How the internet is changing the way we buy wineBy Lauren Eads
The internet has long played a part in the selling of wine, but no more so than in 2020. With footfall in traditional wine merchants falling, restaurants closing and on-trade agencies seeing their accounts dwindle, the drinks trade has had to adapt, and for many the internet has provided a welcome refuge, offering new ways of reaching consumers and opportunities to diversify and protect revenue.
Online wine sales were growing before Covid, absolutely. But the pandemic has accelerated a trend towards online shopping, transforming consumer habits and shaping new business models in a matter of weeks.
People who had perhaps never considered going online to buy wine before have done so for the first time this year, prompting much of the wine trade to invest in their online operations, and fast.
Consequently, online wine sales have grown exponentially and consumer habits are changing.
“The Wine industry has a long tradition of harnessing the internet to sell wine,” says Richard Corbett, analyst at the IWSR. “The digital environment gives traders the canvass to communicate significant levels of information and without the shelf space constraints of Bricks and Mortar, more wines can be listed – Vivino list 12 million wines.
“As you would expect during the pandemic, wine sales exploded online with retailers in all online channels reporting a surge in growth.”
Many specialist wine merchants have upgraded their websites to some extent this year to cope with increased demand, while restaurants have adapted to provide wine home delivery services, including Vagabond. While several on-trade agencies have turned towards the consumer market for the first time. Meanwhile the number of online-only wine retailers setting up shop has grown, with more businesses than ever working to grab a share of the growing online wine market.
Click through for a snapshot of some of the biggest consumer trends emerging in the online wine market…
5. Big volume orders and mixed cases
With restaurants shut over much of 2020, stockpiling wine for drinking at home has driven larger volume orders. Whether this will continue in the longer-term once restaurants re-open is unclear. However should the online shopping trend continue, and analysts agree that seems very likely, then larger volume orders are also likely. When you don’t have to carry the bottles home yourself, there’s a tendency to ‘make the most’ of a delivery and order more. Single bottle purchases are welcome on the vast majority of sites, but many retailers require a minimum spend to get free delivery, so unless you are spending big on a single bottle, it’s usually more cost effective to order more. Over 2020, the result has been bigger volume orders, usually by the case, with home delivery offering a level of convenience and choice not always possible in traditional retailers or supermarkets.
“Online we see customers buying less often, but with more bottles per order than in our shops,” reports Matt Tipping, CEO at Jeroboams. “We have found that 65% of our web customers are new to us and many of those new customers have been buying mixed cases of wine that they put together through browsing the site. Our online customers seem very happy to try esoteric wines and we have worked hard to make sure that we can offer them as much information as possible to help them understand the style and character of those wines.”
4. Virtual events and tastings
With pubs and restaurants closed and events coming to a standstill, the rise of virtual events and online tastings has been an important tether for retailers in engaging with and retaining consumers throughout 2020.
Before, a highly involved wine lover may have booked a ticket to attend an in-person tasting with an expert or winemaker weeks in advance. Now you can have wine samples delivered to your home and chat about the wines with its winemaker from the comfort of your armchair. This was always possible, in the technological sense, but acceptance of this way of communicating has grown massively as people have become more familiar with new ways of interacting online. For online retailers such events have become a vital part of their approach to building trust in their brand and developing a community of engaged consumers.
Online wine retailer Honest Grapes has fully embraced virtual tastings and events, something its founder Tom Harrow intends to remain at the forefront of. “We are fielding enquiries from Australia, the US and Europe. If I had said to our corporate clients in January let’s not meet up let’s get everyone on a Zoom call, they would have said what? And now it’s de rigueur. The benefits for winemakers are huge. You can engage directly with audiences miles away. That’s another area where tech is useful, allowing winemakers to engage with consumers without having to leave the winery.”
3. Wine Clubs and experimentation
If 2020 was a Mr Men book, it would be Mr Boring. With not a lot else to do, wine lovers have seemingly been looking to mix up their wine racks by exploring new regions and grape varieties. And the internet is a tonic for those looking to try something new. Want to try an Orange wine from Croatia? A pet-nat Retsina from Greece? The internet will deliver, making the search for oddities and rarities easy, and with limitless shelf space.
Some brands have reported an unexpected uplift in sales during lockdown, including Gonzalez Byass UK, which reported a rise in Sherry sales during the Covid-19 lockdown period, with Nielsen data showing a rise in value sales of the fortified wine peaking at 124% in April, and remaining at 93% even after hotels and restaurants started to reopen. It attributed to the lockdown and Brits who were looking to explore new wines.
Meanwhile online wine clubs, which offer the convenience of your wine selection being chosen for you and delivered direct to your door on a regular basis, have never been more popular, with many online retailers launching new and innovative clubs. Online bottle shop LittleWine launched this year, stocking “organic+” wines from small growers, alongside wine club membership, which offers the option of 2, 4 or 6 natural wines delivered each month, along with a ‘backstage pass’ giving access to the retailer’s content platform, featuring video content and feature articles on the people behind the wines. “We aim to make wine more visual and fun – a little more David Attenborough, a little less textbook,” says co-founder Christina Rasmussen.
2. Increasing interest and accessibility of wine education
With (potentially) more time to spare, 2020 has afforded wine lovers more time for personal pursuits, with wine education seemingly one of the areas that has seen a spike in interest.
“It used to be that you bought a bottle of Champagne to look cool in a social setting,” says Richard Halstead, CEO of Wine Intelligence. “The aspiration now is to learn something about it so you can talk about it, a bit like book club. The other element is ‘I just want to do it for me’. Not to show off to others, but for personal fulfilment.”
The WSET has reported strong growth in online candidate registrations this year, with numbers almost trebling to 14,000 for courses in 2019/2020, representing 15% of annual candidate numbers, compared to 5,000 candidates (5% of annual candidate numbers) in the previous year.
“Many people have had more free time to pursue their passions and have taken this opportunity to register for a WSET course,” says Ian Harris, CEO of the WSET. “One new student confided that he had bookmarked a Level 2 Award in Wine months ago but it wasn’t until the second lockdown that he finally got around to signing up.”
Wine retailer Humble Grape took its WSET-accredited courses online this year, reporting a clear increase in the number of students taking up wine education over lockdown. “We have taken our in-person classroom teaching and are replicating it online and are now able to reach a wider audience all over the world,” says Desiree Russo, wine manager. “I definitely see the appetite for online education in general not going away any time soon. There has been already a shift towards online education even pre-Covid because of consumers’ lifestyles.”
1. Acceleration of new business models
While there will always be a place for traditional bricks and mortar retailers, we very much hope, if 2020 has taught the wine trade anything, it’s that adaptability in the face if adversity is key. Over the course of the year countless retailers, restaurants and agencies have diversified into the online space, targeting the direct-to-consumer market in some cases for the first time. While physical shops remain open and key to many business operations, the pandemic has undoubtedly sped up the move to online channels and evolution of new business models, making online a necessity, rather than a choice, to the survival of many businesses.
“There will always be a place for a good local independent merchants – it’s the background I came from and that model and ethos is what we have worked hard to deliver online and through our events,” says Harrow of Honest Grapes. “People like popping into their local wine merchants and I hope they survive. I have lots of friends and colleagues working in that area, but it’s clearly going to be an ongoing challenge and the operations that will do best are not necessarily the biggest and most powerful brands, but those that can adapt to he changing circumstances, and adapt quickly.”