The last decade has seen a massive shift to online and multichannel selling across all consumer product markets, such that companies’ e-commerce webshops are one of a number of channels used to reach a broader addressable market.
Fine wine operators have commonly seen themselves as different. The desire to deliver a highly personal service, and inventory management that’s complicated, has held back independent wine businesses from developing their business online.
Wine-Searcher, Wine Decider and now Pix provide comparative search engine capabilities for those buyers who know their stuff, and Wine-Searcher has become the most important new business acquisition channel for many fine wine businesses.
That still leaves the largest part of the online market searching for wine webshops that are informative and engage them. Not to forget the next generation of 30-somethings who have disposable income and who are curious about wine. Many of those will not want to engage with vendors in the same way that older private clients got used to.
Market dynamics are changing, with the highest growth companies of the last 2 years having, at the very least, an effective transactional presence. That growth’s been fuelled by lockdowns, lower restaurant spend, and a burgeoning interest in a quality lifestyle at home. At a conference in California last year one of the US’s best wine shops in New York reported barely any growth, whilst clicks and mortar businesses had doubled and tripled their sales over a comparable period.
Preparing for growth means getting your business into shape for e-commerce, and exploring the potential of multichannel; which may be through partner sales channels as it is in CPG markets, or customer segmentation and differentiated pricing and product strategies for each customer group through one’s own e-commerce.
Here are a few key thoughts to check off in preparation for your own business reboot to take advantage of these market shifts:
Mastering your inventory
Keeping track of wine inventory is the most fundamental requirement for a wine business yet it’s a job that’s complicated by the idiosyncrasies of the market: the general lack of SKUs in fine wine; non-physical stock; partial shipping of purchase orders; wines stored on behalf for clients – to name a few realities.
Before you know it, poor data mastering results in mistakes that cost money and customer loyalty; absorbs an enormous amount of staff time due to needing to resort to manual workarounds; and makes it harder to determine product-level and product category margins and profitability.
Mastering wine inventory is the basis for running a business more efficiently and customer success. It’s also the precondition for turning on e-commerce and being able to contemplate multichannel, safe in the knowledge that your inventory is kept up to date in real-time by the platform you use to master your inventory.
Choosing business management software that will support your business goals
For anyone who’s been there, It can be a bit daunting to say goodbye to software that you’ve been using for years but which hasn’t kept up with how you want (or need!) to develop your business. Consequently you’re more than aware of its shortcomings. You’ve adapted to familiar tasks (however elaborated they may be).
Yet, whether a system is getting close to “end-of-life” or is no longer adapted to your needs, making do is no substitute for prioritising systematic business improvement and business development (with all the top-line and bottom-line growth that it implies).
Stockholding strategies for your business
There was once a time in fine wine retailing when to be a wine merchant meant purely being a stockholder; buying and paying for stock you owned to sell or to lay down. So what changed and what are the different models of stockholding?
Configuring your e-commerce
E-commerce is a sales channel, and a point of customer acquisition – needless to say. But it’s much more than that besides; your brand online, a component of customer success, a client portal, a platform to segment customers and to treat them differently.
The implication of that – for all the benefits of e-commerce to be realised – is the tie-in between your business operating system and your e-commerce needs to be seamless.
Knowing at any point in time exactly where your inventory is, what’s deliverable tomorrow, what’s due to arrive and what you want to offer for sale as a future arrival is of course fundamental to taking payment and entering into a contract for supply of goods online.
But so is understanding your combined offline and online relationship with customers (omnichannel), tagging customers into groups, and aligning those groups with product and pricing.
The risk of failure increases without those deep product-level and customer-level integrations and consolidation of transactional activity across online and offline channels. Counter-intuitively, as do the costs of setting up your e-commerce in the first place.