Amazon Wine pulling the plug has been a major disappointment for many of us in the online wine business.
There is no doubt that they would have helped 'float the boat' for all online wine sales, even direct to consumer sales from the winery website.
Wine ecommerce has yet to hit critical mass yet. I believe it will relatively soon.
But the expense of doing wine business online has made it a slow sales channel for many companies thus far. Many wineries and online wine companies have not realized the level of sales they were expecting as of yet.
We have a few challenges to overcome in the online wine industry:
1. Most pressing is the state by state regulatory issues that Tom Wark has so eloquently addressed in his Fermentation blog post here. These unnecessary and expensive hurdles make it financially unfeasible for many online wine companies.
2. As of yet,there has not been widespread consumer adoption of online wine purchasing. This is one aspect I was counting on Amazon Wine to really lead the way on. People used to scoff at the idea of consumers buying books online. Now it is considered perfectly acceptable , if not preferable, for many readers.
Amazon also created a viable path for smaller publishers to get their books to consumers, especially when the chain bookstores refused to carry their titles.
Online sales channels are creating similar outlets for smaller wineries and importers, especially when large wholesalers refuse to represent artisanal wine producers.
3. Much of the wine trade has been pulled kicking and screaming into the online world over the past few years, both from a sales and marketing perspective. Wine wholesalers have fought against opening up trade barriers for online retailers across the states. Wineries have been slow to understand and maximize online sales channels, except those sales originating from their own websites. Local retailers only started shipping wine once their consumers continually requested the service.
Wine consumer demand will be the deciding factor in revolutionizing the online wine world, as well as accelerating online sales numbers (this is the beef).
In this way, online wine sales mirror the rise of organic wines in the past few years. This growing category was not heralded by the wine trade, the consumers kept asking for and are finally getting their request met with higher quality wines made with organic and biodynamic grapes.
Until that time, we are lucky to have a host of companies that continue to fight the good fight when it comes to online wine sales. These are a few of them:
Snooth
Inertia
VinTank
Wine Searcher
American Winery
4 comments:
Amy, as always a well stated and measured take on the primary issues facing DTC practitioners and proponents. Did Amazon ever really put the plug in the socket? My understanding is that they made a good faith effort at due diligence, but based on the regulatory and compliance hurdles facing a company that is a master at logistics, this was a solution that likely wasn't going to happen. For those of us in the industry our climb is still uphill, or to paraphrase Coach John Madden 'The Road to easy street goes through the dump.' Keep up your dedicated DTC efforts and your terrific writing .... Cork
I am finding the conversation about Amazon's decision fascinating. If nothing else, it spreading awareness about the challenges to distributing wine on line. With awareness, comes the possibility of change. I appreciate articles like yours that not only define the problem, but articulate the positive changes over time and hope for the future. It will require discussion, cooperation and legislation but it is possible.
Small winery position: we won't miss what we don't know. Out DTC via the internet is about 3% of our business and yes, can grow. I'd much rather take a route that allows me visibility to the end user. Sure, some of the would-be Amazon traffic could have flipped over to me, but as a small winery, I have a better chance of achieving this at an off-site tasting. The consumer will never have to order commodity wines online so that leaves the rest of us to go about our business as usual.
Don't forget NVL was formed in the shadow of defunct wine.com and wineshopper.com (which Amazon invested in). Too many promises, not enough delivery. Seems like John Corcoran is very accurate in his assessment.
Unfortunately, I wouldn't and don't expect anything to change anytime soon. The status quo is very powerfully entrenched and so the current problems are going to remain. It's quite apparent that the concentrated and unified power of large commercial
special interests beats the diffused and unfunded
interests of small businesses and consumers.
As a nation we seem unable to implement reasonable and even necessary reforms when corporate interests are against it. Alcohol distribution is shackled with
numerous archaic and onerous constraints. The 21st amendment giving states the final say on the matter means an impossibly high threshold to
nationwide reform.
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