In partnership with Grapes
Online sales: what is the current situation?
Selling online is a must today, also in the world of wine. While in 2009 online wine selling represented globally only 1% of the off-trade channel, in 2019 and 2020 the percentage increased to 7% and 12% respectively. To demonstrate this new trend, there is also the sharp increase in the demand of assets needed for online sales, such as packaging for bottles shipment: NakPack.
The data indicate a very clear positive trend, and forecasts show that this trend is set to be consolidated in the future.
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How to choose the right channel to sell wine online?
Once we understand the opportunities that this channel opens up for us to increase wine sales, we can move on to more practical part.
Where to start?
First of all, you need to choose the e-commerce platform through which to sell wine online.
For wineries, there are three main channels through which you can sell your products online:
- Own ecommerce platform
- Marketplace
- Flash sales website
Each of these options has strengths and weaknesses that it is important to consider properly in order to better plan your online sales strategy.
Let’s see them together one by one!
1. Own eCommerce platform
It is an online store specifically aimed at selling the products of the same brand.
In the case of owned eCommerce platform, it is the manufacturing company that holds a domain through which the company sells its wines directly to the final consumer, through an e-commerce platform.
The advantages of an own ecommerce platform to sell wine online
The main advantage of this solution is that of personalization: in fact, e-shop managers enjoy full freedom regarding the choices related to the functionality, structure and aesthetics of their website.
In this way, e-commerce becomes an important marketing and branding tool, in which all aspects of the platform can be customized to offer unique shopping experience to users, which remembers in all respects the personality of the brand to which it refers.
The disadvantages of an own ecommerce platform
This indisputable advantage, however, is counterbalanced by some criticality that is well to consider carefully when you decide to invest in a proprietary e-commerce.
- First, an e-commerce must be created: therefore, it will be necessary to allocate specific resources (human and financial) to the deployment of the infrastructure.
- Once completed, e-commerce must be made known. Not only to final consumers, but also to search engines. In fact, every new website must conquer its own share of visibility on the network. To do this, you need to invest a percentage of your budget in strategies aimed at increasing your online positioning through SEO techniques (search engine optimization) or paid sponsorships.
- When eshop is live and visible, the management of all activities related to the online sales process (eg: payment methods, return policies, types of delivery, etc.) but also commercial programming (eg: promotions and discounts) should be considered.
2. Marketplace
The marketplaces are real digital shopping centers; these are commercial brokerage platforms that facilitate online transactions between retailers and buyers
The marketplaces are real digital shopping centers; these are commercial brokerage platforms that facilitate online transactions between retailers and buyers
Marketplaces can be horizontal or vertical.
- Horizontal marketplaces: they host products and companies belonging to the most varied commercial niches (ex: Amazon, eBay and AliExpress)
- Vertical marketplaces: concern a specific sector (ex: Zalando for shoes and clothing, ePrice for technology and appliances)
Moreover, not all marketplaces are necessarily targeted at retail consumers. Alibaba, for example, is a B2B marketplace that provides businesses with an efficient and competitive wholesale service, which has its division specialized in B2C sales in AliExpress.
In all cases, marketplaces are aggregators of brands and products in a space that facilitates the meeting between supply and demand.
The benefits of selling through the Marketplace
There are many and various benefits for manufacturers.
First of all, the possibility of “renting” one’s own space within an existing platform exempts the retailer from the need to invest their resources in the development of own e-commerce.
- Creating your own corner within a marketplace also allows you to benefit from the visibility that the platform already enjoys. This is a significant advantage, considering that, in the case of an owned e-commerce, a significant part of the budget must be aimed at improving positioning and increasing web traffic.
- The main management activities (such as invoicing, logistics, returns, marketing) are the responsibility of the marketplace providers, while the renter of the space on the platform only has to dedicate himself to limited and specific activities (e.g. detailed and precise product descriptions, updating of stocks, definition of exit prices, etc.).
The disadvantages
The main disadvantages include the following.
- Those who decide to sell their products on a marketplace must pay the provider a commission, which is generally interpreted as a percentage of sales. In other words, the margin on each sale, rather than being entirely intercepted by the retailer, is partly “shared” with the owners of the platform. It is the price you pay to avoid the investments and difficulties to which those who decide to open a proprietary e-commerce are inevitably exposed.
- Internal competition: Often, companies on marketplaces sell products that are very similar to each other, with an irrelevant level of differentiation. For this reason, the risk of falling into anonymity is real. Emerging from competitors on the platform may not be easy and requires constant commitment, as well as in-depth knowledge of the internal dynamics of each marketplace.
Finally, marketplaces are hardly branding tools. Since the possibility of customization is reduced to a minimum, the peculiarities of the brand are not very expressed.
3. Flash Sales Website
Flash Sales sites are portals dedicated to timed online sales.
The idea arose during the 2008/2009 recession, which created the need to facilitate the sale of unsold items at a time when the purchasing power of consumers had significantly diminished. The logic of high time discounts therefore arises from the attempt to make the offer particularly attractive for the end user, who is prompted to purchase impulse by the urgency generated by the time limitation of the discount.
Advantages and disadvantages of selling wine online through Flash Sales sites
There are two main advantages of this option.
- Large flash sales groups (eg: Veepee, Westwing) have much higher advertising power than individual companies offering their deals on these portals. This allows you to reach a very wide audience, both quantitatively and geographically.
- In addition to allowing you to free up the warehouse and conclude more sales, the logic of the deal is very effective in attracting new consumers, perhaps reaching a segment that would normally remain cut off from the usual target on the company’s main channels.
Comparison and final thoughts for selling wine online
As we have seen, owned e-commerce, marketplaces and flash sales sites are the three main channels through which a winery can sell its products. Each option responds to a different logic, which it is important to evaluate in the light of the corporate culture to be pursued.
If in proprietary e-commerce the higher profit margins pay off the considerable initial investment, in the case of marketplaces a lower margin is offset by the possibility of enjoying the visibility of the platform. Flash sales sites, on the other hand, allow you to attract new users with unmissable deals, with the opportunity to sell large quantities in a short time for the winery, but with the risk that the logic of the sale will devalue the brand.
It should be noted that these options are not mutually exclusive, as it is perfectly plausible, for example, to own an e-commerce site but also to “lean” on a flash sales site, or to be present on a popular marketplace at the same time. To choose the most suitable strategy, it is necessary to evaluate the pros and cons of each platform in light of the specific objectives that the company intends to pursue.
Grapes is the first consulting company in Italy that supports wineries in the development of online sales, maximizing the opportunities that the online selling offers them and optimizing investments in digital marketing.
NakPack is the ecological system to ship bottles safely chosen by 70% of Italian wineries.
It is Plastic Free certified, approved for shipping by express courier and is the only one able to guarantee a bottle breakage rate of 0.003%.
Contact us now to find out more!
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