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Sheri Hebbeln
 
August 9, 2012 | Wine Industry Trends | Sheri Hebbeln

Evolution of Wine eCommerce – What Lies Ahead?

Change is inevitable and in the world of technology companies, it happens fast.  Over a very short period of time, technology has dramatically changed the way we shop.  From brick and mortar to basic eCommerce, to flash models, group buying, social commerce, and mobile; we’re buying a lot more through digital channels today than we were even a year ago.  It’s true that the wine industry is still catching up to other markets but the tide is shifting rapidly, due in large part to the California ABC’s industry advisory that was issued in October of 2011.

 What’s in store for wine online? 

According to Forrester, the U.S. eCommerce market, which represents just 9% of total retail sales, was in excess of $200B in 2010.  The value of wine eCommerce is a little more difficult to estimate.  VinQuest 2011 put the total DTC market for wine at $3.4B in 2010.  Given that, a very conservative estimate of 6% would place the eCommerce portion at about $200MM, leaving a whole lot of opportunity for growth. 

The problem we face is that there is still a big divide between consumers, who don’t have easy access to the wealth of product available in wine country, and wineries, who haven’t quite figured out how to reach those customers.  We’re still waiting for a large internet retailer or innovative new business model to permanently change the landscape for wine online, but there are plenty of companies making a direct impact today. 

As customers continue to shift their buying online it’s important to understand a few realities about today’s online shopper. 

  • Affluent consumers shop online with more frequency (JP Morgan Internet User Survey 2010).
  • Today’s shopper has been trained by modern business models to expect value, selection, and instant gratification.  Products should be in stock and ready to ship.
  • Reduced shipping rates are an important motivator in online purchasing. Think Amazon Prime.
  • The sensory experience and sampling are important with wine, and today’s online businesses need to find a way to overcome this through excellent imagery, introductory offers, and use of sampling programs.
  • Product education is important to online shoppers.  Wine businesses should make heavy use of editorial copy, video, and the recommendations of other customers. Content and commerce should always go hand in hand.
  • Referrals work.  Social sharing, refer-a-friend, and discounts for successfully signing friends as members are great ways to boost customer acquisition rates.
  • Curation is often a way to provide value to your audience, whether through use of an “expert”, an in-house team, celebrity endorsements, or specific product criteria.

Some examples of businesses that are shaking up wine online:

Subscription Model

Club W

Naked Wines

Wines by Wives

Flash Models

Gilt Taste

Invino

Group Buying

Groupon

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