Wine trade needs to wake up to online sales, warns e-commerce expert

By Gemma McKenna

Published: 02 December, 2014

The wine trade needs to reconcile the "inexorable shift" in wine sales online and the product's overall route to market, warns wine e-commerce expert Matthew Protti.

Matthew Protti BlackSquare CEO Matthew Protti warns wine brands have got to integrate online sales into overall route to market strategy

While the wine trade has taken a little longer than some other industries in the shift towards e-commerce, retailing direct to consumers online has shot up in the last three to five years.

That's the view of Matthew Protti, chief executive of BlackSquare, a Canadian firm that specialises in designing software especially for wine e-commerce. Protti says we're now seeing "an inexorable shift" towards buying online. "We need to recognise what's happening and how that fits with our overall route to market," he warned.

Speaking at the Wine Vision conference in London last month, Protti and others considered the greatest opportunities for online wine sales growth.

China's growth in wine sales online has been exponential, said David Pedrol, chief executive of Macro Asia. The growth potential is astounding: one quarter of Chinese consumers buy wine online - and the current 250 million people shopping online there is expected to hit 400 million this year, with the average basket spend growing from $50 to $200.

Protti said that brands need to regard e-commerce as a "multi-step process" with people only deciding to buy online after "having an experience with that brand". This makes even more sense when you consider that 85% of consumers are using Amazon as a research tool, before buying products elsewhere.

He said that companies need to embrace online sales, saying the internet does not pose the same threats to the wine trade as it did to the music business. "Wine is still a physical product," Protti said.

Many brands are now taking e-commerce into their own hands, and operating direct to consumer sales from their own sites. But Protti said "retailers and distributors shouldn't be scared off. They should be glad brands are making it easier to sell in store".

Being able to interact directly with brand owners and stakeholders online boosts consumer confidence too, Protti points out that people "engage more online if they're getting something they can't get in the retail store".

* Look out for the release of Harpers new exclusive in-depth study into how wine is performing online in our new report from Harpers Data & Insights: De-mystifying E-Commerce, Strategies for Growth in UK Internet Wine Retailing. It provides a detailed analysis of the online shopping behaviour of over 1,000 British drinkers, broken down by age-group for every major region in the UK. It looks at overall online spending and where wine sits in terms of how often people are choosing to buy wine online, and which retailers do they go to when they do.

You can pre-order a copy of the report here. It costs £1,250 plus VAT.

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