COVID-Driven Online Wine Sales Are Here To Stay Post Pandemic
We all know that during this pandemic, as wineries, bars and restaurants were shuttered, we saw a significant increase in online sales of wine, delivery of wine and direct shipment of wine.
However, the question that has been nagging at me has been, once this pandemic is over what percentage of those who have increased their online purchases of wine and delivery/shipment of wine will stick with their increased devotion to purchasing wine in this manner? Will folks put down their mice and run back to wineries, bars and restaurants or will they continue to emphasize convenience via delivery and shipment?
I now have a way to answer that question using data. The answer is that increased online wine purchases is here to say and probably in a significant way.
Researchers at California Polytechnic State University recently conducted a study to determine the following:
(1) Identify the consumer demographics of those that reported that online wine purchases for home delivery increased during the COVID-19 lockdown.
(2) Examine the price of wine purchased by these consumers.
(3) Learn the devices and digital platforms used by consumers to order wine.
(4) Examine the desirable wine characteristics that motivate the consumers to purchase.
(5) Learn how these wine consumers expect to purchase wine after the COVID-19 pandemic.
A number of really interesting and useful data were gathered during the study and its conclusions can be found in an article Wine Business Monthly published last week.
But here is the finding from the study that matters:
“Approximately three-quarters, 74%, of respondents that increased their online purchases for home delivery worked from home during the COVID-19 pandemic”
So, the question becomes, to what degree will work-from-home jobs increase in a post-pandemic United States. Turns out someone is working on that.
Working from home is a great idea for a number of reasons. Take it from me. I’ve done it for 25 years. But it’s also more profitable for businesses as their infrastructure costs are much lower. It’s also good from an environmental and sustainability perspective. Moreover, employees like it. One of the primary problems in increasing remote work has been the confidence of managers, who did not trust employees to be productive.
Global Workplace Analytics (GWA) has discovered that managers have in large part overcome this fear in the midst of the pandemic as they have had to manage employees who could not come into offices to work. The fear among managers is diminishing.
According to GWA, 3.6% of the U.S. workforce worked from home half the time or more prior to the pandemic. But GWA predicts the following:
“Our prediction is that the longer people are required to work at home, the greater the adoption we will see when the dust settles. We believe, based on historical trends, that those who were working remotely before the pandemic, will increase their frequency after they are allowed to return to their offices. For those who were new to remote work until the pandemic, we believe there will be a significant upswing in their adoption. Our best estimate is that we will see 25-30% of the workforce working at home on a multiple-days-a-week basis by the end of 2021″
If GWA’s predictions turn out to be true, this increase in work-from-home activity may be the most important change to employment patterns in a post-COVID-19 world. Now, recall the findings from the Cal-Poly researchers: “Approximately three-quarters, 74%, of respondents that increased their online purchases for home delivery worked from home during the COVID-19 pandemic”.
Yes, the increase in online purchasing and delivery and shipping of wine is likely to continue after the pandemic and is likely to continue with gusto.
The implications of this are significant. The implications impact politics, alcohol regulations and laws, the wine industry logistics chain, and certainly the make-up of the wine retail industry. There are players in the wine industry now that are going to grow much larger than they are today. Moreover, this increase in online sales and the accompanying increase in shipments is going to attract new players to the online wine retail sector that is likely to negatively impact current retailers who can’t adapt to the new reality. And the ripples hardly stop here.
Buckle Up.
True true,
But there is also a pent up demand to attend wine tastings, dinners, and local retailer events.
I agree the online market has made a good foothold, I think it may take a step back as things get more normal. People may also begin to tire of all the packaging and environmental waste involved. How many empty boxes and Styrofoam cubes can you save?
I agree with studies that ‘on-line’ purchasing is likely to continue and even develop. Flexibility for sales, wineries (shipping permitted!) and consumers. And, yes, I agree that working from home is likely to stay or even increase, because managers have discovered that they can ‘manage’ productivity for ‘home-workers’. I, too, have been home-based for ten years, since I left the NHS full-time, simply going out for site-meetings and/or office SMT meetings. Far more efficient and working hours can be flexible. My bosses get a lot more hours from me than they pay for!
Bruce,
I suspect you are correct that there is pent of desire for in person tasting and gatherings. Yet I think this will proceed even as the uptick in online purchases proceed.
Let’s hope the gusto continues long after we get past this pandemic. It was interesting timing in the USA as regulatory hurdles were lowered over the years, logistics companies stepping up to the plate, making for a perfect storm. I long for the day when Italian, French, Israeli, Lebanese wines are sold DTC in the USA at comparable prices to their home markets (obviously allowing for additional charges for shipping costs). We are are trying to help in this effort, but it will take many players to move the needle. As always, thanks for your encouragement and insightful analysis. Cheers, Jacob