UK Wine eCommerce - From Scepticism to Success

UK Wine eCommerce

From scepticism to success
UK Wine eCommerce - From Scepticism to Success

Wine eCommerce is booming. The recent launch of an online 'flagship store' featuring Australian wine on Alibaba’s business-to-consumer platform Tmall.com is just the latest in a string of big wine eCommerce developments of recent years. Globally wine eCommerce has grown by a jaw-dropping 600% since 2006 and now contributes around £3.8bn to the wine industry according to a recent Drinks Business report. UK consumers have, as we shall see, taken to wine eCommerce with a passion and the opportunity for UK wine merchants is virtually limitless. History shows that the road to wine eCommerce success in the UK has been far from straightforward, however, and capitalising on this latest opportunity will require UK wine merchants to learn a new set of skills and approach their business in a new way. To gain some first-hand insight into the UK wine eCommerce market, and how merchants can make the most of the opportunities on offer, online wine veteran and guest blogger Giles Luckett looks at the state of the UK online wine market and finds a future that is bright for those willing to rise to the challenge.

UK wine eCommerce: from sideline to mainline

The online wine market is now worth around £750m or 13% of the UK's total off-trade wine sales. Such figures were beyond the wildest dreams of even the most evangelistic online advocates when I started out in online wine trading in 1999. Back then wine eCommerce was a curiosity, a potentially interesting idea that could, at best, provide mail order wine companies with a way to publish their offline catalogues online and so drive telesales and email based orders. No one took it that seriously as channel and much of the wine trade - particularly agents and traditional merchants - scoffed at the idea.  'My customers will never buy wine from a computer' was the sort of derisive comment I heard a lot and with a certain amount of justification. These were the days remember before broadband was widely available, online security was perceived as virtually non-existent (Amazon would take a cheque!) and web design and user experience were, to put it politely, crude. Then in mid-1999 everything changed as the dot.com boom exploded onto the scene. Suddenly the press was full of stories of start up sites such as lastminute, ASOS and amazon.com achieving vast stock market valuations as the world began to realise that online could be a viable channel for commerce. Even the wine trade started to take notice, and while the lead was taken by wine.com - a site whose very domain name was valued at over $1m - some merchants in the UK were tempted to take the plunge. Around this time Berry Brothers launched BBR.com, Laithwaites came online and the first incarnation of Virgin Wines, Orgasmic Wines, took to the virtual stage. This was an exciting time and one in which many of the fundamental tenets of wine eCommerce were learned, lessons such as make sure you have pictures of the wines, make sure you have a fast customer service response, add content and help and security, security, security, always talk about your customer's security. Alas with the implosion of the dot.com boom in the early 2000s many a plucky wine start-up either perished or was swallowed up by competitors who could see the potential but who didn't want to be burdened by start-up debt. At the time I was working for madaboutwine.com whose proposition of a huge range of good value wines delivered to your door was sound, but with site build costs running into the hundreds of thousands and with venture capitalists demanding their pound of flesh, when the recession came it was lost to us.

Technology to the rescue

After the experiences of the dot.com days, eCommerce generally - and specifically in the wine market - may have been lost to us were it not for advances in technology. Security concerns from consumers were assuaged by better encryption and the banks and other payment providers offering protection to purchasers which opened up the market way beyond the young, early adopters and crucially the development of eCommerce platforms became cheaper. In the early days web developers were (almost) literally worth their weight in gold and could charge what they liked.  By the mid-2000s, however, more and more people had learnt how to code and platforms such as Moonfruit allowed anyone to build their own site. Suddenly anyone could afford a site and there was a new rush of wine merchants coming online and reviving what had at one time seemed like a channel in decline. Wine eCommerce grew and as the eCommerce sector generally grew so delivery services (always the bane of an etailer's life) improved, driving ever greater adoption. The supermarkets, already a dominant force in UK's wine market, seeing this growth started putting their mighty resources into eCommerce which not only expanded the sector but opened up new channels for premium wine distribution. As we learnt at madaboutwine, having a virtual store meant you could offer everything to everybody as you weren't limited by shelf space. So it was that the likes of Tesco could offer fine wines such as McGuigan's The Shortlist at £90 a bottle without having to worry about it languishing on a single store's shelf.  With broadband speeds becoming ever faster, sites more intuitive and content-rich and customers eager to explore wines and wine content, eCommerce continued to boom so that by 2009 it was worth around 7% of the UK's off-trade sales. That though was nothing. Enter mCommerce... mCommerce - or Mobile Commerce - has taken online shopping to a new level. According to eCommerce news, 51% of the UK's online purchasing was carried out on a mobile device in 2015 and that figure is set to rise inexorably as web browsing continues its move from desktop to mobile. For the wine sector mCommerce makes perfect sense. Whether its commuters whiling away a dreary train journey by ordering something for the weekend, wine lovers discovering their cellar is bare or shoppers looking for advice on purchase for something to have with a specific dish, the ability to dive in and out of a wine store from any location is an attractive proposition for buyers. The only way from here is up so long as your website is mobile-friendly, something that many still cannot boast.

What's next for wine eCommerce in the UK?

To say wine online has come a long way in a very short space of time would be something of an understatement. The wine trade is now more accessible, more transparent and offers greater value than ever before.  The future will belong initially to mobile and then to other connected devices - the 'internet of things'. Self-ordering will become more popular as connected wine racks set up orders for you, algorithms and apps will undoubtedly get better at helping consumers choose the right wine and delivery by drone and other automated devices will add a new level of speed and convenience. With eCommerce predicted to be worth up to 15% of the UK off trade by 2019, a truly staggering growth in a sector that has been generally struggling, it is a channel that no UK merchant can afford to ignore, now or in the future. As the Bard of Barking so perfectly put it, 'Here comes the future and you can't run from it...' so the future of wine is online. The millennial post millennial generation are digital natives, their phones are their gateways to purchases and it it's in their hands that your business's future lies.

How to win at wine eCommerce

But enough of the past and postulating on the future, what of today? The single biggest barrier to wine eCommerce success and expansion in the UK is no longer consumer adoption or delivery troubles but eCommerce expertise.  Even though it has been with us for nearly twenty years, the UK wine trade's greatest barrier to thriving online remains a lamentable lack of expertise when it comes to come digital marketing and eCommerce, such were the findings of leading business consultancy firm IMRG in their 2015 report.  And yes, the simple fact is that this is a different way of doing business and new skills will have to learned and honed, but when the prize is as vast as it is and the alternative is business stagnation and shrinkage, aren't these skills worth developing? As someone who has spent nearly two decades working in wine online I can say with authority that the move to eCommerce isn't that hard, isn't that scary and is well worth the effort.  To succeed you just need to take the established principles of service, knowledge, passion and belief and transfer them online. Below I have listed a few basic tips that will help you grasp the eCommerce opportunity: Mobile: Your Site's Best Friend... And Worst Enemy - as recently as 2014 having your website mobile optimised was a nicety. Now it's a necessity. Consumers expect it, search engines demand it and with mobile browsing now accounting for around 56% of all traffic, it's an online investment you cannot afford not to make. A decent web developer will be able to optimise your site for you and self-build platforms such as WordPress and Shopify make it (relatively) easy to create your own mobile site. Make it Easy - irrespective of what device your customers are on, make sure finding what they want is easy, fun and fast. Your site needs to be inviting, clear and the navigation should always be about getting products into baskets. Great wine eCommerce sites in the UK include Majestic, BBR.com, Tanners and MWH Wines - a site that was built using the online shop-builder, Shopify. Shopify is one a number of powerful, self-build tools that can make eCommerce easy. All these sites combine content with product - a perfect recipe for success. Be Descriptive - content is king in all digital marketing and eCommerce is no exception.  Make the time to add tasting notes - your own ideally -and give decent product descriptions that sell and inform.  Doing this will not only help engage your customers but will differentiate you from your competitors and give search engines what they love: original content. Blog - sites with blogs enjoy 65% more custom that those without them, according to Hubpsot. Blogs provide search engines with content, give you a chance to explore your wine passions and give your customers the information they need to make purchases. Get Social - Social Media matters. With over 2bn active users, social offers you a vast audience, just don't treat social as a free advertising board and try and sell; it won't work and you'll get little from it.  Instead use Social as a way of sharing your knowledge, passion and the great wine advice you would give were someone in your shop.  This will build trust and drive traffic and sales, so tell, tell, tell, don't sell, sell, sell. Service and Delivering the Goods - just because this is all done remotely don't think your service can be even remotely inferior to your in-store service, in fact if anything you need to work harder at it. Onsite live chat, confirmation of order emails, site queries that are answered quickly and a delivery service that keeps your promises are key, alas they are all areas in which eCommerce can often be found lacking.

Boom or bust: are you ready to thrive online

We are living in an age of transition, one where the power has shifted from the brand to the consumer, a world where convenience is ranked alongside service and where the High Street is held in the palm of the shopper's hand.  Wine is losing its mystique, but at the same time wine lovers want more and are ready to spend in order to enjoy a greater experience. This then is the world the UK wine trade faces and for those who are willing to learn and embrace change, both technological and operational, it is a golden age of opportunity. 

 

Disclaimer

This information is presented in good faith and on the basis that Wine Australia, nor their agents or employees, are liable (whether by reason of error, omission, negligence, lack of care or otherwise) to any person for any damage or loss whatsoever which has occurred or may occur in relation to that person taking or not taking (as the case may be) action in respect of any statement, information or advice given via this channel.


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