Aldi’s online wine shop ‘mixed blessing’ for indies
Aldi’s online wine shop may open up the market for online wine retail and provide a boost for independents with a strong online offering, one drinks industry expert has claimed.
Tim Wilson of the Wilsons’ Drinks Report, argued that other retailers were likely to see the discounter’s plans to roll out a trial in the 1Q 2016 as a “mixed blessing” as it shows consumers online can be a serious place to buy wine.
“It is obviously a strategic move to say ‘we’re not just a discounter with a few bottles of wine, we are a serious player’,” he told The Drinks Business. ”It shows the battle ground is now wine.”
“Some independents don’t take online seriously – the ones that do are doing very well – but some only have a token presence and those are the ones that will suffer. You have to drive it hard to make online work.”
Aldi’s has confirmed the move is part of an overall online investment of £35m, which includes the launch in Q2 of ‘Specialbuys’ – bulkier items such as camping gear, power tools. It will sell wines exclusive to the online offer, as well as wines available in store. However in a conference call with press and investors earlier this week, Aldi UK and Ireland CEO Matthew Barnes indicated the move came in response to customer demand rather than being seen as a major profit centre – at least in the short term.
Online wine sales account for around 11% of the UK market, but are predicted to rise to around 15% by 2018, according to the WDR, which collects data from 13 online wine retailers including Tesco, Waitrose, Majestic, The Wine Society, M&S and Laithwaites. Sales jumped 9% by volume and 11% in value in the three months to 28 March 2015, the latest report found.
Wilson said the move said a lot about Aldi and Lidl using wine to spearhead its strategy of getting to the middle classes – but it would be interesting to see how it had done its sums.
“Selling wine online has significant costs, given the amount you sell it for, and the shipping costs. If their margins are wafer thing, then they’d have to sell a lots to make it work. But they have such a good supply chain, they can guarantee supply – and you can be sure the PR and marketing will be very slick. No doubt they will have a few tricks up their sleeves – no one saw Lidl bringing out their wine cellar booklet endorsed by three MWs, for example.”
Chris Wisson, of Nielsen said it was symptomatic of retailers seeing online as an increasingly lucrative channel for sales, particularly as many announced streamlining in their in-store ranges. “Its no coincidence that only this week Asda announced its expanded range – I expect we’ll see a lot more online movement from the large retailers in the coming months,” he said. “And as more retailers improve their online propositions, I think we will see this number increase in the coming years.”
In an interview with The Drinks Business in July, Lidl’s UK’s head of beer, wine and spirits Ben Hulme hinted the discounter was considering a move online, but said that a final decision was yet to be made due to the potential complexity of the online sales model.