The Art of On-line Wine Sales: An Interview

Posted by Tom Wark on Sep 12, 2005

With so much more interest focused on e-commerce and buying wine on-line after the Supreme Court’s wine decision in May, the issue of how to best sell wine on line has become a hot topic in the wine industry. How should a winery manage its on-line sales? What do consumers want from a  winery’s on-line wine shop? What’s the best way to communicate with consumers?

A number of companies exist to help wineries go a good job of selling wine on-line. INERTIA BEVERAGE GROUP is one such company that has an impressive line up of winery clients. INERTIA helps wineries not only manage their on-line presence, but also helps wineries reach out to their customers. They are good at it.

I contacted INERTIA BEVERAGE GROUP’s president Paul Mabray to ask him a few questions about the world of on-line wine sales. He has some very astute observations not only on how wineries can best serve wine lovers, but on the future of on-line wine sales and even a prediction that access to wine, the prime motivator of consumers fighting shipping bans, will become an issue for retailers and restaurateurs.

FERM: What are the specific technical requirements a winery looking to engage in e-commerce must take into consideration that, say, a clothing or widget retailer does not?

For a winery the winery it is easy to get on-line using our tools.  However, to build them it has many, many levels of complexity.  The wine e-commerce needs to be able to differentiate wine from normal products in order to follow state shipping restrictions, measure volume limits in certain states for compliant shipping , understand "volumetrics" of wine packing  (for example, wine is packed in quantities of 1, 3, 6, 12) , and age verification prevention tools.   Additionally it needs to integrate with many types of companies (shipping, cash register, accounting, and more).

FERM: Currently, wineries tend to put their store on-line and hope for the best. What are the most progressive e-commerce enabled wineries doing to maximize the profitability of their on-line store?

The best on-line stores are doing incredible things like leveraging syndication (RSS feeds) from their sites, aggressive business development through our programs, and dedicating a 1/2 to full time person for their on-line initiatives.   Some are creating excellent on-line communities (lola wines from Fosters Wine Estates) and others are more customer service centric (Humanitas, Luna).  My personal favorites are those that really leverage the concept of "segmentation" so that they truly understand their customers and reward them according to their purchasing behavior.  We are coming out with other profiling tools next year.

The key is that the on-line store still needs customers and getting customers still means going out and getting them – events (both industry and winery) to gather names/contacts, lots of e-bursts — and don’t forget the SEO side of this to drive people to the site.  Another very simple item – something we do – is to have a ‘add to shopping cart’ button – many ask you to buy but don’t make it so plain & simple.

FERM: Why would a winery choose a company like Inertia Beverage Group to help them deploy an on-line store rather than simply build it and maintain it themselves?

Inertia Beverage Group is not only the leader in technology currently, but we are the ongoing leaders.  We spend much of our budget on R&D to help drive our software to the next level.  Building a system like ours requires huge resources – time, money & human – that takes away from core goals of sourcing fruit, making wine and selling it.

Additionally, as the largest e-business provider in the wine industry, we are aggressively negotiating business deals with large portals and traffic drivers to help increase the sales and traffic to our partner wineries.  This is a KEY differentiator from our competitors.  We truly are the wineries on-line partner.   

FERM: You help wineries manage email offers to their wine clubs as well as mailing lists. What have you learned about this kind of marketing? Are there specific types of offers and emails that consumers respond to best?

We paid for a research project and the result was what we call "the Johnston Report" that identified key factors for people buying wine on-line.  The report specifically focused on non-branded wines or wines that consumers had not tried. 

6) Free Shipping

FERM: Being involved in e-commerce you’ve likely been watching the court battles surrounding direct shipping. Where do you think the direct shipping issue is right now? What’s next for wineries to be watching out for?

Direct shipping will continue to grow in the wine industry however it may be coupled with more factors regarding quantity restrictions as well as increased measures to restrict underage purchasing.  Additionally the court battles have done two things – raised awareness of wine in general and raised the awareness that you can indeed order on line.  The next logical step in this awareness that consumers were being discriminated against is for restaurants and retailers to realize the same thing – that they too should have access to any wine – not just those available through the local distributors.

FERM: What’s the best method for a winery to guard against underage purchasers?

Set up gates on the check in and check out process (asking for age at different entry points) and work with a very aggressively responsible common carrier (Fed Ex, UPS).  We are aggressively looking into Checkpoint who was the chosen age verification vendor by the Wine Institute to integrate into our software for additional precautions to avoid underage consumption.  This again illustrates another way that we are more proactive than other ecommerce companies for the wine industry.  Also, make sure not to create programs that target or seem targeted towards underage drinkers (games, etc).

FERM: What makes one on-line story better than another?

I think an on-line story is compelling if the offline story is.  Just like with all branding, there needs to be a distinctive message why your brand is different and compelling to the consumer.  Like Humanitas, or Luna, or Whitmore wines, all of them have a key story that resonates with the customer both on-line and offline.  The key difference of on-line is that your story has to be twice as compelling since the customer is not holding or tasting the wine by looking at your site.