The Future of Online Wine Sales

"He said: "I think the market has just tipped. All of a sudden, rather than being driven by 20-year-olds who were the early adopters [of the net], I'm starting to get emails from people saying 'as a pensioner ... The silver surfers have arrived."

This comes from a news story put out by Off License News. Just how significant is this finding that older drinkers are coming to the on-line wine sales channel?

I think it must be significant. Despite the talk about young folks being the one's helping to drive wine's sales accent, it is somewhat older folks that do the real buying of wine. There appearance in any significant number in the on-line world would in fact represent a notable turning point in the on-line wine sales world.

Now get this quote, from the same article:

"Vinitrac research from Wine Intelligence in March 2007 found that 16% of regular wine drinkers in the UK had bought wine online in the previous six months. Internet shopping was marginally more popular among those aged over 55, the survey found, with those under 34 the least likely to buy wine online."

These kind of findings remind me that we are still very much in a transitional phase when it comes to the world of on-line sales and wine. While on-line purchasing has overtaken some industries such as travel and books, this same kind of transition WILL come to the world of wine and completely transform how this beverage is sold. And for those companies that are making full court presses to be at the center of this transformation and who have the funds to keep going and breaking even during the transition, AND who have the ability to either develop or implement "ease-of-use" technology to the sector will find themselves sitting pretty in the years to come.

It also suggests that as this transformation to on-line sales continues, the political pressure to make these virtual transactions easier will become more intense. This is bad new for those who still want to argue that restricting consumer choice in wine is a needed trade off in preventing all those teens from purchasing Paso Robles Syrah and the Austrian Rieslings they are known to crave.

Comments

[Arthur Przebinda]

Tom,

I understand that your refernce point in this piece is one of a person who is an advocate of changing individual states' shipping laws.

I would like to add to this issure the following:

I think that wineries and distributors should lower their on-line prices below average retail prices to reflect the lowered cost of operations that comes with e-commerce vs brick-and-mortar operations. Given the fact that shipping costs often outweigh the cost of time and gas a cunsumer expends in driving to B&M establishment that sells the wine, this would be a tremendous incentive.

[Tom Wark]

"Given the fact that shipping costs often outweigh the cost of time and gas a cunsumer expends in driving to B&M establishment that sells the wine, this would be a tremendous incentive."

BUT...if they can generate positive revenue that makes them happy without lowering prices, why do it? I it would generate the kind of significant sales that overcome the lower profits then I can see it. Otherwise, why do it?

[Arthur Przebinda]

I think that Walmart has shown that there is money to be made this way and to draw the customer for return visits. Regardless of the economic climate, I'd definitely want to give consumers a reason to return to me.

I also think that much of Califonia wine is overpriced. If California producers want to keep up with imports - which often offer a greater value - they should consider this idea. Retailers and distributors would have to follow suit.

[Dale Cruse]

Why is this a surprise? "Elder bloggers" have been a fact of life for years now. Plus, unlike a portion of the under-34 crowd, older people are all old enough to buy wine online!

[Nancy]

Will online wine sales spell the end of the retail wine business? I suspect newcomers to wine will always need a place to start learning, a physical shop, before they know enough about what they like to start shopping on the internet.
A related (I hope) question: can anyone explain why virtually none of the customers in our wine store are over 65?

[Tom Wark]

Interesting Observations, Nancy. I agree with you that as more people shop on line for wine we will not see the death of brick and mortar stores. I don't see how there can be a replacement for a trusted, face-to-face interaction between dedicated merchants and wine lovers. Rather, I think what you will find is the best merchants creating an online presence to extend their reach, serve a larger base and even better serve their own local customers.