Wine ecommerce sales are growing, but independent wine shops have an advantage over direct-to-consumer sales.

WHAT HAPPENED: Despite the rise of direct-to-consumer wine sales, brick-and-mortar wine stores can continue to benefit from in-person interactions, particularly if they are able to strike a multi-channel strategy.

Why it matters

  • Direct-to-consumer wine sales rose 11.6% in 2018 and DTC wine now accounts for 10% of the wine retail market outside of bars and restaurants, according to Sovos and Wines Vines Analytics. At the same time, apps are streamlining delivery—since December 2018, Drizly has raised a total of $67 million to grow its one-hour delivery service, which pulls from 1,000 brick-and-mortar liquor stores in the U.S. and Canada. In 2017 alone, the company’s revenue grew 61.8% and it accounted for 19.2% of online alcohol sales, compared to 19.3% from and 8.1% from Fresh Direct.
  • But the change in the wine retail landscape doesn’t necessarily spell death for independent wine sellers, a testament to the importance of personal interaction between buyer and seller. Stores and wineries offer information and experiences such as wine tastings, flavor pairings, and recommendations that customers simply can’t access online. Attendance to winery tasting rooms remained relatively flat between 2014 and 2018 and while 61% of winery sales were direct-to-consumer in 2018, the Silicon Valley Bank’s Wine Division found that all of these DTC sales were preceded by an in-person visit to the winery first. As with other industries, the wine market’s ability to stay afloat is dependent on its adaptability to multi-channel retail and the logistics of shipping heavy and fragile bottles. Striking a virtuous cycle between offline and online will also help independent sellers stay on top of larger mass retailers such as Walmart, Trader Joe’s, Target, and possibly Amazon, which are increasingly taking on private-label wine and selling it at affordable prices.