No home run yet for the US online channel
Americans’ use of the internet to buy wine has been lagging, but it’s starting to catch up
As the internet continues to infiltrate almost every aspect of retail sales in America, many might assume that it would have already largely impacted the wine market. However, according to our new USA internet and social media report 2015, it would appear that this is still very much a work in progress. Using the internet for gathering wine information has not yet converted directly into sales.
The numbers of those using the internet as a source of wine information remains relatively low in comparison to traditional sources such as in-store shelf signs (used by 66% of the population) and shop staff (used by 60% of the population). However, the use of online sources is steadily rising with wine merchants’ websites now being used by 41% and newspaper or magazine websites by 37% of US wine consumers. In fact, all of the online sources that were studied showed significant increases in usage since 2011. This trend is further complimented by the fact that traditional sources are in decline.
Why does internet wine searching not translate into sales? Two explanations come to mind, one obvious, one more subtle. The obvious: internet-based sales have been stunted for years by the convoluted and restrictive legislation surrounding liquor sales at the state level. While things are slowly liberalising, vested interests among the wholesaler (middle) tier of America’s Three Tier distribution system are fighting a very effective rearguard action to preserve the status quo. The more nuanced explanation is that America’s bricks-and-mortar retailers remain quite effective at fostering and maintaining strong personal relationships with their customers. Even in states where online wine sales are less restrictive, it would appear that consumers aren’t convinced the internet is as interesting, as convenient or as good value as going into a shop – at least not yet.
For the 11% that do shop online, the chief motivators are the wide selection that the internet offers, the ease of the buying process, and the greater variety of discounts and promotions available. When predicting wine’s future in ecommerce, one must remember that since 2011 the number of people who buy online has more than doubled, demonstrating that the internet is still very much a growing channel in the US wine retail market.
Our latest report demonstrates a slow, but very steady rise in the role of the internet in the US wine market. If you’d like to know more, have a look at the new US Internet and Social Media Report.