The immense surge in online wine purchasing in the past year across multiple markets offers the global wine industry an unprecedented growth opportunity – but one that might fade when lockdowns end. How will consumers be persuaded to carry on ordering online when it becomes easy to visit supermarkets or liquor stores?
If we were in a parallel, non-Covid universe, we would still be celebrating the fact that the wine e-commerce channel has never had it so good. The combination of advancing handheld technology, more sophisticated, well-funded and user-friendly delivery apps, and a growing habit for using the internet to buy everything from clothes to food, had already cemented e-commerce as the hot route to market by the beginning of 2020 – and, over the past 12 Covid-free months, the growth story would have most likely continued.
Back in this Covid-ridden world, it is now widely understood that wine e-commerce has had a giant jolt of adrenaline since the start of 2020. The apparatus for selecting interesting wines and delivering them safely to a consumer’s front door has been deployed with remarkable speed and effect to fill a sudden and mass-market need for home delivery of alcohol across multiple markets. The closure of many on-premise establishments across the world, combined with restrictions on physical shopping as well as worries about catching the virus, have driven many consumers who would not consider using the online channel in normal times to try it for the first time. And with everyone stuck at home, the last mile problem of being home when your wine is delivered has suddenly been solved.
This leaves a rather interesting puzzle for us to face in 2021. Wine e-commerce advocates would freely admit that, until Covid, they were running a niche business. No one seriously contemplated getting most people to buy wine online most of the time when the product could be easily purchased in a supermarket or liquor store. The original business plan was that e-commerce was only of interest to a more involved segment of the wine drinking population, for whom the selection on the supermarket shelf might not be sufficient, and would be driven more by certain occasions – ie Christmas or a special dinner party.
Instead, wine e-commerce has become a more mainstream product in multiple markets, and its user base has expanded from the 10-20% of engaged, discovery-oriented wine drinkers towards the 40-50% of the population who like wine and buy it regularly, but aren’t always bothered with all the intellectual stuff that might accompany it. The remarkable progress of e-commerce in wine over the past 12 months is clearly visible in the usage data that accompanies Wine Intelligence’s latest Global Wine E-commerce multimarket report, published today, and will be a finding that many producers, brand owners and retailers are incorporating into their business plans for 2021 and beyond.
However, there remains a big question about the future of wine e-commerce: when the pandemic restrictions fade, will mainstream consumers carry on using the channel to the extent they are currently or will they relapse into previous habits? Will the liquor store, on the journey home from work, become the go-to place for wine shopping again because, well, we’re actually travelling to and from work?
The legacy of the global pandemic is one of the key questions addressed in our Global Wine E-commerce report, which, for the first time, brings together usage and attitude data about online shoppers from 11 wine consumption markets with detailed consumer profiles. These markets span the large and growing e-commerce markets of the US and China, and also the smaller, but fast-expanding, online wine markets in places such as Canada, Germany and Mexico.
Within the data, there are many reasons to be cheerful: the post-Covid online wine buyers tend to be younger, high spending, and – mainly – as interested in discovery as they are a good deal. There are also some warning lights for business planners. In most markets, those using wine e-commerce are doing so in addition to their use of physical stores. Their motivations for using online are largely convenience-led. Should post-Covid normality return, and with it the lack of a reason to be at home waiting for a delivery or the fact that the bars and restaurants are open, will the reasons to use e-commerce for wine fade?
For the moment, there are a large number of consumers who are using the internet to buy wine, and they appear to be happy doing so – a remarkable silver lining to the disruption of the Covid era. The global wine business has an unprecedented opportunity in 2021 to build a stronger relationship with its consumers on the back of this relative good fortune – and possibly cultivate more engaged wine drinkers as a result.
Leave a ReplyWant to join the discussion?
Feel free to contribute!