Although 2023 saw a decline in online wine sales following unprecedented growth during the pandemic, recent sales numbers suggest this shift is more of a market correction rather than a sign of long-term decline.
According to industry experts, the future of wine e-commerce lies in brands’ ability to understand and adapt to the evolving behaviors and preferences of consumers, especially in the context of varied market dynamics across regions.
“Technology and e-commerce offer a huge number of benefits in terms of the wine purchasing experience,” Guy Wolfe, head of e-commerce insights at beverage industry research firm IWSR, tells Forbes. “Consumers can shop a much wider range of products on the near-limitless ‘digital shelf,’ while having access to greater information about the product or brand and being able to compare prices, reviews by other purchasers and so on.”
Wolfe notes that despite the recent decline, global online wine sales in 2023 remained nearly 40% higher than pre-pandemic levels, amounting to approximately $11 billion.
“The weaker recent performance of wine can largely be ascribed to its greater maturity in the online space—around 7% of wine sales take place online compared to just 4% for spirits and 2% for beer,” Wolfe notes.
This maturity, while beneficial during the pandemic, has also meant that wine e-commerce has faced stronger headwinds as other alcohol categories begin to catch up.
Regaining Market Share With Millennials
To regain market share in the online alcohol space, Wolfe suggests that wine brands need to focus on understanding their consumer base and optimizing their digital strategies accordingly.
“It is essential for brands to understand their consumer base, what they look for online, and crucially, how this varies by ecommerce channel and platform/retailer,” he advises.
By tailoring digital content to specific consumer needs, brands can maximize their impact and value in a crowded online market.
Millennials, especially, are a crucial demographic for the future of online wine sales, particularly in emerging markets. Wolfe highlights that this group is highly engaged in online purchasing, often conducting extensive research before making a purchase.
“High-quality digital content across multiple platforms is particularly important in attracting millennials to a brand and can be expected to generate a strong return on investment,” he says.
This generation’s purchasing behavior, he says, is influenced by their alignment with brand values, making it essential for wine brands to clearly and consistently communicate their identity across all digital touchpoints.
Tailoring Strategies To Emerging Markets
The report underscores significant differences in online wine purchasing habits between mature and emerging markets, necessitating tailored strategies.
In mature markets like Australia and the United Kingdom, online wine sales are dominated by traditional ecommerce platforms such as supermarkets and specialist retailers, catering primarily to an older consumer base.
Conversely, in emerging markets, where wine consumption and ecommerce have grown in tandem, the consumer base is younger, aspirational and more accustomed to shopping online through apps and social platforms.
“In emerging markets, the wine market has developed in tandem with the ecommerce channel and is being driven by younger demographic groups often part of a rising middle class,” Wolfe says.
Therefore, a one-size-fits-all approach is unlikely to succeed, and brands must develop distinct strategies for different consumer groups and markets.
The rise of rapid delivery services, in particular, has also transformed consumer expectations, particularly among younger generations. In markets where quick commerce platforms are prevalent, such as Brazil, rapid delivery is a key driver of ecommerce growth.
However, the logistics of delivering wine quickly present challenges due to the lower value-to-weight ratio compared to other alcohol categories like spirits, and delivery costs can quickly add up.
“It tends to be less of an issue in regions with relatively low labor costs, such as Latin America, hence greater importance of quick commerce here,” Wolfe explains. Rather, he continues, this challenge is compounded in markets with higher labor costs, such as the United States, where concerns over alcohol access by minors have also impeded the development of rapid delivery services.
“Now IWSR consumer research indicates that Millennials and legal-aged Gen Z consumers in particular overwhelmingly expect (and are prepared to pay for) the added convenience of rapid delivery—including for wine,” he says.
To thrive in the evolving ecommerce landscape, wine brands must leverage technology to enhance the online experience. Wolfe emphasizes the importance of creating a seamless and consistent consumer experience across all touchpoints, from digital platforms to in-person interactions such as winery tasting rooms.
“If brand owners are not following up that experience with tailored digital marketing, an online club/subscription service, a strong social media presence, etc.,” Wolfe says, “then they are without doubt missing out on a significant opportunity to grow brand loyalty and ultimately sales.”
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