In Feb 2018, we studied the online footprints of 317 wine cellars to see, amongst others, if they’ve adopted eCommerce in one form or another. We cannot share all the details of our findings, but our client did give us permission to share some highlights.
The study was prompted by the dizzying double digit year-on-year growth rates in online shopping – both retail and wholesale. And there are no signs of it slowing down anytime soon.
It’s a feeding frenzy where eCommerce enabled companies are the sharks in the water, and pure-play online and pure-play offline retailers are the hapless surfers getting picked off one by one.
3 Powerful Market Forces Are Reshaping Business and eCommerce
Apart from the obvious enablers like quantum computers, smart phones and better internet connectivity, three powerful market forces are responsible for this feeding frenzy.
The first is the raw power of a handful of mega eCommerce stores.
When they step on you, they don’t even notice. But you will. Their media budgets starve you of both traffic and sales. They silently shape your customer’s online and offline shopping expectations. And their feeding frenzy attracts thousands of small sharks.
Fortunately, it’s not that difficult to thrive in their presence. You simply have to reverse engineer what the big sharks do – adopt and embrace post-digital eCommerce and then bring your A+ game.
The second force is the shift into the experience economy.
Goods and services are no longer enough. People increasingly desire experiences – memorable events that engage each individual in an inherently personal way. What they desire is remarkable experiential theater to delight them. And the line between offline and online theater is disappearing.
The ability to use all five senses in the offline theater gives wine cellars a huge competitive advantage over online only retailers. The smart ones are figuring out how to capitalize on this advantage in the online theater.
The third great force is the low barrier of entry into eCommerce.
The days of huge capital investments and high running costs of eCommerce platforms are long gone. You can literally have a store, with all the bells and whistles, up and running in a few hours. And you can have feet in your store a few minutes later. All, without breaking the bank.
But there is a caveat – like planting unsuited cultivars, using technology and a game plan unsuited for your business situation is a recipe for failure.
Results – Here’s What We Found
44% Haven’t Adopted eCommerce.
These cellars can be divided into two groups:
6% Don’t Have Websites
It’s hard to believe that there are still businesses owners who don’t see the value in having an online presence. They are at the bottom of the feeding chain. And NO – a Facebook Page is not having an online presence.
38% Have A Website
These wine cellars saw the value of having an online presence but are not leveraging it to drive online ordering and sales. Many of them have done a really good job with their websites and social media presences. But by ignoring the eCommerce technology that’s freely available, they also find themselves at the bottom of the feeding chain.
A Whopping 56% Have Adopted eCommerce
They can be divided into 4 groups:
14% Use Legacy Technology
These wine cellars are either using an online form, or outdated shopping cart technology to collect or process orders online. It’s the equivalent of insisting on using a fax machine to send emails. Unless they upgrade to smart technology, they will soon be at the bottom of the feeding chain.
8% Use A Pure-Play Online Retailer
These cellars are selling their wines through pure-play online wine retailers. It’s a definite step up from using legacy technology. But with the growth in the experience economy it doesn’t make any business sense.
A better strategy is to sell to your visitors on the spot, and use pure-play online retailers as additional distribution channels. Like many cellars are doing with their wine tasting, restaurant and accommodation bookings.
14% Run Online Shops Using Enterprise Technology
These business owners either had ambitious dreams or they were ill-advised. We suspect it was the latter as none of them boast the huge inventories and traffic required to make business sense for an investment in an enterprise platform. Their two biggest challenges are justifying the high operating costs and trying to stay abreast of the latest technology.
They have a simple choice – join the ranks of the sharks (switch to smart technology), or feature on the shark breakfast menu.
20% Run Online Shops Using Scalable Smart Technology
These business owners are the sharks. They’ve positioned their cellars at the top of the feeding chain. And we were pleasantly surprised to find that they are the majority.
With an eye on the future, this is the category where everyone should be right now. It’s the only category that puts you in a position to ride the waves of change caused by the 3 great market forces.
But’s it’s not plain sailing. The big challenge facing the owners of these cellars is figuring out how to ride the waves of change. And from what we’ve seen, not many of them have figured it out just yet.