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Tel : 617-864-1677

84 Sherman Street Cambridge, MA 02140

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An Interview with Tom Wark of the National Association of Wine Retailers (NAWR)

May 18, 2017

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How Market Conditions Affect Wine Sales Online

June 30, 2011

Helping customers and sourcing product is the daily work of running a store and you tend to take for granted the conditions of your local market. A foray into new markets recently reminded me that retailers in some states don't enjoy the benefits of a printed beverage journal or its online equivalent to find distributor pricing. The prevalence of price posting in the North East has been a significant factor in creating the opportunity for the book and the related products Beverage Media provides for the trade.

 

Comparing the conditions in different states it is clear that opportunities for online wine sales are not the same for all stores. In some cases the structure of the local market that supports your store can work against your efforts to grow online. State regulators, wineries, distributors, trade associations often have competing agendas when it comes figuring out rules for operating online.

First and foremost an ecommerce website needs to show the inventory a store carries. If the store doesn't have something interesting to say about their products then the website is likely to become lost in the crowd. A vibrant community with a taste for good food and wine is foundation of a thriving wine store and by extension that store's website. Differentiation on line is crucial and one of the main ways you do this is through your buying decisions.

 

Access to a mix of product sources supports variety in your selection. While some states allow retailers to buy direct from wineries or to sell food, many markets do not. The largest wholesalers do a great job of distributing important brands but you also need to find new products that represent value and give you a story to tell that is different from your competitors. Wholesalers can be important political allies for retailers when it comes to reinforcing local business conditions; however they are diligent protectors of their unique role in the 3 tier system.

 

Stores in several states are restricted from making deliveries to consumers. These restrictions can range from requiring all orders be picked up at the store, to deliveries by store employees only, to restriction on shipping out of the state. These are probably the greatest barrier for a store with ambitions of growing online. While consumers will likely use your website to research a visit to the store, this is rarely recognized as a strategic investment for a store unless there is revenue passing through the shopping cart.

 

In some states retailers compete with grocery and convenience stores to sell wine and beer to consumers. Other states have limits on the number of licenses under the same ownership, or require beer be sold under a different type of license. Depending on your market you may carry all types of alcoholic beverage or if grocery stores offer the convenience of access to mainstream brands your best opportunity may be to become a specialist that offers service and special events. There are definite challenges to competing with a supermarket or big box store nearby, but the opportunity for a specialist wine store is much improved online.

 

Depending on where your store is located you may be lucky enough to operate in an ecommerce friendly market. Before investing in your online presence it makes sense to check your expectations against your local market conditions.

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