Ecommerce not for the wine industry - not quite true
Wow - sometimes I see information that I just have to challenge - last week after the MKF seminar did a great service for the industry with a consumer direct report. Unfortunately they only used one data set and some of the conclusions were unfortunately skewed. You can see some of the quotes here.
What bothers me most about this are a few things:
Using only one outside source to help build the data set. I know there is sooo much consumer direct data available and I would hope that next report they tap other people with large wells of information.
The statement (paraphrased) that all direct sales start in the tasting room and that people are not buying wine by the internet is absolutely not true. Also if we as an industry accept that, it is extremely myopic. Limiting ourselves to only people that come to the tasting room severely narrows our addressable market. I, with 1000% confidence, see e-commerce and wine growing year over year (trust me, I have the proof). I also see this as a way that wineries, with the very difficult market dynamics, can break out of their limited barriers and have a world wine audience. The notion that people only research and then buy off-line is very difficult to believe (the empirical evidence we have aside) since MOST brands do not have enough distribution that would allow someone to research their product and go buy it nearby. How often do you see Hourglass, Kosta Brown, Turley, and on and on in nearby stores. How much Kistler do you think goes to the state of Ohio. The distribution issues play so well into the wineries favor making it almost necessary for a consumer to have to go buy the wine directly from the winery.
The growth in consumer direct has the most potential in e-commerce and phone. To capitalize on this opportunity, wineries need to build plans and invest in these two channels (it takes money to make money). Simply putting up a website does not constitute e-business. That is like saying that putting a sign in front of my winery makes it ready for business. Direct takes much more than just launching a website and until wineries commit to it as a serious channel, it will continue to look less successful to wineries not leveraging it to the maximum. Trust me, there are more consumers at home looking for great wine than people who travel to winery tasting rooms.
Though I am thankful for the report, I am disappointed at the message.
May 8th, 2007 at 10:47 pm
Paul you know I love you, but….this may be the most self serving commentary I’ve read in long time. The “trust me” statements really don’t take the place of evidence, when challenging a point of view. All wineries need do is “invest” is more infomercial than informative. Now, I realize spread throughout your site are plenty of data reinforcing your point of view, so some links would help when you take on the likes of Barbara Insel and MFK.
Your faithful servant,
T.O.M.
May 9th, 2007 at 12:12 am
People ask me if I delete comments that don’t agree with our POV. I think Tom is one of the most regular contributors to a different and sometimes contrary points on our blog and I approve every one of them. We want all voices heard.
Tom,
I hear your statement but I felt there is enough evidence but it can be found deeper in the millions of dollars online retailers (Wine Library, Wine.com, Costco) generate by creating dedicated resources to their online efforts for wine. We as an industry have not put forth the same effort and some key wineries that have are generating over 250K in less than two weeks. I am not being intentionally obtuse but I am sure our clients do not want us to share their success in dollars. However we do have plenty of success stories that can be found http://www.inertiabev.com/inertiabev/page/cases.jsp. Moreover my strongest point was that the statement about ecommerce was not correct and us getting investment and being in business is the “trust me” factor because our proof is in our existence. I also say that almost every industry challenged the adoption of e-commerce during the dot com era. Though not all succeeded at the time, look at the world now. E-commerce is real and it is real for all industries. For the wine industry with limited ability to get market access - direct e-commerce and phone sales present one of the the greatest opportunities for a wineries growth beyond its tasting room. Tom, trust me - this emerging market is happening and statements like “e-commerce does not work for the wine industry” is like saying no one will buy words to advertise on the internet. I think Google would disagree with the latter as strongly as I disagree with the former. We as an industry just need to make it so.
May 9th, 2007 at 5:22 pm
Paul -
I am looking at the same data you are. With outside forces such as legislation and taxation also effecting this industry, its growth is set to boom in the coming 1-2 years. How are wineries preparing is the question? And not IF, but WHEN.
Cheers,
Mark Spangler
http://www.winemarketer.com
http://www.classicwines.com
May 10th, 2007 at 9:45 am
They are turning the corner and companies like ours, yours, and others in the space are hopefully helping them prepare for the wave.
Cheers,
P