In the coming years, we can expect a sharp increase in the number of online wine stores. This is according to a trend report by Sana Commerce, a provider of ready-to-use online store software that integrates with Dynamics 365 and are therefore very familiar with current market trends. Beverage retailers that derive a significant portion of their revenue from wine sales should also take note. We see five key reasons why the wine industry is currently ready for digitization and e-commerce.
1. Wine producers are moving toward digitalization and expect the same from their distributors and retailers
Investing in online stores to sell wine isn’t always—or solely—a spontaneous decision on the part of distributors and retailers. Often, it’s also a necessity if they don’t want to jeopardize their partnerships with certain wine producers. The major wine estates have, in fact, been moving toward digitalization for some time now when it comes to ERP software, production, follow-up, transportation, … They already have a digital mindset and expect their channel to implement digital initiatives as well. For example, by adopting ERP software such as Drinkmaster 365.
First and foremost, it makes sense to give customers the option to order through an online store and have the wine delivered wherever and whenever they want. Approximately 40% of all investments in innovation within the wine sector are therefore focused on these delivery services. However, there are also many other options that truly add value to the online store, such as smart technology that learns customers’ preferences and, based on that, recommends products tailored to their personal tastes.
2. Customers are also increasingly asking for online sales
Just as with other food products, customers are increasingly the ones driving demand. Convenience and time savings certainly play a role in this. Wine and beverage retailers would therefore be wise to ensure they offer this option to their customers if they don’t want to lose them to competitors like F1 supermarkets, which already offer comprehensive online stores.
As more and more wine merchants and liquor stores launch online stores, the competitive disadvantage for those who do not yet sell online is growing. Today’s customers simply expect the exact same service and ordering options as they do for other products. Some customers choose to order online and have their purchases delivered to their homes, while others prefer to place an order through the online store and pick it up in person at the store. Finally, there will always be customers who prefer to come to the store to browse and select their items. As a wine retailer, it’s important to keep all options open for the customer. Moreover, this omnichannel approach is a key advantage that beverage and wine retailers have over ‘pure players’—who sell exclusively online without a physical store—or over producers who might start selling directly. Good business software specifically designed for wine and beverage retailers is a must for this.
3. Producers are increasingly selling directly to consumers
Wine producers themselves have also come to understand what the end customer wants: we’re seeing more and more producers selling directly to consumers. The numbers speak for themselves: 62% of wine producers now consider direct sales to consumers to be their fastest-growing sales channel. Although it accounts for less than 10% of their total sales, it generates about 20% of total profit—profit margins are simply higher than when selling through wholesalers. For small producers, profits are even higher. So you can imagine that they’d be very eager to grow this channel at the expense of distributors or retailers.
4. There is still room in the wine e-commerce market
The online wine sales market is still in its infancy, and the playing field is far from defined. There are already a few local players, but no giants yet that dominate the segment. So there is certainly still room for new online stores that can help shape the landscape. Wine and beverage retailers who are now building an online store that prioritizes ease of use and customer focus can, as a result, capture a significant share of the market’s revenue.
5. Current online wine stores do not meet expectations
In many cases, existing online wine stores fail to meet the expectations of the modern wine lover. They lack appeal and are not responsive—that is, optimized for use on smartphones. In short, they do not offer existing or new customers a pleasant online shopping experience. This presents a great opportunity for companies that do use tools to provide their online store visitors with a personalized online service.
