More wines, more vineyards, more regions have been introduced to the market in the last five years – and for the most part, they are all palatable.
Until recently, most of these wines were marketed through three traditional channels: wineries sold, wholesalers (distributors or importers) who were in turn the exclusive supply of wine merchants, and retailers.
With the acceptance of the Internet as the basic means for many people to communicate, socialize and shop, this rigid, government-mandated and regulated three-tier distribution system is being challenged at all levels. Direct-to-consumer wine sales are beginning to proliferate like never before. The pressure on traditional neighborhood wine shops has never been greater.
This Internet-based pressure comes in many shapes and sizes. I have classified these new business models into four categories.
- Wine clubs have been around for decades as snail mail offerings; Internet subscriptions have increased geometrically over the past five years (eg Wall Street Journal Wine Club).
- Small and medium-sized wineries are embracing the internet as a way to better reach consumers and sell their wines directly to their email lists of current and future loyal customers. Choose your own adventure when considering these wineries.
- Traditional online retail websites struggled to sort through the extensive regulations imposed by the three-tier system, but most survived. A number of websites have attempted to intrude into this space, including the dominant player in all things consumer – Amazon – but none have been able to master (bypass) this system. Score one for old-fashioned product distribution.
- A number of retailers and marketers have created “flash sale” sites, primarily catering to consumers focused on The Deal. The business model of these sites is to a) send out periodic emails to customers while b) offering small quantities of wine c) at deep discounts and d) for a limited time – a perpetual Black Friday from the comfort of your computer or mobile device.
Let’s focus here. Flash sale sites are based on two models: brick-and-mortar wine merchants who have created alternative web-based sales channels to offer their existing inventory at discounted prices, and merchants without a traditional retail license who have created websites that serve as a channel. producers and distributors to sell their wines.
Through technology, the two have revolutionized the way wines are sold. More importantly, they circumvent the draconian three-tier distribution system by selling directly to consumers. And the impact of these sites grew at compounding rates.
A typical sales pitch: We’ve secured a very limited supply of Three Tier Buster, a 90-point rated red wine blend available exclusively to email subscribers for the next 24 hours or while supplies last. Retail price: $50. Lowest published price: $39.99. Act now for $23.99, a 48% discount; minimum purchase is three bottles (free shipping on four bottles).
How does this appeal to food chain actors?
- Consumers: It’s the thrill of The Deal, an opportunity to buy “highly rated wine” at a deep discount that retail stores rarely offer.
- Producers and Distributors: Flash sale sites offer the opportunity to sell wine through a new channel while building their mailing list. Wines can be current popular offerings, overstock, or leftovers from previous vintages.
- Retailers: a new competitor and a threat to in-store sales. However, several joined the enemy. Virtual stores have sprung up to complement their physical footprint. In our region, www.RyeBrookWines.com It is very popular.
Several current popular sites are worth visiting: www.WinesTillSoldOut.com
(supported by a physical retailer), with wines sourced from Westchester importer Serge Doré Selections; www.ReverseWineSnob.com (Internet Marketer only); www.Last BottleWines.com (BMR); www.WineShopper.com (BMR); www.SommSelect.com (IMO); and www.WineAccess.com (IMO). One of the most original sites is www.Garagiste.com (IMO). Discover his eclectic marketing approach.
Will flash sites become a flash-in-the-pan industry, a hot new thing that’s here today and gone tomorrow? Or will they survive simply because consumers are always looking for a “bargain”?
Nick Antonaccio has been a resident of Pleasantville for 45 years. For more than 25 years, he has hosted wine tastings and conferences. Nick is a Fellow and Program Director of the Wine Media Guild of Wine Journalists. It also offers personalized wine tastings and wine tour services. Nick’s credo: continuous experimentation leads to instinctive behavior. You can reach him at [email protected] or on Twitter @sharingwine.