This is a great read by Liz Thatch, Professor of Management & Wine Business at Sonoma State University. Direct to consumer wine sales continue to grow at an incredible pace and now is an excellent time to get a DTC Strategic Sales Plan in place. 3.47 million cases of wine were shipped direct from producer to consumer throughout the US in 2013, a 9.3% increase over 2012 and a 21% increase in volume for wines priced $15 and less. Total sales of winery-to-consumer shipments increased 7.5% to $1.57 billion. Read more in this survey published in Wine Spectator November 5, 2014….
Who Buys Wine Online?
A new study finds that hard-core wine fans are making the most online purchases—and they’re older than you think
Posted: November 5, 2014
Online wine sales have been increasing in the United States at double-digit rates for the past five years. But that doesn’t mean they’re a major part of the industry yet. More than 80 percent of wine is sold in grocery stores, wine shops and other brick- and-mortar outlets, according to Nielsen. “Wine remains under-penetrated online at less than 2 percent of all U.S. wines sales,” said Michael Osborne, founder and vice president for merchandising at Wine.com. “Online categories such as shoes and apparel have greater adoption, despite the obvious concern of fit and style.”
Online sales allow retailers and wineries that sell direct to reach a much larger audience. It’s a very attractive possibility. But if they want to expand sales, they need to know who’s buying wine online—and who’s not and why. A new study by researchers at California Polytechnic University in San Luis Obispo sheds some light on these online wine consumers.
Based on a survey of consumers, researchers discovered that online wine buyers are more likely to be male, over the age of 40, married with children and have a higher household income. They also tend to be wine connoisseurs or enthusiasts and spend more on wine than non-online buyers. (An e-mail survey was sent to 3,000 wine purchasers with a 31 percent response rate; 23 percent of respondents had purchased wine online.)
When these consumers buy wine online they are generally seeking higher quality wines from recognized appellations and have a preference for family-owned or small wineries. They are also quite tech savvy and are more likely to use phone apps or tablets to research wine information. But these online wine consumers do not use Facebook, Twitter or blogs any more than non-online wine consumers.
One reason for the slow growth in U.S. online wine sales is the complicated tangle of shipping regulations that differ state by state. In the U.K., for example, where shipping rules are more uniform, online wine sales are currently at 15 percent. Surveyed U.S. wine buyers also cited other concerns such as high shipping rates, online security worries and logistical issues such as signature requirements and temperature during shipping.
Surprisingly, Millennial consumers of legal drinking age currently purchase very little wine online, even though they grew up with the Internet. The researchers discovered the main reasons were that Millennials think shipping costs are too high and would prefer not to wait for a wine shipment. Also, they like to buy wine that they have an “experiential connection with,” wrote the authors, a wine they’ve tasted in the past or one recommended by someone they know.
“Millennials enjoy the experience of physically choosing the wine and reading the labels in the retail outlet,” said Dr. Marianne McGarry Wolf, head of the Wine & Viticulture department at Cal Poly and a study author.
Though online wine sales currently constitute a small percentage of sales, most experts agree that the channel will continue to grow, especially with Amazon entering the arena in 2012 and large wine retailers such as Total Wine and BevMo expanding their web presence.
“We believe that it is important to share with the wine industry that the online purchaser spends more on wine and is an engaged higher income married male that enjoys talking about wine and uses both print and technology for wine information,” said Dr. Wolf. “Further engagement with online purchasers will likely lead to additional purchases.”
What’s less clear, however, is how wineries and retailers can broaden their appeal to a larger group of online customers.