The Online Wine Industry

1
The Online Wine Industry

• Abhiroop Gandhi
• Sudhir Gopal
• Maximiliano Hernandez-Toso
• Raghu Kakumanu
• Eungsang Kim

2
The Value Chain and EC
B2C
B2B
B2B
B2B
1st Tier Domestic Wineries and importers that
either produce or represent the producer
2nd Tier Wholesalers purchase wines from domestic
wineries and importers
3rd Tier Retailers, restaurants
Consumer
Vine
B2G
Regulation Authorities
E-commerce could be used at different points in
the in the industry value chain. We will focus in
B2C possibilities
3
Buying wine online

• Consumers sign up and enter their orders online
  with a winery
• Purchase process
• log in
• browse by wine category
• select a basket of products
• arrange for delivery
• pay using a credit card

4
A Sample Winery
5
A Sample Winery (2)
6
A Sample Winery (3)
7
A Sample Signup Page
8
A Sample Signup Page (2)
9
Major Online Wine Sellers

• Awinestore.com
• Wine.com
• Gourmet Market
• KL Wines
• Internet Wines
• Palmer Vineyards
• Wines.com
• Virtual Vineyards
• WineShopper.com

10
Value Proposition

• Many items to choose from
• Most orders shipped very quickly
• Tracking numbers emailed back to you
• Elegant shipping and packaging
• Very competitive price
• Product customization (you can design your own
  labels)
• Offer advice on selecting the appropriate wines
  for and occasion

11
Who are the customers?

• Consumers
• Individual Consumption
• Gifts
• Corporations (corporate gifts)
• Retailers
• Restaurants

12
How do they attract customers?

• Group affiliation
• Word of mouth
• Media advertising
• Direct mail
• Referrals

13
Turning one-shot customers into repeat customers

• Firms rely on excellent customer service to bring
  people back
• Maintain an excellent product portfolio
• Build brand image and credibility
• Provide newsletters and updates on special offers
  by email
• Encourage membership and clubs

14
Policy Issues and Barriers to Entry

• Because alcohol is a state-regulated product
  rather than a federally regulated one, there are
  basically 50 different sets of laws. The only
  common law among the states is that wine or any
  alcohol must travel via the three-tier
  distribution system from producer to wholesaler
  to retailer before it reaches the consumer.
• Impending legislation may help strengthen the
  market for internet wine sales.

15
(No Transcript)
16
Conclusion

• Legislation is the major barrier for the
  emergence of the Amazon.Com of wine