure the team could keep up with the brand and tone of voice that we created for for the brand and so I fed all that into it, Fed a bunch of our copywriting and a bunch of our marketing materials and things like that. And it does a pretty good job, to be honest, because I don't have to retrain it each time. It's not perfect. I think you still need to. Still need to play around with it. And it's not good at writing new jokes, that's for sure, because it's getting more and more difficult. We have a unique joke on every box that we send out. So over the years now it's like 100 jokes related to wine that we've had to do. That gets quite tricky to have a short, concise joke on the. On the box that is unique. So we try to get it to help with that. But that still needs a bit of human touch at this stage.
[Ad]: That's funny. So do you have 100 variations of boxes with different jokes on them that you can pick from, or do you
Tom Walenkamp: kind of cycle through, recycle three. So over the years, I think we've done probably close to 100 different jokes, some better than others because. But I think we haven't quite given up on that. So we do repeat jokes every now and then, because if we haven't used it for months or years and then we're happy to do it again. I think some people, you know, if you hear a good joke, you can hear it a few times. And also now we have more complexity over the different box sizes, so it does get a little bit trickier. We don't want to spend all our time just optimizing the joke inside the box rather than having great wines and a great product. So we have loosen that up a bit, so you might get a repeat here and there, but we try to keep variety in there.
[Ad]: That's pretty cool. What's your relationship like with wine producers? Because I can imagine it's very different, obviously, in how you've positioned yourself. But also, you know, you talk about some of that data that you've got. So I can imagine when you have those early conversations with producers, that you can go in there with a whole bunch of data around all your customers and go, I think there's a really strong appetite here for your product. Based on what we're seeing. They must be blown away by some of the data that you can present to them early.
Tom Walenkamp: We also get written reviews that we are public as well. But we. So we have thought about doing, you know, those mean tweets that people read out, like mean reviews or something like that. But we haven't quite got there yet. So you do have a lot of rich data about, about all the wines and, you know, majority of it overwhelmingly positive. But the way that, that I guess manifests itself is that we can buy at a scale up front that the winemakers generally can't have access to otherwise. So a winemaker, they're big guys, they sell to all the big players and that's fine for the big guys, but for the small to medium guys, they generally sell through boutique bottle shops or to restaurants and bars. And a lot of the time that's done through a distributor where the distributor will buy the wines of consignment and then as they then sell it case at a time to different bars and different bottle sh. Shops, then the winemaker gets paid. It's not always like that, but that's a lot of the time it's like that. Whereas what we can do is say, look, we are very confident that this wine is going to be in demand and we can buy, you know, 100 times in one go what whether it's distributor will give them as they, as they, as they pull down on their, I guess, allotment. So we can actually give those winemakers that big block of purchasing and guarantee it basically. And that, and that allows them then to reinvest in the next vintage. Gives them a lot of certainty around how much they're going to sell and whether they're going to be holding on to it. And that obviously is beneficial for the winemaker, it's beneficial for us and more so for our members who we can then pass on great pricing to and other benefits like that and access to wines they wouldn't otherwise have got access to.
[Ad]: Yeah, absolutely.
Tom Walenkamp: And then we do obviously pass back trends and things like that to winemakers as well. But it's a bit tricky because you don't want. Winemakers are kind of like artists sometimes. You know, they're the ones that want to be creating the trends, not necessarily following the trends. So it a balancing act.
[Ad]: Yeah, yeah, yeah, that makes sense. And because you're so much about discovery, do you keep a lot of the same wines, the popular ones, in stock and, you know, recurring, or is it that. What's the balance between. If people find a wine that they really love, they love and do you kind of keep sending that to them occasionally or is it. No, we've got to keep surprising you and delighting you.
Tom Walenkamp: We've built a rule. So there's the recommendation engine, but there's a. Built a bunch of rules around it. To make sure that it works properly from what we've learned from what customers want, you know, like, in terms of, like, what grapes they don't like and what color preferences and price preferences. But one of our rules is that we don't do repeats of the same bottle because otherwise the funny things can happen with recommendation engines. It'll say that you liked it. So then it's saying, oh, my job is to recommend the wine that someone likes. It's already said they liked it. So we're going to keep recommending the same wine. So you've got to put a bit of. Yeah. Rules around it to make sure it's doing what you want. And one of them is, like I said, we don't recommend the same bottle so they could get the next vintage because that technically comes in as a new bottle. But as you know, vintages do change. And so that's not necessarily the same wine. But I will say that our biggest challenge is getting that balance right between recommending new bottles and having enough variety to feed into the recommendation engine, but then also holding onto wines for long enough that customers can come back and manually select wines that they have liked previously in their box. And that's one of the biggest challenges, because often we'll. We'll just move through a wine really quickly and then customers will try it a month later and realize that there's none left on the site. And also if we've worked with some of those smaller producers, there's none left anywhere, so they can't actually get. So that can be quite frustrating for customers. And something that we. We're constantly trying to get the balance right, even so that we put rules that we only recommend down to a certain stock level so that we can try and judge that that wine will last at least a few months on our website, so customers can come back and buy and try to get that balance right. But then it changes by season and changes by grape type and changes by color. And so that's. That's actually quite, quite tricky. And I think that one of the keys is that when we make a recommendation, say you've got your monthly subscription and we recommend your wines, our members can then go in and they can keep those wines or they can add more wines, or they can add their own bottles and delete those wines. That probably happens around 50% of our customers will edit their box, and that includes customers that keep their recommendations and then add more. Or they might change one recommendation or they might be in the mood for something else and they change it Themselves and that is a key part of the subscription, that customers actually have that flexibility. So they've got the recommendations but then they know what they feel like and they can go in and make those changes. So that does create that dynamic where there's demand as well as recommendation.
[Ad]: Do you think that's what helps make the membership so sticky? That there's this period of anticipation and engagement before you even get the order? So it's not like you just get shipped a box every month, every quarter, it's like, we've got one coming for you, it's almost ready. Do you want to come in and have a look? Do you want to play around with it before it arrives? Like. So it's not a hands off membership?
Tom Walenkamp: Yeah, I think so. I think so. You know, wine's very interactive already in terms of people wanting to learn about it and see what's, see what's new and read about the winemakers and try new things. But yeah, when we make the recommendations, I think that is an exciting time for people to go and actually see what has been recommended for me. But then yeah, they can play around with it and make all sorts of changes or they can go in and add bottles they want in advance and so that they know they're going to get their recommendations. But they've already reserved a wine for up to a month or so so that they can, because that's going to be added to their box as well. But then everything we've built around it, in addition to the recommendation, it creates that engagement as well. Like we've got this badges and rewards program so the customers can keep track of everything they've tried and they get rewarded for trying new things. And so you can, you get badges for trying new great types, new regions, new production methods, all sorts of things like that. So you can actually see what you're trying and you can tick things off and you can make sure that you're exploring as much or as little as you want along the way. And then you get, you get, we get people points for those for accomplishing things like that and then they can use those points in our reward store to get cool, cool merch and other wine related products that they love.
[Ad]: I just had this funny image of, you know, not being good at athletics and not having a lot of trophies or things in the cabinet. But hey, look mum, look dad, look at all these badges that I've got for trying different wine. Aren't I talented?
Tom Walenkamp: Well, you know what people do show off their passports for how many stamps they have from, from different countries. So I guess it's, it's, it is similar like that. It's still an accomplishment, trying new things. I guess it shows that you're an explorer and then we have levels actually. So as you collect points, you level up and you've got a wine explorer and wine rock star and wine guru and things like that. So it is a bit of fun for customers to stay engaged as they go on their wine journey.
[Ad]: That's very cool. And that functionality, I can assume that you can't get all of that off the shelf because subscription is so core to what you do. Are you building that or are you building it on top of something?
Tom Walenkamp: We made the call in the early days, once Beto came on board that we were going to build it ourselves. What we saw then was that, and I love Shopify because that's really what I built the MVP on. But we realized that we really couldn't do what we wanted to do. Yes, there's subscription billing software and there's some recommendation products, but where our products gone over those years in terms of integrating a much more detailed level of recommendations through the machine learning, the reward system, the wine profile. So we've got your wine profile, what you like, what you don't like, the customization and preferences around where you can choose how many wines, what color and what price point and what not to get sent. All that's still, from what I can say, not available. And we've had the Shopify reps and the enterprise teams talking to us and convince, trying to convince us to come over. And I would love to because I love Shopify. But when you get down into the detail and they see what we've built in the background, you can see their eyes go, oh, this isn't going to be possible unless we really want to remove a lot of our core features.
[Ad]: Yeah, you've essentially built a subscription ecosystem there, haven't you? Like, that's pretty unique experience. My mind was ticking over as you were explaining, especially around substituting in and out different varieties and also, you know, having a limited period, one year, you know, growing season for each. It's probably very similar to fashion in a way in terms of the terms turnover and the replenishment. Have you ever thought about repurposing what you've built there for a different industry?
Tom Walenkamp: Not. Not necessarily fashion, Because I think there are some that do something kind of similar, like stitch fix, where there's a lot of information on them and how they do it. And I think Stewart, for them at the end of the day comes down to the buyers have a lot of, a lot of influence over making individual recommendations. But we have thought about it in other areas. Craft beer is one that we think is potentially very promising because when I probably started good pair days when we started it, the range of beers was already growing back then. But I guess in the last nine or so years, there's so much variety now that actually some safe discovery and some recommendations are a lot more. Would be a lot more useful in the craft beer space for something like whiskey or gin. Don't necessarily think personalization is needed for that discovery. I think there's not as much variety. That discovery is more about curation, if that makes sense. So it's like let's, you know, if you're trying 12 new bottles of whiskey a year, then you know, that's a lot. Yeah, exactly. But, but you probably, if you want real personalization, you probably have to be drawing from 100 different bottles and then that's actually quite difficult to do. To have 100 bottles in stock and then yeah, to be personalizing in that it's, it's not, it's not as easy. But something like craft beer I think could benefit from, from what we've dealt with.
[Ad]: That's right. It'd have to be the right level, wouldn't it, where it's not too much of a risk to have someone else choose and recommend products for you that you're willing to accept it. If you're choosing a twenty, thirty dollar bottle wine, absolutely. Up to. And I'm sure you've got more expensive but craft beer. But if you're going hundred dollar bottles of whiskey or whatever, they're like, oh, do I really want to like believe the recommendations here?
Tom Walenkamp: Yeah, yeah, exactly, exactly. And I think also something like whiskeys or gins at the. Sometimes when you've found your favorite, you want to stick to it for a while. Whereas I think with wine people definitely have favorites. But given the nature of vintages and things like that, it's always, I guess, ephemeral. It's always disappearing after a little while. Apart from your really large producers. But even they have variation based on the seasons and things like that. So it's a lot more like you need to keep trying new things no matter what.
[Ad]: I love it. So 10 years old now and I read that you've got 60,000 subscribers. Correct me if I'm wrong.
Tom Walenkamp: Yeah, I think it's up to close to 65 now. But yeah.
[Ad]: What's your focus as a business? Is it finding new subscribers or keeping your current ones, how do you get that balance right?
Tom Walenkamp: Yeah, it's always keeping current ones is our main focus. We don't think of it as keeping. We think of it as providing enough value and making sure that our product is still great for our members. That's always our number one focus because there's no point acquiring a customer if you can't keep them. We don't make money on the first purchase or the first few purchases. So we really need the product to be good enough for customers to stick around and that's a risk we take and it's a. We back ourselves to have an awesome enough product and to create enough value for our members that they, they will stick around. But that's always our first focus. Obviously we need our marketing to be efficient enough for our unit economics to work. But we find that that comes second secondary to making members happy. Especially because you have flow on effects on making members happy in terms of like better word of mouth but more referrals that then bring your marketing down. So that' to be the place you start and then you know you want to optimize enough on the marketing to be able to make the business work but you don't want to. This is probably a funny one, but you don't want to. We don't like to over optimize our marketing to make it such high converting materials that we're acquiring customers that don't necessarily want to be a customer and convincing people. Yeah, exactly, exactly. Not attracting. We want the right customers. We don't want to track people that don't want a monthly wine subscription because ultimately that's going to cost us. They're not going to be happy and it's going to cost us money. And so when you see all these people selling conversion rate optimization and things like that, we get it and for the right product it makes sense. But for us it's kind of like no, we want to, we want to clearly communicate what we do, what our value proposition is. We want to have a good enough attractive offer to get those people over the line. But we don't want to go so far as in terms of just convincing everyone to sign up that we can because yeah, that's not good for anyone
[Ad]: because that welcome offer that you've got at the moment, I think it's off the top of my head. $55, three bottles of wine glasses, like it's a good pack, right? It's worth over $200.
Tom Walenkamp: We've experimented with that offer and that does, that does a lot of our heavy lifting for that and it is wine related. So we are hopefully attract. So there's a lot of thinking behind that in terms of it's not just money or it's not just credit. It's something that a wine drink is going to value and that we're going to attract the right type of customer and a non wine drinker or someone that's not as likely to get value from our product isn't going to be as attractive attracted to that welcome offer. So there is some thought behind that. But at the same time we want it to be awesome enough to get people over the line and to give that value upfront.
[Ad]: It's definitely eye catching. Whose idea was it? I've got to ask you this. The Cheeseboard Esky. To me that's an eye catcher. Right. Every time I see that on social or in your ads, I'm like, oh, that Cheeseboard Esky, like just stands out.
Tom Walenkamp: Yeah, yeah. Our members love it and I think we took it to the UK with our UK business and they haven't seen anything like it as well and it's resonated really, really well over there. But Emily and my team, my head procurement, it was her idea and she came up as a full credit credit to her. That's, that's one of her jobs. She's in charge of our rewards store. She's a extremely talented individual and she keeps our members happy with all those great, awesome rewards.
[Ad]: So cool. Because even the products, even though you're a wine business, that the cups, the travelers, the eskies, they all are so well branded. It's not like you've just bought something from a supplier and whacked the good Pair Daze logo on it. They're totally unique. When you see them in the world, you go, oh, that's a good pair day set.
Tom Walenkamp: Yeah, yeah. We try to make sure the coral color gets out there as much as possible, but we do need to branch to some of our other brand colors as well. So it's not only coral, in case that we call it coral, it's kind of close to orange as well. But the thing that might be useful for your listeners there is that we, it's a rewards program for us. But the way we look at it is we want to give rewards that people actually spending money on other brands for. So a lot of the things we give away, there's whole businesses that are successful like you know, your yetis, your brewmates, your simple modern is it or something that have Built these huge businesses on creating cool coolers and tumblers and things like that. And we're like, well, we've got enough scale now that we can also go to the same awesome manufacturers as them or similar ones and get. And get good enough pricing to make it work for our members and to give them as. As rewards and incentives rather than people having to necessarily buy them or spend so much money on a drink bottle or a tumbler. Obviously they can and people have a lot more variety. But we can benefit from our scale to actually offer that as part of the rewards for our business. So that's how we look at it. Like not giving cash, we never give discounts, we never give dollars off. We value our product. And also in the wine industry, we can't. It's not good to discount winemakers wines either because that can affect their cellar doors, it can affect other businesses. So that. That's always a big consideration. We want to look after our winemakers, but what we can do is we can source awesome products and pass that value on to our customers. Even more value than a dollar discount because we can, you know, we're buying at our wholesale prices or manufacturing prices and we can give that value at the retail value.
[Ad]: That's brilliant. And I think, you know, the products that you are creating there as rewards, they're perfect because they're used in social situations as well. So I can assume that they amplify brand awareness and word of mouth because they are used at picnics, they are used around dinner tables. It's not like they're something that someone gets a reward and they hide in their bedroom. It's like you're there at the table. Are probably the most important times in these people's weekends. Yeah.
Tom Walenkamp: Yeah. It's always so lovely when you see it out on the street. I think in lockdown. A lot of people had our tumblers in their one hour outside and think doing their exercises with a glass of wine or coffee or whatever. But then, you know, see that the coolers out and about is always a great feeling. Especially like when, when my daughter sees it and she's like, you know, dad, that's a good paradise thing. I'm like, yeah, it's like, it's. It's a really nice feeling.
[Ad]: So why is that lady exercising with a good paydays cup?
Tom Walenkamp: Yeah, I see the insulated wine bottles at the gym quite frequently actually. So I assume there's water in there at that point.
[Ad]: Have you ever played tennis where there are two balls on the court at the same time. It is mayhem. That's what it felt like for the team at Elite 11 when they had separate systems running for online sales and in store sales. Inventory was out of whack, customer data was all over the shop and they just couldn't get into the flow of the game. During COVID the Elite 11 brand quickly launched into physical storefronts. The problem was that their POS tech wasn't ready to scale with them. Since stopping to re platform to Shopify POS, they are now acing the competition with 80% revenue growth including 240% year on year POS growth. Better still, the unified view over customer and inventory has allowed Elite 11 to set up personalized cross channel communication, enable ship to customer orders from stores and continue to grow their store network effortlessly. Game Set match check out shopify.com auplus and get in touch with the Aussie Shopify team to see how the dynamic duo of Shopify plus and Shopify POS can help you unify your tech stack for growth. Just quickly going back to where you were talking about looking after members, I'm interested to know, do you have anything set up to proactively get ahead of churn like that you can indicate or predict when a customer is likely to churn and get ahead of that. So you can look after them, find any problems and rectify them before it becomes a churn situation.
Tom Walenkamp: We've thought about it. It's kind of a funny one because you don't want to offer things to people that are about to churn. I know a lot of businesses do that and I think that's a horrible experience because you're basically looking, you're giving something more to a customer because they said they're going to cancel rather than your loyal customers who are loyal to you. I think that's, I won't mention any names, but when you go to cancel an online subscription and they offer you 50% off, you're like well hang on, why was it. That's a horrible feeling. So no, we don't do anything like that. You may after six months or 12 months have had some new welcome offers or new rewards and that our members can pretty much benefit from as well. Like you know, new points available if you anyone that gets a box in January gets this many points. That kind of thing with in that that everyone can get that. So and we have experimented that with that over time. So I won't say we were always perfect, but we maybe a few years ago we really made a decision that we weren't going to do any of those tactics or marketing that, you know, we do see out there, really. And maybe it is because we're still such a flat organization that we see all the customer feedback and we feel that really personally. But we made a call that we were only going to do the right thing. That sounds funny, right? But some of these things are gray area things that brands do, even some of your conversion rate optimization stuff. We made a call that no, we're going to only do things that we can be really proud of. And that's like when you cancel a subscription, we make it really easy. We don't do too many boxes that you have to tick. We don't try and trick people or anything like that. We let you pause for a certain amount of time. But what we do do to try and reduce Churn is just make an awesome product. So we try and get all those things up front in terms of offering as much value as we can in all the ways that we do. But for all members. And we do survey customers on why they cancel. And often budget or lifestyle circumstances are the number one and two reasons. And that covers a lot. But often you don't want to overly convince someone that needs to save some money that month that they should buying wine instead. It just doesn't, doesn't feel right. So what we do instead is say, hey, we get it, all these things happen. And there's a number of reasons, but we're here for wherever you're ready to come back. And we save everyone's levels, we save everyone's points, we save all their recommendations. I think there's like an 18 month limit on when your points will actually expire. And that's more for accounting reasons because you can't just keep it forever because it just becomes a liability over time. But we think 18 months is more than enough. And if they make another order, then it resets it. They don't even need to use it, it just needs to show some activity. And so yeah, so we try to do all those little things in the best possible way for our members and rely on the brand and the product to make it successful over the long term.
[Ad]: I love it because so many, I find a lot of brands are going into subscription so they can lock their customers in and you've kind of gone no. Subscription is just like the way to make it easier and better for customers. It's not to lock them in, it's to give them what they want. It's for the customers, not to lock in the customers.
Tom Walenkamp: Yeah, exactly. Right. Like we are agnostic to if you're a subscriber or you make one off purchases, you still get the same rewards and same benefits. Because we know that some people just don't like signing up to things. And we do say that first welcome offer is to sign up to a subscription because you know, that's why we can afford to, to give you a welcome offer. It's not a one off purchase. We want you to keep coming back so we start that. But you can cancel straight away. So it's so. And lots of people do, right? So people do it just to get the offer. And it's our job to hopefully make that awesome, that first experience awesome enough that they still probably will be drinking wine because they bought wine. So next time they want to buy some wine they'll be like, well I might. I like good Pedes. I want to keep buying wine from them. So letting the product do their attention for you and worst case scenario, they never come back. But they're using a good Pedest brand and cooler and tumblers around the park and the beach and things like that. In the gym. In the gym, exactly. In the gym. We used to have a tote bag which had gym bag and then gym was crossed out and wine was written over time. It still seems them every day.
[Ad]: That's awesome. You put a call out on LinkedIn around some inspiration or recommendations around physical store design. Tell me more about that. What would a good pedaze physical experience look like?
Tom Walenkamp: Yeah, well, actually the genesis of the idea wasn't necessarily online. It was the mission was to make wine retail more approachable, less intimidating. And that wasn't necessarily online only. We started online for a number of reasons. In the end, you know, majority of them being it's a lot cheaper and a lot easier to get up and running in those early days. But we never really gave up on that idea of it actually potentially our brand having a physical manifestation. The Apple retail store was a big part of inspiration in the early days in terms of I tell the story all the time, but when you used to buy. I remember going and buying a computer with my dad when I was a kid and it was such a confusing experience. You'd walk into the computer shop and I'd be asking you questions like how much RAM do you need and what painting do you want and what graphics card do you want and which brand do you want? And you'd be like, you just have to. Would have to trust unless you're a computer person. Like you'd have to trust that salesperson to give you the right machine. And then a lot of people don't appreciate it. But Apple made the retail experience so much simpler for actually buying a computer as well. They had the simple model and they had the professional model, and they had a few models and you walk into the Apple Store and they made you feel like a genius instead of a genius bar, instead of someone that doesn't know anything about computers. And the whole experience behind it made everyone feel welcome and made it a joyful experience. And that was what we kind of were thinking about wine as well. What's another industry? Wine was another industry where it's quite a confusing product. You end up trusting a lot of sales reps and things like that. And you don't really know if you bought something good or not. And even if you like it or don't like it, you don't know if it's your taste or if it's actually the wine. So we really thought that there's a chance to reinvent the retail experience as well. But for us specifically, we want to maintain that. We want to keep the approach in terms of making it accessible, making it fun, making it educational. We want to use our recommendation engine, all the tech we've built, we want to leverage our reward system and customer loyalty benefits that we have, but also just make a retail experience that kind of makes wine less intimidating and more approachable. So that's kind of all the ingredients that are going in and we'll see what comes out the other end. But I think also I want to blend and you know, I'm based in Sydney and you don't see it as much here, but want to blend. Being able to have a glass of wine with the retail experience as well. I know that other cities and definitely other countries do this a bit better, but that's another thing is where we want to allow people to try the wines and, you know, the same way that you could play around with the product in the Apple Store.
[Ad]: Yeah, that's cool. It almost becomes like a social space within a retail environment.
Tom Walenkamp: Exactly, exactly. It's not, it's not quite, quite a wine bar. It's not your typical bottle shop. It's something in between. And I think that that su. Because we innovated on the online space and we would like to create something new in the physical space as well.
[Ad]: That's fun. Any solid plans or still in conceptual mode?
Tom Walenkamp: We're actually working with one of your previous guests, the General store. Oh, nice.
[Ad]: Yeah. Any in the team?
Tom Walenkamp: Yeah, exactly. We've got Reid, he's the creative director, I believe, or head architect and now one of the creative directors. Yeah, it's going really well. So we'll see. We're working closely with at the moment, brainstorming and thinking of new concepts. So we'll see. See where we come out on the other end.
[Ad]: Very exciting. I love what they just done with the Michael Hill stores and the Rebel stores. Amazing.
Tom Walenkamp: Yeah, exactly, exactly. And I listened to your, to your podcast with Danny when I was doing my due diligence as well for them. So that's what I mean by like giving back to the, to the community as well. Because, you know, I'm a big consumer of podcasts and things like that.
[Ad]: That's brilliant. Well, the thing that you could probably help us with, is there any wine myths that we should know about as consumers as, as you know, is there anything we should know that we should avoid? You're going to call anyone? Of course.
Tom Walenkamp: Yeah, well, it was actually a finance professor that taught me this one and actually one of the, one of the people that may be interested in the whole industry. But you know, you go to a restaurant and you, you don't pick the cheapest wine, but you pick the second cheapest wine on the list. So restaurants know that, right? They know that's what you're doing. They know that's the trend. And so very strategically they will make the most margin on the second and third cheapest bottles of wine quite often on the wine list because they know that's going to be the most popular one. So often, like sometimes you can be, just go for the cheapest because it's going to be just as good a quality. It's just they don't, you know, the mark is a good margin there. So look, that's a, it's a myth. So it's not always true and I can't, I can't validate it or anything like that, but you've given us tight
[Ad]: asses a reason to order the cheapest bottle every time. Just, you know, hiding under the smarts. You know, you're getting played if you, if you're going above that. That.
Tom Walenkamp: Yeah, exactly. Yeah. At least one or two above that you're getting. Yeah. But good luck explaining that to your date or so. Yeah, yeah. Was it by Beware, Use this at your own own discretion.
[Ad]: And what's your favorite drop at the moment?
Tom Walenkamp: Getting a bit colder. So I am, I am on to the, the warmer reds quite often. A Grenache is my go to because it's not too light, you don't drink it too, too quickly. But it's not necessarily as heavy as, as a Shiraz or a cab salve. So Grenache is a good, it's a good wine for me to one of
[Ad]: my go to's especially, especially when you've got kids. You're gonna have to have a cupboard full.
Tom Walenkamp: Yeah, that's right, that's right. You gotta be careful as well because you don't wanna, you definitely don't wanna overdo it because there's nothing worse than being hungover with little kids in the morning.
[Ad]: That's right. Yeah. You've gotta, you've gotta find balance there.
Tom Walenkamp: You gotta be on your A game. Yeah.
[Ad]: Tom, I've really enjoyed this chat. We've got so many questions there that we didn't get to but we've kind of covered them in bits and pieces. But what I'm really keen to understand Next, you're at 10 years old now, 65,000 subscribers, you've got your machine learning algorithm pumping brilliant. You know, spectrum of wine producing partners. What's next for yourself and the good pair Days team?
Tom Walenkamp: Look, we covered off a few of the, a few of the projects in terms of the physical store experiment. We're in two markets now in the UK and Australia. Would love to keep expanding into new markets. One of our biggest, I guess strategic ideas is that what we do is very different to what other retailers do, not just in Australia but around the world. So we do believe that we have a competitive advantage in a lot of different markets. So that's always a focus of ours, although that's a bit of an expensive focus of ours. So if we can get the physical store up and running well and it works and we, we learn enough from it and we're comfortable with the, that can actually the two of them can, can overlap where we actually might launch in market a bit more efficiently with the store and then roll out the online around that, you know, if you have a store you can do some, the early fulfillment from the store as if you're signing up to a three pillar in other market or getting your own warehouse. We run our own warehouses ourselves. Then it can be a bit more of an investment but the two of them together is a bit of our roadmap. So first let's see if we can make it work and then let's think about the next markets we want to move to. And that's obviously on top of just increasing our wine range all the time, increasing our rewards, increasing our Online features that make the make the wine journey more fun and more educational.
[Ad]: And as you go into those new markets, say the UK for example, do you have to change your whole product mix and your supplier partners or is part of the offering is like we're bringing our existing and you know, Australian range to other countries?
Tom Walenkamp: No. So the former in terms of we, we buy from in the early days, local distributors and then we, as we get bigger we can go directly to win wineries or in the UK's example, we can go to Europe ourselves and start bringing them in.
[Ad]: Sounds like a horrible job to source.
Tom Walenkamp: Yeah, exactly. The wine team, they get to do some awesome travel with those guys and girls. The benefit of getting larger though is if they do find a great wine in Portugal or something, then we can send it to Australia in the UK or wherever else now so that we get some scale benefits from that.
[Ad]: Beautiful. And I can imagine the data that you're getting from that from wine all around the world. Pretty powerful. Tom, thank you so much for sharing everything that you have today. What's the best way for people to get in touch or learn more About Good Paydays?
Tom Walenkamp: GoodPeaceDays.com is for the website. Get your free cooler and tumblers or you can hit me up on LinkedIn. Tom Weilancomp. I'm the only one on there, I think. And so yeah, benefits of having a, having a different last name. Yeah, that's how you get in touch with me personally. Or if you'd like to reach out to the team, we've got the contact details on the website.
[Ad]: Beautiful. Tom, thank you so much for joining us. What an incredible journey. Over 10 years already. I love that you're doing things a bit differently and the way that you are approaching subscription from a customer first perspective. It's been really great chatting to you. Thank you.
Tom Walenkamp: Thanks so much for having me, Nathan. I really appreciate it and thank you for everything you do for the community.
[Ad]: I've long looked up to Good Pedot. They're one of the brands that's always stood out to me for some reason in E commerce. So I was hugely excited to meet Tom for the first time. However, most of my excitement originally came because I love their branding and their tone of voice. I was blown away by the smarts behind the machine and how early they were on the machine learning bandwagon. Apart from that, here are the three takeaways that I took from that conversation with Tom. Number one, don't be a subscription douche. Customer centric subscription models focus on providing customers what they want rather than locking them in with contracts or offers. I was expecting Tom to have a really smart answer when it came to predicting customer churn, but he doesn't care about saving those who don't see the value in what they're offering. He'd rather spend the time adding more value to those who love what they do.
Tom Walenkamp: And I love that.
[Ad]: Number two Disrupting by Breaking down the barriers this chat reminded me a lot of the approach that George at Blue Thumb was taking towards art. And that was back in episode 388 where they're ripping down the societal barriers that make it hard for people to access enjoyable things. Whether it is art or wine, there shouldn't be a barrier for everyone enjoying it how they want. Are there other industries that could be disrupted by tearing down these invisible barriers? I think e commerce is a great way into the this and number three, probably the most important one. When ordering wine in a restaurant, avoid the second or third least expensive bottle because they know what you're doing. Those are the ones that are usually the most heavily marked up. Bottles either go the cheapest or splurge a little bit more. Avoid that second and third. What a great tip. Before you go, we'd love to invite you to join the Join our free e commerce learning platform, Add to Cart Campus, Meet other professionals and learn from e commerce experts to take your business and your e commerce career to the next level. Register to join canvass@addtocart.com now. If you enjoyed today's episode, make sure you share it with a friend or a colleague. Or even better, leave us A review on Spotify or Apple really makes a difference.
