What will it take to scale online wine sales to a billion dollar sales channel?

Last night when I watched my husband shop for garden chemicals through AMAZON.COM on his IPAD, two things struck me as odd. First, the IPAD: my husband is the last adopter of mobile technology. A year ago he still stored his clients’ addresses in a physical Rolodex. Second, buying garden chemicals online: normally this is a last minute run to several local stores in the middle of Sunday gardening frenzy.

When asked about the IPAD and chemicals on AMAZON, he responded: “It is so easy and reliable this way! I don’t have to run around town to four stores to find what I want. With AMAZON.COM it gets here the next day.”

What does this have to do with wine? For the last ten years, general managers in the wine industry have been operating tactically in digital marketing and ecommerce – minimal budgets, achieving minimal returns. And the wine consumer’s shopping experience has consequently been less than best of breed. Therefore, It comes as no surprise that the wine industry is behind other industries in driving retail sales online.

Spurred by consumer demand and online retail investments, digital wine sales are growing double digits (38% in 2010 and 2011) and expect to double to $5-600 million by end 2012.

In 2012, winery leadership is waking up to the opportunity and the need to up their game in order to benefit from the wave of consumers flocking to online shopping.   Many more wine producers (large and small) are investing in a new generation of tools to build digital sales channels that are enabling wine consumers to increasingly experience convenient online shopping.

Many are learning how to develop strategic roadmaps that detail goals, strategies and allocates resources – with the same level of commitment to national distribution plans. These plans address the following:

  • Product strategies targeting Internet customers.
  • Tactics that leverage and convert existing customers to the digital channels.
  • Strategic partnerships that have large customer acquisition machines.
  • Experienced staff that has ecommerce sales knowledge.
  • Best of breed technology, platforms, analytics and logistics tools.

Always an evolution – never a revolution. Back in 1998, I came into the wine industry from the tech world to launch Winetasting.com – an online wine marketplace and distribution model that eventually sold to 1-800-Flowers. 12 years later, I worked alongside Tastingroom.com’s founding team to get wine sampler technology launched through an online marketplace.  Both business models have overcome significant hurdles to wine industry adoption of ecommerce and supported the movement to online sales. The industry still has many hurdles to face and a ways to go before consumers have access to Amazon-like convenience and trusted online wine shopping solutions.

 Top wine industry hurdles

  1. Access to more customers: marketplace solutions have yet to emerge that can drive demand generation and win share of wallet with millions of wine consumers. Wine industry customer acquisition is still limited to thousands of consumers (at a producer level) or hundreds of thousands through the largest online wine shops.
  2. Ability to manage producer channel conflict and pricing: aside from access and relationship, producers have yet to stipulate compelling reasons for wine consumers to buy online, direct from winery – through customer service and other benefits.
  3. Affordable and trusted logistics solutions: tighter integration of logistics systems is needed so wine consumers can experience Amazon-like convenience, speed and ease of shopping (efficient navigation and shopping cart transactions, affordable overnight delivery, and best of breed customer service).
  4. Ability to reduce consumer risk and increase adoption: major innovations are enabling consumers to taste before they buy online, reducing barriers to purchase.
  5. Ecommerce knowledgebase and experience: producer investments in digital marketing resources still lag heavily (planning, staffing, marketing, systems).
  6. Regulatory inhibitors: the complex regulatory environment around the wine sector continues to make compliance management challenging and costly.

The good news is recent growth in online wine consumption is being fueled by consumers’ continued passion for wine and availability of constantly improving digital technologies and logistics solutions. 

It is time for wine industry leaders to wake up! With tens of billions of American consumers ‘bought into’ the convenience of online shopping and today’s technology supporting easier and faster solutions – wine industry innovators have more tools than ever to drive significant results. Find out how gain competitive advantage and expand your digital sales channels.

Call Deborah Steinthal (707.246.6830) to order your complimentary, nine-page report and set up a meeting to discuss a realistic growth strategy for your digital sales channels.

Scion Advisor’s nine-page report covers new lessons from online retail.

  • Why Internet retailers’ are tying their digital strategy back to their core business strategy.
  • How to integrate digital marketing campaigns with overall business goals to drive more revenues around all sales channels.
  • How and why online shopping has shifted to more personal and meaningful consumer experiences.
  • Top ecommerce sites’ new best practices.
  • How social connections are becoming the new communications gateways – driving purchasing decisions.
  • How Chief Marketing Officers (CMOs) are using consumer insights as an important tool enabling them to achieve much better shopping results.
  • And more.

[1] Page 4: Perfect Storm Revisited: Part IV»: Predicting trends and Opportunities. Authors Deborah Steinthal Scion Advisors; John Hinman, Suzanne DeGalan, Hinman & Carmichael (Practical Winery and Vineyard, Fall 2011) 


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ABOUT THE AUTHOR. Deborah Steinthal is Founder and Managing Director of Scion Advisors, a leading boutique, strategy consulting firm serving the U.S. wine industry. With a proven approach enabling business owners to position for profitable growth or for exit, she has worked alongside over 150 winery owners and CEOs; and has moderated over 80 Winery CEO Roundtables involving more than 50 top wine industry CEOs for over a decade. Deborah’s expertise is in the area of business growth strategy, family business transformation, and board and leadership development.

Based out of McMinnville, Oregon; born in Lima, Peru; raised in Belgium and Germany; Deborah has lived, worked and travelled globally. She is broadly published in the national business press, an invited speaker, panelist and widely quoted for research on key practices, such as such as How to Build a Pull Brand, Digital Commerce and Family Business Transition.

For more information call Deborah Steinthal at 707.246.6830.

Among her clients: Bledsoe Family Estates (Doubleback, Bledsoe family Wines, Bledsoe-McDaniels), Cristom Vineyards, Adelsheim Vineyard, Wine by Joe, DeLille Cellars, Woodward Canyon Winery, OVS, Willakenzie, Elizabeth Chambers Cellar, Patz & Hall Winery, Benziger Family Vineyards, Calera Wine Company, Delicato Family VIneyards, Cakebread, Spottswoode, Gundlach Bundschu, Luna Vineyards, Clos Du Val, Quail’s Gate Winery, Wente, J. Lohr, Choice Lunch,
 Cowgirl Creamery, 
Easton Malloy 
(producers of Peppermint Bark for Williams-Sonoma)
, and McEvoy Ranch.

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