Steve Bachmann
Steve Bachmann
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The Wine Collector

Practical wine collecting advice from Steve Bachmann, Vinfolio's CEO

 
8
Dec
2007

Booming online wine sales - What's causing them?

Categories: Retailing

Wine-related online traffic in the 2007 holiday season is up 35% from 2006 versus 15% for overall e-retail traffic according to a news story this week in Wine Business Online, Online Wine Sales Flourish During Holidays

Additional evidence supporting growth in online wine sales

Vinfolio (which only sells wine online) experienced an even steeper increase of 45% from the prior month.  The chart below shows average weekly new user sign-ups for the last two 4-week periods.  While we are growing rapidly, that increase is much larger month-to-month growth rate than normal.

 

Easier interstate shipping by retailers is NOT a driver in online wine sales growth

As noted in a prior post, 92% of wine consumed by "core drinkers", only 20% of weekly (or more often) wine drinkers bought wine online in 2006.  The reasons to buy online are compelling (e.g., greater selection, better prices, and convenience) and I believe these factors are probably what's  driving 2007's increase.  But a relaxation of interstate shipping rules for retailers is certainly not a reason. 

If anything, while the 2005 Supreme Court decision Granholm vs. Heald caused improved shipping laws for wineries, they've gotten worse for retailers.  For example, Illinois voted to ban out-of-state retailer shipments after 15 years of permitting them while simultaneously permitting wineries to continue shipping.  In addition, Texas is fighting (unsuccessfully so far) to ban out-of-state retailer shipments too.

As the Executive Director of the Specialty Wine Retailers Association, Tom Wark, points out in a Wine without Borders blog post titled Michigan Judge: "Retailers covered by Supreme Court Decision":

"Since that groundbreaking Supreme Court ruling, distributors across the country, as well as some State officials, have been arguing that because the case specifically concerned wineries, the principles of non-discrimination explained in the ruling did not apply to wine merchants, just wineries.

This is like saying that because Brown v. Board of Education was a case argued on behalf of an African American girl, it is still constitutional to pass laws that discriminate against Hispanics. That’s ludicrous. So is the view that wine retailers can be discriminated against when it comes to wine shipment laws."

Bottom line: The true potential of online wine sales has not been realized and won't be until the interstate shipping laws are changed to create a level competitive playing field for retailers.  When the laws are changed, and they will be, you'll really see online wine sales boom.

2 comments:

Great Tip!

Posted by JLD at Saturday December 22, 2007

I have 2 bottles of wine, 1 red the other white from the launch of the then new Vauxhall Astra Mk3 in 1993. I won a dozen bottles in a promotional casino & enjoyed drinking the rest back in 1993 at the time I was not a wine drinker. Because of the laws selling W,B & S. I cannot get any guide in memorabilia. I am wondering if there is a market out there for this kind of thing & if it can be valued?

Rgds
Kevin.

Posted by Kevin Shaw at Thursday March 20, 2008






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