Wine Intelligence Report Stating The Obvious?

Vinted on July 29, 2015 binned in wine buying, wine news

If you have about $2400 handy, you can buy the latest report from Wine Intelligence on US Internet and Social Media utilization with respect to the US wine market.

Or, you could invest that money and just go with your observations of the obvious when it comes to social media and wine. At least that’s the vibe I am getting based on the press release highlighting the findings of the report.

Here’s a sample (emphasis mine), followed by my snarky-ass comments:

While 58.5 million of regular wine drinkers – defined as those who consume wine at least once a month – say they research wine online, and around 30 million make online recommendations, fewer than 10 million buy wine online, suggesting that many wine shoppers still need convincing that the internet as interesting, convenient or as good value as going into a shop.

Use of Twitter has more than doubled since 2011.  Sourcing information on Facebook has grown from one in five to one in three regular wine drinkers, and Youtube is used by 27% of them, Instagram by 24% and Snapchat by 20%, all from a standing start.  But just 30% trust posts on social media sites against 83% for advice from friends, family or colleagues, and 76% for wine shops.”

So…

A full one-third of those making wine recommendations online go on to buy wine online, totaling upwards of ten million people, and we’re using adjectives such as “only” and adverbs like “just” to describe that action? What. The. HELL?!??…

Apparently, wine behaves exactly like, oh, almost every other product in that more people trust their friends and the experts hired specifically to assist buying decisions at the point of sale than they do the Internet. In other news, water is still wet?

Let’s ignore the fact that wine’s low online buying conversion rate might have something to do with the fact that we have outdated laws that specifically limit the ability of consumers to purchase wine online these days in the US. I think the more important news is that almost a third of regular wine consumers do trust Internet recommendations when it comes to wine purchases. That seems pretty high to me.

In their defense, the Wine Intelligence researchers acknowledge as much in the press release (emphasis mine):

“One in three use the internet to look up information about prices, and 38% use social media to stay up to date with discounts and promotions.

The use of social media to find out about all aspects of wine has increased rapidly and there’s little reason to believe that it will slow down.

It might not be too long before blogs, Instagram, Facebook and Twitter are taking over from more traditional sources such as books and magazines as the main sources of information for potential shoppers.

The links between social media and online retailers will help to drive further growth of ecommerce in future years.”

So… social media use is on the rise and becoming mainstream, and garnering more trust over time from wine consumers (just as is happening with every other product, everywhere). Now… where have we heard those gems before?

I’m not discounting anything that, based on the press release, has been concluded via the Wine Intelligence report. I just don’t think I’d be spending over two grand to read it and reinforce the view of the obvious.

Cheers!

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    Comments

  • Michael Brill


    BTW, who are you arguing against? Nobody on the planet thinks the internet is irrelevant. I promise. It’s a matter of degree of relevance and – the most important thing – what can we do to improve that? When you come at it from a “problem solved!” perspective, it doesn’t encourage the debates that lead to real innovation.

    Having said that, aren’t you a teeny bit embarrassed building your argument on a set of stats that says 20% of people get their wine recommendations from Snapchat? In other words, Snapchat is almost as powerful as Facebook in its impact on US consumer wine buying. My guess is that the full report includes 15% who get recos from Gremlins (the car, not the cute monsters).

    Half of the US wine drinkers – 30 million people – *make* wine recommendations online? Really?

    If that’s true then it highlights the major weaknesses of all these studies in that it treats everything in a binary fashion. If you once bought a wine because you saw a tweet that reminded you of a wine you wanted to buy then you’re in the Yes column. Even though 99% of what you buy has nothing to with (ahem) Snapchat. Really, you just need to look at retail sales data that shows < 5% of wine being sold online in the US to see the facts.

    (Outside of Philadelphia and Utah) Shipping restrictions really don't have such a huge impact on online wine buying. It's friction for sure, but it's not a fundamental problem. That really lies in #1: the fact that "wine is sold, no bought" and yet nearly all of the internet consumer experience is about shopping and buying. That is, the internet is currently a poor substitute for someone who *sells* you a wine (even if you think it's a recommendation, they're selling). #2 problem is that buying wine online is inconvenient. With some insane portion of wine being consumed with 24 hours of purchase, you're now limiting the audience to those that either have a lot of wine and/or are looking for something special. People aren't home to get their boxes and don't want them shipped to work. #3 problem is that wine is expensive to move around. If you want 3 bottles shipped to you across the country then the cost is something like $7-$8/bottle. That makes it infeasible for the 95+% of wines that are < $20 or so. And so on. You've got to get through these issues before you even discover wine can't be shipped to you.

    Look, there needs to be some fundamental changes in what our online wine world looks like. What we currently have is crap and you know it's crap. Stop pretending like the problem has been solved and use your voice to drive the industry to do something better.

    • 1WineDude


      Michael:

      1) Calling bullshit on you on this one. I’m arguing against the potential value of the report. If you’re reading “problem solved” into the commentary on 1WD, then you’re not really reading the commentary on 1WD. If anything, I’ve said that wine is terrible at digital / online. And if some of those discussions haven’t engendered real debate, I will eat my shoes: http://www.1winedude.com/how-bad-is-wine-biz-at-digital/

      2) I’m not building an argument on their stats – at least, not entirely. I actually agree with most of your points regarding the report, however you need to bear in mind that retail only captures part of the market, and it’s NOT the part that would most benefit from DTC (that would be smaller fine wine producers, and the consumers who want their wines). Having said that, every consumer who shares something about a wine on any online wine channel is, in fact, making a recommendation. Whether or not you consider that recommendation worth considering is irrelevant – that person very well may have some friends/followers who will consider it seriously, and their dollars are probably green.

      3) I don’t really understand your thoughts on shipping. It’s never been easier or less expensive for wine producers to engage potential and existing consumers directly (via the Internet) than it is today, and yet many of those consumers (not just in Utah or PA) cannot have the wines shipped to them. The consumers you describe would likely be happy buying wine via the selection at stores and supermarkets. But passionate consumers, who make up an enormous percentage of the fine wine purchases in the US, can certainly find ways around the inconveniences you describe. I do not believe that the Internet is an answer to hand-selling wine, apart from being one of the most efficient ways in history to share wine recommendations and tell a story, which can in fact help to sell a product to the right consumer.

      4) Online for wine is crap. Agreed – but my argument has always been that this is a result of wine producers having spent decades not having to care much about their end consumers, and having to care more about selling to customers/intermediaries within the three tier system. How in the hell is that problem solved by using the Internet? It’s not, and I don’t recall ever saying it was.

      • Michael Brill


        1. Pointing out that wineries are morons because they don’t get digital by using some general stats for the basis of the argument isn’t debate. Wineries can’t figure out digital media because, well, they can’t. I know you don’t believe it, but wine is not like every other industry. Imagine that every restaurant in the world moved to your block and you had to figure out where to go for lunch. That’s wine. Or maybe if you had to spend $20 on a song before listening to it in the hopes you will like it. That’s wine. What’s missing in this whole dialog is *specific* best practices for wineries. Oh, and success stories that aren’t from 2009.

        2. Again, it’s a matter of degree. If someone sees a bottle of Latour in the background of a boob shot on Snapchat and you want to call that a recommendation and rely on a butterfly effect argument to translate that into a transaction, then I guess I can’t really argue with that.

        3a. I’m not saying shipping restrictions have zero impact… I’m just saying that the impact of shipping restrictions is exaggerated and is less important that other factors that I mentioned.

        3b. I *do* believe the internet will become a great place to hand-sell wine. A bit of a digression but I’ve grown to believe that it’s not stories that sell wine, but it’s people who sell wine. That is, it’s your relationship with an individual that will drive you make a purchase. The internet has proven itself pretty good at creating relationships between people and that is something I can see directly translating to wine.

        4. Again, it’s not like wineries are castles of arrogant consumer disinterest. They need to be led by the hand. They need more success stories. The need to understand how their investments translate into incremental revenue. What do they get? “You guys just don’t get it. The internet has transformed every other industry. Get with it. Spend your money with this great viral video (70 views) and then we’ll fire up our FB ad budget to pay $1/user to get them to like our FB Page and then we’ll use that pages 10%, er 8% , er 4% organic reach to send funny pictures and recipes on #winewednesday.” That is the reality for wineries. Don’t blame them. Help them.

        • 1WineDude


          Michael – You cannot give wine brands custom-made solutions about how to interact with consumers online on a forum like this one. It can only ever be high-level, until those brands have well-designed marketing plans with goals, into which online can be woven. When I’ve been hired to give talks on this stuff, we get into a bit more detail by way of practical examples, recent success stories, and potential next steps. I get good feedback from those and continue to get hired, so there must be some value being provided there. Now, if you’re arguing that you dislike the *tone* of the high-level advice/commentary here, well, I can’t help you on that one, it’s not going away any time soon! :)

          Your interpretation of where wineries / brands ought to spend their money with respect to online is totally off-base. We are at the point where those who feel lost need to do two things: 1) Start to utilize their skill in consumer interaction from the tasting room / newsletters / etc. onto online social channels, and 2) hire a PR group that knows what it’s doing to help them understand what to do, how to do it, and which aspects make the most sense for their specific goals (the days of trying to wing it on their own are pretty much gone now).

          I don’t think wineries are arrogant (not all of them, anyway); they had a model that worked for a long time. But consumers largely don’t like that model now. The impacts will continue to grow, I argue only that they have been delayed because the wine business has been artificially buffered via the three-tier system and its attendant regulations.

          I think your 3b point is well-stated, and that personal touch has been a recurring theme in every panel discussion or speaking gig I’ve ever been involved with pulling off (backed up by recent research, etc.).

          • Michael Brill


            OK, I await your next inflammatory post for my over-the-top response. Until then. ;-)

            • 1WineDude


              HA! Well, look, I dig the debates, Michael. I’m totally ok with differing opinions, and hopefully I’ve conveyed that I don’t totally disagree with some of what you’re saying here (in fact, I find some of quite eloquently stated). Cheers!

              • Michael Brill


                For sure… and I’m completely aware of my exaggerated, contrarian perspective on, er, everything. For better or worse, I find the only way I can learn in a forum like is through polarization. I’m not so good on the +1 stuff.

    • Bob Henry (wine marketer)


      “In other news, water is still wet?”

      Wait. What?

      Dry ice isn’t wet . . . other than from the incidental frost from moisture in the atmosphere.

      (Yes, I know that it comprises two oxygen atoms bonded to a single carbon atom. Whereas water comprises two hydrogen atoms bonded to a single oxygen atom.

      I just wanted to have a little wordsmithing fun to break up the food fight that erupted on these pages.)

    • Tom Wark


      Michael,
      Shipping restrictions DO have a huge impact. Consider that only 14 states actually state in their laws that wine retailers may ship wine direct to consumers. And none of those states include NY, IL, FL or TX. It’s a HUGE issue.

      • 1WineDude


        I’m inclined to agree with Tom on this one.

        • Bob Henry (wine marketer)


          We debate the measurable impact that wine bloggers have in “moving the needle” on retail sales, through their favorable reviews.

          Their tout’s “media reach” is national — even global — but most wines’ distribution is a crazy patchwork of states . . . rarely all 50 states nationally.

          A wine enthusiast, reading that blogger praise, may be thwarted by home state law from ordering a bottle from out-of-state.

          What recourse does s/he have?

          Flaunt home state law (abetted by a conniving wine retailer) by surreptitiously taking delivery of disguised wine shipments, or drive across the border and shop/retrieve deliveries out-of-state.

          NY, IL, FL and TX residents, you have my sympathy.

          • 1WineDude


            Bob – that’s pretty much it!

  • Bob Henry (wine marketer)


    Michael highlights the Achilles heel of wineries embracing DTC as some sort of panacea: shipping.

    Specifically, two issues:

    — the high delivery cost per bottle, and
    — the inconvenience of taking delivery at home or at one’s place of employment.

    The three-tier distribution system addresses these twin issues by having wines available every day on the shelves of fine wine stores and grocery stores — facilitating “grab-and-go” purchases (since a high percentage of wine is consumed domestically within 24 hours of its purchase).

    Per-bottle delivery charges become progressively lower (as a percentage) as the selling price rises. And many online resellers (e.g., WineAccess) will waive the shipping charges on purchases of 6 or more bottles.

    • Bob Henry (wine marketer)


      On the subject of DTC high delivery cost per bottle — and a winery’s response following a mailing list customer uproar — see thIS blog entry:

      “Listening and responding to customers…”

      Link: http://www.coloradowinepress.com/2014/07/listening-and-responding-to-customers.html

      “When I finalized the purchase [of 2011 Brosseau Vineyard Chardonnay Sparkling Wine and 480 bottles of 2012 Bedrock Vineyard Sparkling Old Vine Zinfandel], I noticed that shipping was $25 for two bottles. I’ve paid close to that (per bottle) before, but still cringed that I was basically adding 25% to my cost to just get the wine sent to me. I knew I wouldn’t see the wine sitting on a retail shelf anytime soon, so I bit the bullet and ordered the wine.

      “So did hundreds of other people. Within minutes other wine geeks posted their order numbers, over on WineBerserkers.com, as they tried to not sully their keyboards with their effervescent glee.

      “And then the complaints came. No less than 30 minutes after the release went live, a vocal few complained of the high shipping costs. And yes, $12.50 per bottle (shipping was a flat $25 even if the allocation was only one bottle of the Brosseau!!) is an outrageous shipping charge. . . .”

      • 1WineDude


        Bob – I’d add that the three tier system isn’t required to address those issues. The market can and has done that with other such products; the issues are real, for sure, but the 3-tier “solution” isn’t the only viable one.

        • Bob Henry (wine marketer)


          The “three-tier” distribution system is an “efficient” solution (to widely dispersing wine geographically), but not an “optimal” one.

      • Bob Henry (wine marketer)


        Oops!

        So much for taking the easy path of “lifting” text from Kyle’s original blog piece, and pasting it into my comment.

        The bracketed phrase should read:

        [of 2011 Brosseau Vineyard Chardonnay Sparkling Wine and 2012 Bedrock Vineyard Sparkling Old Vine Zinfandel]

        Kyle might love his Bedrock Zin. But I doubt it loves it 480 bottles worth.

  • Bob Henry (wine marketer)


    “. . . wine is not like every other industry. . . . [what if] you had to spend $20 on a song before listening to it in the hopes you will like it. That’s wine.”

    Movies are like that. Sure you can read the reviews [*], but you still have to experience a movie firsthand before you can form an opinion on liking it or disliking it.

    [* Substitute the term “wine review” for movie review . . .

    Excerpt from the Los Angeles Times “Calendar” Section
    (March 9, 2010, Page D8):

    “[Movie] Critics’ Ranks Thin Out”

    Link: http://articles.latimes.com/2010/mar/09/entertainment/la-et-bigpicture9-2010mar09

    By Patrick Goldstein
    “The Big Picture” Column

    . . . Virtually every survey has shown that younger audiences have zero interest in critics. They take their cues for what movies to see from their peers, making decisions based on the buzz they’ve heard on Facebook, Twitter or some other form of social networking.

    . . .

  • Bob Henry (wine marketer)


    Excerpt from the Los Angeles Times “Main News” Section
    (July 18, 2015, Page A6):

    “Clinton Faces a Steep Digital Hill;
    A supporter email list from 2008 was mostly obsolete,
    forcing her new team to hustle to rebuild one.”

    Link: http://www.latimes.com/nation/politics/la-na-hillary-clinton-digital-20150715-story.html

    By Michael A. Memoli
    Staff Reporter

    Hillary Rodham Clinton wound down her political operation in 2008 with 2.5 million email addresses in her campaign database. Seven years later, when campaign officials turned on the lights in April, they were stunned to find fewer than 100,000 still worked.

    Campaign aides learned the bad news in much the same way a reunion organizer trying to reconnect with old friends might, albeit on a much larger scale: an inbox clogged with bounce-back messages on the day Clinton announced her campaign and sent messages to supporters.

    The huge attrition of valuable data is not unique to Clinton — A TYPICAL EMAIL LIST WILL LOSE 1 IN 5 SUBSCRIBERS EACH YEAR, said Jordan Cohen, chief marketing officer for Fluent, which specializes in email list acquisition. . . .

  • Bob Henry (wine marketer)


    Adding to the debate, a blog “thought piece” worth reading:

    “What you say in advertising is more important than how you say it, unless…”

    http://www.coloradowinepress.com/2014/11/what-you-say-in-advertising-is-more.html#more

  • Tom Natan


    As an online wine retailer, I can say that translating my guided tasting or even casual conversation skills about wine to the internet has been the toughest thing. Very little can replace the feedback of visual cues and tone of voice.

    • 1WineDude


      firstvine – video, baby! :)

      • Bob Henry (wine marketer)


        With apologies to The Buggles:

        “Video killed the radio [um, make that ‘retail’] star . . .”

      • firstvine


        Yes indeed! Time to brush up my ancient media training.

        • 1WineDude


          firstvine – you might find it in some old Norse mythology books…

  • Kyle Schlachter


    Geez Bob, it looks like I paid you to promote my blog… (what’s your paypal ID?)

    • Bob Henry (wine marketer)


      Kyle,

      What can I say?

      Wednesdays and Thursdays are my workweek “weekend.” I can stay up past my bedtime and reconnoiter the wine blogs.

      I thought it was about time I “trolled” your writings.

      Bob

    • Bob Henry (wine marketer)


      Kyle,

      I would prefer payola Bitcoins.

      Bob

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