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

May 18, 2017

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Alongside Marketplaces, White Label Services Emerge

March 22, 2019

 

Published in the July 2017 Beverage Media journal's "Talkin' Tech column

 

 

Leveraging online marketplaces to increase overall sales is not a new strategy for wine and spirits retailers.  Wine-Searcher has been “The Marketplace” for connecting consumers and retailers for 19 years and has 1,000+ partnered stores in just the US.  However, in the last 5 years, retailers--especially those in large cities--have received overtures from a number of newcomers including Drizly, Banquet, Thirstie, Minibar, Delivery.com, and eBay, who look to shake up how consumers buy wine.  The influx is both exciting and worrisome for stores.  On one hand, new channels for business mean more ways to get sales.  On the other, these services more tightly control the relationship with the customer and typically provide the checkout and sale.  Only after the purchase does the transaction funnel to the retail for order fulfillment.  In contrast, the older marketplaces like Wine-Searcher, Google Shopping, and Shopping.com simply refer traffic to the retailer website.  For this reason, participation in these newer marketplaces means more sales, but it also means yielding a chance to build a direct relationship and loyalty with the customer.   

 

To work strategically with these marketplaces, retailers should make a conscious effort to still use the majority of their available resources to focus on growing their own brand and business.  Exclusively relying on marketplaces for sales has already proven to be a dangerous and vulnerable position, as a shift in policies can pull the rug out from underneath partners--like when Amazon booted wine retailers from their site in 2013.  Still, getting in front of the marketplaces to sell to the customer directly requires sophisticated technology, which, if stores had to develop completely in-house would be simply prohibitive.

 

That said, alongside the emergence of many new competing marketplaces have surfaced new, white-labeled services that aim to assist wine retailers in growing their overall business (and help compete with well-funded start-up marketplaces).  Deliv, a Bay Area-based company, which includes UPS among its investors, is the most recent addition.  Recognizing the logistical and staffing challenges in offering professional delivery, Deliv supplies the trucks and drivers and offers local delivery on behalf of the retailer.  What’s more, the service provides a dashboard for the store to manage their delivery policy (when, where, and how quickly they offer delivery), and integrate those settings with their own eCommerce website and mobile application’s checkout process.  Not surprisingly, two other companies that provide white-labeled versions of mobile apps and eCommerce websites, respectively, Drync and BevSites (yours truly) have integrated Deliv with their own products.  

 

Using marketplaces to drive sales can be effective, and stores should explore any avenue that will yield more business.  However, retailers should not rely on the extra sales as consistent, long-term revenue.  The best policy for the wine retailer is to think of themselves, their business, first: dedicate themselves on growing their own profile through their own resources and available white-labeled services.  And, then, finally augmenting that business by participating in profitable marketplaces.

 

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