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Behind Fine Wine | Saucal’s Mitch Callahan and Warren Porter Discuss Online Retail Wine Buying

Behind Fine Wine | Saucal's Mitch Callahan and Warren Porter Discuss Online Retail Wine Buying

In this episode of Behind Fine Wine Warren Porter sits down with Mitch Callahan of Saucal over a bottle of Napa Valley 2012 Joseph Phelps Insignia. The two of them chat about how Saucal helped IronGate.Wine build one of the most personalized and modern online wine retail websites in the retail fine wine industry. They discuss personalized wine shopping and emails based on the preference engine that Saucal built; one that queries vintages, regions, producers, wine scores, and cost ranges. Warren and Mitch talk about the new credit card processor Bolt which guarantees zero fraud which is a large issue in the retail wine industry and also delivers one-click buying to the IronGate.Wine website.

Interview Transcript

Warren Porter: Good afternoon everybody and welcome to another edition of Behind Fine Wine, I’m Warren Porter of IronGate.Wine and my guest today is Mitch Callahan from Saucal, Mitch welcome.
Mitch Callahan: Thank you so much, I’m glad to be here.
Warren Porter: Yeah, pleasure. I think this is going to be a really interesting edition because well, typically guys who are really really deep in wine and Mitch is coming at it from a different angle. Saucal was the company that we brought on board to build this amazing E-commerce wine website that if you haven’t tried it yet hopefully you will and buy lots of great wine from Iron Gate. But before we do that, the wine that we’re going to have today is way too young we shouldn’t be having it quite frankly, but I actually have too much two thousand and twelve  Joseph Phelps Insignia and everything else that I have is over at the wine storage facility next door, so this one I had on hand I thought well let’s give it a try then we will know how much longer it’s going to last.
So, this Mitch is a 2012 Joseph Phelps Insignia. Joseph Phelps Insignia got famous when it won wine of the year I’m thinking in 1997. So, as Wine Spectator it’s wine of the year and it’s a tremendous wine, this will last a very long time as I said it’s going to be really really yum, this one is primarily Cab Sauv like about seventy, it’s actually on the back, seventy five percent Cabernet Sauvignon, it’s got about fifteen to twenty percent Petit Bordeaux and then a little dusting of Merlot and it’s just to kind of soften it up a little bit so.
Mitch Callahan: I like it
Warren Porter: I won’t drink too much otherwise we are going to do the whole podcast with bright red teeth. So, as I mentioned at the top of this we hired Saucal because I wanted to build a site, green-field, we were very fortunate that we didn’t have all this legacy technology and inventory systems and all these things that we were coming in with, and I could build it with the experience that I believed that you know knowledge of my wine collector clients over fourteen years would want to have a pretty good idea of our demographic, and so I built it or I asked you guys to build it in a very particular way so we’re going to talk about that but first off explain Saucal to me.
Mitch Callahan: Yes. So, Saucal, we’re a team of on-demand web developers, and we specialize in a very specific technology which is WooCommerce.
Warren Porter: And that’s the E-commerce platform that we run on?
Mitch Callahan: That’s correct.
Warren Porter: OK.
Mitch Callahan: It’s an open source, very important distinction open source and we can get into that later, why that’s important but it’s built on top of WordPress. Which is the most popular content management system in the world
Warren Porter: OK. so, you guys are a, your typical customer is somebody coming to you saying I’m looking for usually E-commerce?
Mitch Callahan: All E-commerce.
Warren Porter: All E-commerce, everything you do is E-commerce. And so they’re selling you
know typically, were we you’re first wine?
Mitch Callahan: I think we dabbled with some stuff but not to this extent, so I think this more of the biggest one project for sure.
Warren Porter: OK And so what were some of the other type of products that you’re used to doing and sites that you built.
Mitch Callahan: There are very a lot, a lot of digital products with licensing software but even for physical products we get, sometimes you get something really small like suspension for a car,
it’s not sexy but yeah like clothes of course, it’s a very popular one but it spends a lot of verticals.
Warren Porter: I was going to make a joke about how suspension for a car could be sexy but I’m not going to do that now. I was thinking that when we got the idea, see iron gate would sell wholesale collections to retailers and still do, we did that for many years, and when we came up with the concept of being a retailer our self, I don’t know much about this stuff so I’m thinking
why can’t just do this kind of things on Spotify.
Mitch Callahan: On Shopify.
Warren Porter: Shopify, yeah right not on spotify. that shows how much I know. So, I can do it on Shopify and while you can because it’s a good platform for simple stuff. The kind of things that we wanted to do it absolutely wasn’t. So, when we came to mention this team, it was to say look one of the things that my clients don’t like or want is getting these reams and reams and reams of lists that come from people, we want the site to be very simple to be very clean and so those were some of the things that we put in place, or that we asked for from you, so when we gave this to you, was this outside of your box or what kind of stuff presented a bit of a challenge for you?
Mitch Callahan: Yeah. I mean I remember when you guys came through and you were very particular on the design, but that actually made our decision-making a lot easier. When you’ve made up your mind like that it’s easy to kind of dictate the design direction. But where yours was a little unique was the level of personalization and customization which I knew you were going to need. Because you know with wines there are so many different types of varieties where they come, when they were made, and then of course you have different types of wine, the grapes that they use.
Warren Porter: I guess that’s true. For every like this is… Marcassin as well once we have our last podcast. But Pinot Noir, it’s Chardonnay, it’s a whole bunch of different vintages, it is a bunch of different vineyards within that particular producer. So, there’s one seed and then there’s a whole bunch of stems that come from it which make it a little bit more complicated than you know selling those corkscrew, right?
Mitch Callahan: Yeah, so, for that we had to really figure out how can we organize this data so that we can easily filter it. So, when you’re searching you can really narrow it down and find that exact one that you’re looking for.
Warren Porter: And I guess the other thing that is very challenging inside of our business is that, I might call from an inventory perspective of wine Latour, but if you just punch in Latour it could be Louis Latour, Fort La Latour, Chateau Latour, Ch. Latour, Latour Grand Vin, everybody puts it in in a different way. So, I think we used the LWIN database from live X in order to fill that in the back ended and allow people to almost kind of just put in a letter to and say it matches this, just trust me on this.
Mitch Callahan: Yeah, I remember it took a while to finally get it right but yeah, we did it ultimately
Warren Porter: Yeah, that one was a challenge, and so what do you think was of all the different bits of personalization that wound up in the site now. What was the one that really became the biggest head scratcher and why?
Mitch Callahan: Well, I think once we had the personalization, it was then taking that data and working with it, so, actually being able to use it to come up with recommendations for your
Warren Porter: OK. So, when you say come up with recommendations for it meaning, if you like this, then try this?
Mitch Callahan: Exactly.
Warren Porter: OK. Interesting. Let’s take a break. We’re not going to finish this so take those home with you.
Mitch Callahan: My wife would love that.
Warren Porter: With big steak tonight, because it needs a big steak and my suggestion would be don’t cook that steak. A nice raw steak is going to be really good with this one. Now that we’ve you know completed most of not everything that we’re looking to do, I mean there’s always things that we’re going to be looking to continuously improve the experience for this site, but to me it seems to be the most intelligent user-friendly wine retail site on the web that I can find so real, you know to put the cup to you guys because, it’s really something.
So, are you able to take that knowledge out now and help make my competitors super good Mitch?
Mitch Callahan: Seriously, we have really tight exclusive relationship with the most part so we won’t be doing that.
Warren Porter: Yeah, the other thing that I saw having spent a lot of time on wine retail sites was the card transaction particularly in today’s world and that also presented us with a bit of a challenge that you guys were able to solve. So, when I talk about the card issues, a big problem inside of just a, not just wine, wine particularly but in a high value retail equation is fraud. And so you need to be able to balance, negating, mitigating or negating that fraud with an enjoyable experience for the customer, and so what we were doing is you know we started and we got hit. We got hit in a couple of occasions where you know as a young company, somebody came in they ordered it and we couldn’t figure out you know why these were fraudulent.
So, we started looking at the idea of Verified by Visa.
Mitch Callahan: 3-D Secure.
Warren Porter: 3-D Secure. The problem with that we didn’t like is what we’re diminishing the experience by making people go out and subscribing to a visa service that they may not have before, easy once you have it but after that so.
Mitch Callahan: And it’s relatively new so, it’s very unfamiliar for people, and you know when they’re shopping like the last thing you want to do with online-shopping today is add any sort of unfamiliarity, you know you’ve got to make it comfortable or something they’ve seen before.
Warren Porter: Yeah, and that drop rate we couldn’t handle it again. I think that look our demographic of clients, we don’t sell bottles of Skinny Girl Rose by the box. I mean
we’re selling Insignia, we’re selling wines that can be upwards of ten thousand dollar a bottle, and that particular clientele wants and demands a particular experience consistently, and so you know we would do things, we would like you know there’s publicly available information, so I might call you, and you know Mitch you bought a five thousand dollar bottle of wine, you know I can quickly look up and see that you used to live on Johnson Street and ask you what number of the street did you live on, and you go what the hell I don’t want to tell you, that I mean now we’re starting to dig into a little bit of it. So that was a real…
Mitch Callahan: Yeah. So, to speak on that, like especially because of the demographic you have, the experience has to be incredibly simple. Like you’ve got to remove anything that can confuse them or make them get frustrated, and yeah exactly adding security questions on top of an already online experience like it just didn’t make sense so, we had to find a good solution that would help you prevent fraud, and also still be seamless.
Warren Porter: Yeah, and so we instituted a company called a Bolt only a week ago. And so, not only are we getting a hundred percent fraud protection with bolt which I’m very excited about because I mean I used to see orders come through, and I would kind of go, I hope it’s a real order because we get lots of them that just frankly weren’t. But then they also have an instant buy thing so talk to me a little bit about that and how you found Bolt, what they brought to the table and what that technology is, because I understand it’s pretty new.
Warren Porter: Yeah, Bolt is fairly new, so we never enter the payment space, I’m always a little bit skeptical but you know they reached out to us, they need some help with WooCommerce integration, and so I started getting to know their product a bit and they have this guarantee like no-chargeback guarantee, and I was like Wow I really know some merchants are going to love that. And so I kind of got into the width a bit instead of kind of asking you security questions, is this the street you lived on or whatever they’ve got their own machine learning algorithms running in the background doing research on you. And they’re going to know once you start entering your data, you know is this a worthwhile buyer or not. And so, using their own
proprietary info they can decide if they think there will be a charge back or not and they’ll take that risk for you.
Warren Porter: OK.
Mitch Callahan: And now again which is in the given time that we’re in, the one-click checkout patent from Amazon is now expired.
Warren Porter: How long of a patent was it that Amazon held one-click patent for?
Mitch Callahan: Like twenty-five I guess, wasn’t it?
Warren Porter: Was it that long?
Mitch Callahan: Quite a while
Warren Porter: OK.
Mitch Callahan: Because that’s how like I think when I was reading properly.
Warren Porter: I didn’t think the Internet was around twenty-five years, but either way good for Jeff.
Mitch Callahan: These ideas I mean, to me patents are crazy, that’s another line of thought but, nonetheless we now can leverage that across like our own platform, so now on our gig we’ve got the one click checkout, fraud guarantee, I mean that’s great
Warren Porter: Yeah. That’s really cool, I’m glad that we found them and I’m you know where we are starting to reach out to customers and make sure that their experience of that is as seamless as they want. The early indication that we’ve had is, it almost I think we had a one point somebody said it was almost too easy I didn’t even know necessarily that it went through and so that’s really great, I’m really happy with. But by the same token we want to make sure that’s not too tough because we had, we would even have it with somebody like FedEx, where a person would say well just diverted to the FedEx office for me and I’ll go pick it up, don’t take it to my house and then you know they would go in but FedEx would never check ID, or if they did check ID, they actually just took your driver’s license someone OK, but they didn’t realize that you that’s either not Mitch or that’s not the name that’s on the package. And so that was becoming challenging again particularly when you talk about ten thousand dollars bucks of wine.
So do you also said I’m going to circle back a little bit your company because, before the podcast you and I started talking about remote working, because I really enjoyed the traumas of cold place and in the winter time I hate being here, so you know I spent this year working out of South America, but you guys are remote or how do you operate, where are your people.
Mitch Callahan: Yeah, we’re fully distributed team, when we started the company originally, we had tried to find locally and it was kind of a struggle so we just looked online which is kind of where we’re most comfortable, it’s kind of where we live and we just started looking for talent and we started building these processes for working with people who aren’t in the same room with us, and well you know what this works, so then we started hiring anywhere across the globe as long as they’re within a reasonable time zone, so you here we’ve got people here in Canada, U.S.A., Portugal, Poland, Argentina, Brazil, yeah all around the globe so it’s really cool so.
We do work from home, we do meet up once a year together we have a big grand-meeting
Warren Porter: Oh, you do? Where do you do that?
Mitch Callahan: That varies, you know people spread across the globe, sometimes we got like Visa issues we’ve got to consider, so our first one was in the U.S. and then we had one last year in Portugal, and we’ll be having another one of Portugal again just because of Visa issues, but then doing at Canada, maybe Greece.
Warren Porter: Yeah, sounds great. Let me ask you how did you wind up in this business, you’re a young guy did you do this right out of … You found the company?
Mitch Callahan: Yeah
Warren Porter: OK. So, you founded it based on what and what was kind of the goal in setting up the company, and what are what are some of the projects that you really enjoy and what are some of the projects where you go if I’d rather not do that?
Mitch Callahan: Yeah, we kind of landed on E-commerce for a lot of reasons. So, I grew up in the north in the on a really isolated cold, and so for me like the Internet was really important it was my connection to the rest of the world. And so, for me it was really important in the Internet, you know ten fifteen even twenty years ago it was quite a bit different, it was a lot more open and I kind of see it going backwards a bit, nonetheless, the Internet was really important for me so, I’ve always kind of worked on it, I learned how to build websites since I was eleven years old, and I continue to work on it. So, it’s kind of my connection to the world that lets me go anywhere I want but I still have everything within reach. So, for that reason I really do love E-commerce because it really trends everything and now I could be mobile and the world is always with me.
Warren Porter: Yeah. By the way how do people find you, like how are our companies finding you and when they find you, sorry I want to ask you a bunch of questions at the same time, but
but when companies find you were they typically going on look I don’t like what I have, let’s read, let’s start something new or fix what I have or I have this new company, like we have and so here’s a clean slate do whatever you want so, what do you usually do, what do you like the best, and what was more of a challenge?
Mitch Callahan: It’s a bit of both you know sometimes people come to us, they’ve had their site, they’ve been successful, they’ve grown but now you know the site can’t handle what the business needs. So we’ve got to rebuild it, start from scratch, but we do get some new businesses they want to enter the fray, often more often than not they need to have a lot of other systems, kind
of figured out first before they can do that, so companies are usually of kind of more medium sized when they come to us for that, but more often than not I really like kind of businesses that are established, they’ve played around a bit already with E-commerce, they understand the challenges and they really appreciate them what we bring to the table because they’ve kind of gone through some of the challenges and we’re able to alleviate that for them.
Warren Porter: OK well, that’s cool. Well, listen as a as I mentioned to you when you when you came. This is actually the first time you and I met face to face even though we’ve been doing all this work for a long time, we’re really happy with the work that you guys have done. We think you’re terrific, we hope our clients feel the same way because it’s all about, I mean I know where the wine is coming from, I know that my product is going to be good because they go to well extensive effort to make sure that that’s the case, so our ability to convey that to a customer and give them a great experience, the site and the commerce platform of course is integral to that. So we were fortunate as I said that we didn’t have a whole bunch of baggage that we had to come you know bringing into this that you guys had to work around, so I think the clean slate helped a little bit, but what you’ve done is terrific, I’m looking forward to continuing to work with you as you know new technologies arising, eventually, somebody just has to look at a bottle of wine on a website, and blink twice and it automatically shows up by a drone in their cellar at Section V. Fifteen within about ten minutes. I think that’s where we’re going I think we’re going to be launching that next week.
Mitch Callahan: Well, I got to give kudos to you guys too because know some of the best customers, you know you came to the table, you knew exactly what you wanted, which is awesome and you’re always really part of the process iterating and you understand, you know some things will work, some things don’t but until you actually get it right.
Warren Porter: Well, that’s Gregg, that’s not me I’m just sitting in the background, I know not of what I’m doing. So anyway, we’ll cut it off here, so we don’t make too long of a podcast, Mitch, thank you for coming, there’s going to be a lot of extra wine that’s left here for your dinner tonight, so thanks for hanging out with us today, so on behalf of Iron Gate, I’m Warren Porter. By the way what’s your website so that companies can find you.
Mitch Callahan: Yes, it’s
Warren Porter: OK. Terrific. Thank you and we look forward to seeing you for our next episode.