Online wine sales are not only increasing but outpacing growth of sales in the traditional retail market. The main driver is the demand from millennials or Generation Y…in other words, those aged 18 to 27.
Online retailing is important in many markets because of the interest it generates from millenials. As Rabobank analyst Stephen Rannekleiv says, “it so happens that precisely this group forms an increasingly critical wine-drinking demographic.”
Late last year Constellation Brands, which owns Constellation Brands New Zealand that produces labels such as Selaks, Kim Crawford, Drylands and Nobilo, announced the opening of Robert Mondavi Wines’ exclusive flagship store online.
The move, Rannekleiv says, highlights the growing opportunity that online sales present to wine marketers around the world, but also reflects the rapid pace of change occurring in online platforms across different markets.
Although e-commerce channels continue to gain importance for wine marketing, they face various challenges in key markets.
“The rising number of e-commerce platforms increases opportunities for wine marketers, but it also increases the difficulty of truly standing out in the market. Online retailers are seeing a rapid increase in the number of competitors. To remain competitive, they’re being forced to expand their offerings of products and services,” he says.
Wine marketers need to engage with online customers and integrate the brand’s social media platforms into the overall online experience. “Consumers shopping online will also be referencing the brand in either positive or negative ways on social media,” Rannekleiv says. Brand owners can use social media to be part of those conversations to build their brands, and important tools are evolving to support this process.
Rannekleiv also predicts online channels will play an important part for long-term growth, but they must be managed as part of the broader brand development strategy.
“While most wineries recognise the growing potential, the complexity of effectively growing online sales while minimising conflict with traditional channels can be daunting. Few wine marketers seem confident that they were making the most of this opportunity,” Rannekleiv said.