Wine Searcher interviewed WineBid CEO Russ Mann in celebration of the wine auction website’s 25th Anniversary. He makes an interesting point that is also a bit puzzling.
Globally, wine is the single most difficult product to do on e-commerce especially good, expensive vintage wine. It’s big, it comes in cases, it’s heavy, it’s fragile, it’s regulated and temperature-controlled. Even an expensive couch – it’s big, it’s heavy – or glassware – it’s fragile – but how many things are big, heavy, fragile, temperature controlled and in some places regulated?
In almost every other category of things that are sold online, except for food and beverage, most of them have had 20 to 30 percent penetration. 30 percent plus of all books are sold online, electronics, TVs, phones, all of these categories are now 20 to 30 percent online. Wine is $325 billion globally and last year or two years ago, only $10 billion was bought online, only 3 percent of all wine was bought online.
I find this remarkable and perplexing. Why are wine consumers so reluctant to buy online? No local wine shop can come close to the selection available online and most can’t compete with online prices.
We buy everything from couches to clothes to lamps online. Couches are large; lamps are fragile so those features don’t seem to be obstacles. With couches and clothes, presumably, potential buyers would prefer to try them on for size first, but that hasn’t been a big barrier. Customers are willing to give up an important opportunity, the ability to try the product first, in order to gain the convenience of online shopping. But not wine consumers even though there doesn’t seem to be a comparable barrier. Yes, there are shipping costs, but that’s true of couches and clothes as well, and subscription or membership programs eliminate that obstacle anyway. Temperature control? Sure, for some fragile wines but, for the most part, only during the summer.
On the other hand, there is that pesky problem of having to be available to receive and sign for the product. We probably shouldn’t underestimate that obstacle for people who work outside their home. That hassle probably outweighs any added convenience one enjoys from buying wine online and there doesn’t seem to be a technological solution to it.
Or perhaps the vast majority of wine consumers don’t care much about the main benefit of buying online—better selection. Perhaps the ability to buy Albariño from Uruguay or a Cabernet Franc from Croatia only matters to a few of us wine geeks.
At any rate, I’m not sure we have a good explanation for why online shopping for wine has lagged behind other products. It might be an important question since wineries may be leaving a pile of money on the table.