Wine Retailing, An Uncorked Opportunity (were it not for lame laws)

Today I was skimming through this month's Internet Retailer and I was impressed with several things.

1. the general tone of the publication is one of success stories and best practices.  This is refreshing when all we hear is doom-gloom about the economy.
2. The magazine is about a third of an inch thick.  The advertisers are not pulling back ads to this viable audience.  Everything from marketing to analytics to warehousing...and on. Its full of advertisers.  This says something when nearly every other business publication has been reduced to pamphlet size because advertisers are running for the hills.
3. Some great articles on what some very successful merchants are doing online.  There is still a great business there, but the challenges are very steep.

All in all i am thrilled to see this.  Not even sure what made me devote 15min of time to it but i am glad i did.  As an agency fairly vested in eCommerce clients businesses, this was a very cool read for me.

I think the challenges that face online merchants are steeper than ever.  There is no longer the ability to just throw open a store, buy some AdWords and start sellin'.  That no longer scales.  Merchants have to focus on strategy, architecture, UI design, development, merchandising, up-sell, cross-sell, pull, push, viral, email, SEO, SEM, PPC, analytics, testing, scalability, and on and on.  To be a player in the game, you have to bury yourself and your team in the concept and its success...go all in...or be relegated to being what i refer to as Martha's Yarn Barn, a hobby business you spend your hard earned savings on but probably shouldn't. If however, you embrace all thats possible, and focus, there are still a lot of opportunities and markets to tap into, and build a better mousetrap. Unless of course, government(s) over-regulates online commerce.

One particular industry I am fascinated with is the wine industry. The related article below about laws regulating online wine retailers/shops gave me the motivation for this post.

• Read the full article called: Patchwork of Laws on InternetRetailer.com

A confessed wine-o, I am a member of several wine clubs and in addition, I buy a lot of wine online. I have my favorites but I'm always open to experimenting with new brands.  As I read the IR article I realized that I have the privilege of living in Nevada, one if the 15 states that legally allow retail-to-consumer wine shipments. Nine additional states allow a sorta "gray area" acceptance, but could choose to enforce established regulations on internet merchants at any time. 15 STATES - WTF!?  While I can respect every state (except the Silver one) not wanting to legalize prostitution; we're talking wine here folks. Other than Utah, I certainly don't see why there are 34 other states that won't allow this. Some of these states have drive-thru liquor stores, but wont allow a bottle of Zinfandel to grace a UPS truck's cargo bay. The basis of most regulations date back to prohibition. As I digested this, it got me thinking.  Online wine stores are a big business now but imagine if laws change and more states (except Utah) open up their regulations. What happens next is that online wine retailing becomes a land rush. 

"Wine.com CEO Richard Bergsund estimates U.S. retail wine sales at about $25 billion, with between 1% and 2% of that currently conducted online. “Most categories that don’t have regulatory constraints do about 3% to 5% online, so that is where this seems to be going long-term. If it gets to 5%, that would be over $1 billion,” he says."

Great future opportunities await folks like Gary Vaynerchuk, WineZap, WinesTillSoldOut, and others who have a strong hold and online reputation that will always keep them on the top seat.  But, there are also ripe business opportunities for smart entrepreneurs, small wineries, big wineries, and others who want to break into a boom industry. The state laws simply make no sense and hopefully they'll change...someday.

Well thats my story for today. I have been a little absentee from my posting lately because of a variety of personal life changes afoot in my little world. Rest assured my loyal 10's of readers, I am still full of "it".

Till later...drink more wine.

BL

PS
Sparks Farmers Market starts this Thursday, June 12th. Fuze balconies will be open for VIP's (and even some IPs). Call ahead for reservations. :-)

Comments

[Bryan Landaburu says...]

So i had to post a follow on comment to my article here. Today i had an example of exactly what i am referring to when i say "you have to commit and take it to the next level to succeed". Literally HOURS after posting this, the CEO of WineZap sent me a LinkedIn connection request and thanked me for the mention of his company in the post.

This level of reputation management is critical to your success retailers. if you dont do it, someone will eat your lunch (or your grapes).

Nice to meet you Michael. Great site(s)!

In a separate industry Zappos is another company that expresses similar zealous reputation management and Executive visibility. How cool is it when just some guy (me) can have a Twitter conversation with the CEO of such an innovative company.

Lessons are being learned every day. New rules are here.

Bryan

[Jim_S says...]

Good blog on Wine shipping, in case you get some landing here looking for that...
http://shipcompliantblog.com/

And another org advocating getting wine-os their wine unencumbered...

http://www.freethegrapes.org/

(From WineWoot)