Strategic Sips

Dated: April 18, 2020

The Proliferation of Selling Wine Online

It was already happening, but now it’s accelerating among smaller retailers.

Pre-pandemic wine retailers across the country mostly relied on walk-ins and their reputation within their respective community to curate a collection of fine wine to generate foot traffic. As they now start to pivot towards curbside pick-up and local delivery, the biggest shift of late has been establishing more online sales.

It may seem surprising given how common shopping online is and dependency on having items delivered to our door, but small retailers for the most part have not focused on this channel until fairly recently. No doubt the disruptions of COVID-19 led many to quickly embrace the online channel to add revenue in the absence of people in stores; however larger retailers – such as wine.com, total wine & more, plus other regional stores – have been laying the groundwork for this as early as over a decade ago when shipping laws changed.

The landmark Graholm decision in the Supreme Court back in 2005 forced many states to revisit their direct shipping laws. Over the course of many years, states have applied their interpretation of the decision and as a whole have loosened shipping restrictions for both wineries and retailers. With the 2005 ruling as the backdrop and the jolt of the virus having an impact, smaller retailers are beginning to see the value of a “shop local, ship global” approach.

While building an infrastructure around taking and fulfilling orders for both in and out of state, retailers are conversely creating competition with the same wineries they purchase from that already have an established e-commerce business. For example, if I’m retailer in FL with an online platform, I may be looking at pricing for Winery X and other retail outlets to ensure I’m competitive. Similarly for consumers, I may be weighing options to either purchase from Winery X or the retailer based on price, accessibility, shipping fees, and more.

Based on the turn-key digital platforms available for small retailers and the growth in the channel, e-commerce will continue to expand and the changes we are experiencing will likely remain in place for the long-term. For wineries, its more important than ever before to create added value to the consumer to help further distinguish your brand in a crowded and changing marketplace. This is an apt time revisit your online strategy and platform to ensure you can scale with the category.