The UK online wine scene is becoming a bit more understandable, but there are still many unknowns.
As if the wine world weren’t complex and murky enough already, the virtual world of wine can seem like an especially unnavigable kind of place. For many years, the UK online wine channel has been a bit of a data desert. Living outside the classic point-of-sale price and volume measurements from Nielsen, and also subject to habitual overclaim from market players looking to big up their market position, the size of the UK online wine market remains something of a moot point.
Wine Intelligence’s UK Online Retail and Communication 2016 Report, released this Thursday, sets out to firm up the known knowns, and try to tackle some of the known unknowns. Estimating the size of UK online retail to be approximately £800 million per year, and comparing our tracking data from 2015 and 2010, we have managed to chart the topology of this opaque market and identify the key respects in which it is evolving.
Some aspects of the UK online wine channel are becoming much clearer. Yes, internet users are becoming influenced about wine online in ways that were unheard of ten or fifteen years ago, and, yes, the internet has revolutionised our way of life at a staggering rate. Strangely, though, this has not brought us into the unknown when it comes to how people research and buy wine. In short, our report shows that the UK online wine retail environment is not as unnavigable as you might initially have thought.
The internet may be a powerful force in influencing consumer behaviour, but our report shows that the ways in which this is happening closely resemble patterns seen in the pre-net era. The opinions of friends and family are still what online buyers trust the most, only on social media rather than in person. Similarly crucial are the opinions of wine merchants and small wine producers, but on the web rather than in the flesh. It would seem, therefore, that the internet primarily empowers pre-existing trusted sources of information with a new voice rather than enabling entirely new ones.
Yet to make this point is not to dismiss the significance of the rise of online. Since 2010 our tracking data neatly highlights the increase in those who pay attention to wine-related information online, and the staggering rise in those who actively engage in discussion about wine online. Furthermore, online sources are exhibiting a significant increase in importance compared with 2010, with supermarket, newspaper or magazine websites leading the way.
Online shoppers as a group do also differ from regular wine drinkers in some respects. They are likely to be younger and higher earning than the average UK drinker. They are more likely to buy a wider repertoire of reds and opt for obscurity when it comes to white varietals. More fundamentally and more generally, online shoppers are likely to have higher involvement in the wine category.
But, considering that the ground is shifting markedly away from offline, this earthquake’s not shaking up consumer behaviour all that much. Indeed, the most used source of wine information for UK wine drinkers remains age old – friends, family or colleagues –, and the rise in popularity of newspaper and magazine websites signifies little more than a transition from paper to electronic screens. There is no real change in principle here.
Indeed, as UK online wine retail continues to burgeon and eventually flourish (being predicted to grow to represent 14% of total wine sales over the next three years), we should see any presently visible differences between it and the offline sphere fade. Today’s online buyers, the pioneers of online retail, are those with higher involvement in the wine category. However, as online retail gradually usurps offline channels to become the mainstream, on average we should expect to see this involvement diminish.
So we’re not exactly in unknown climes now as it is, and not to kill everyone’s spirit of adventure, but it looks like we might even be homeward bound.
Find out more in the Wine Intelligence UK Online Retail & Communication 2016 Report, available on Thursday in the Reports Shop.