The parallel trend is the growth of local delivery services like Drizzly, which work with local stores.

It’s clear that DTC delivery opens a key growth channel for wineries, but variety, convenience, expertise and trial will still be key advantages for wine stores. They’ll need to explore new ways of serving their customers, but they’ll come out just fine.

Maybe they should focus on Millennials more. I just saw a statistic that people ages 21 to 38 drink 42 percent of the wine sold. Nevertheless, I think the stores must embrace this as an omnichannel challenge. I do both — buy online and in-store — depending on a number of circumstances. Wine merchants like Total Wine are employing new digital video technology to educate consumers while in-store. Also, wine tastings cannot be repeated online. Wine retailers need to figure out better ways to boost basket size when they get shoppers into the store in addition to doing what all brick-and-mortar retailers need to do today: Make the in-store experience unique and compelling.

How about waking up to the idea that choosing a wine for most people is WORK? When your wine store looks like the Foot Locker wall full of shoes, the wealth of choice works against you.

Great retail makes the complex choice easy. That’s why people turn to apps like Delectable, but that’s also why great wine stores employ people with a well-rounded skill set.

They don’t hire just those souls who know 85 virgins crushed the grapes with their feet under the Harvest Moon while listening to Jimmy Buffet, they hire people with the soft skills to engage strangers before launching into their stories.

All retailers could take a big gulp of that advice.

The answer is curation! Most people know just enough to get by, or are totally intimidated by wine stores. But even people who are not wine snobs love a good story, and local wine stores need to do a lot more to make wine accessible to the easily intimidated. Not by little tags on the shelves, but through stories. Digital can easily play a role here, connecting online content to the bottle on the shelf, as long as it can be delivered in a non-kludgy format (i.e., whatever scanning or signaling technology you use, it has to work instantly). Education, a point of view, a story to match — all delivered in a friendly way at the shelf. And if the wine seller emphasizes these things, the ratings and reviews might actually become less important. People who are intimidated by wine are probably not going to be able to taste the difference between a $20 bottle and a $40 or $60 bottle. What they need to make that leap to the more expensive bottle is a… Read more »

Wine stores should respond by creating experiences for customers. Tastings, lectures, food pairings and more should all be conducted at stores. Use the stores as social settings for customers to meet each other and share conversation while tasting wines. And these should be for more than just high-end wines. By making wine buying fun, social and interesting retailers can deliver a better experience than the wineries, and customers don’t have to travel to the wineries to get it.

My first thought is that they may be the latest casualty of the New Age of Retailing.

The situation with books is much different. First there is the whole issue of a lower unit cost. Then there is the ability to resell used product. Then there is the issue of assortment, i.e., no physical store could hold as many books as Amazon offers, but physical stores could easily hold sufficient inventories from a dozen or so small vineyards.

There is also a difference between somebody who prides themselves on being able to get a good deal on the new Stephen King novel and somebody looking for that perfect nouvelle beaujolais. If the vineyard “owns” the loyalty the wine store can’t compete.

So … this may be time for wine store operators to determine the actual size of the opportunity and decide if a co-opetition model is possible, how to build their own “community” or just adjust to new market realities.

While wine store merchants cannot duplicate the relationship with owners of wineries, they could leverage their knowledge and expertise about many wineries with their consumers. If the wine store owners cannot leverage their knowledge and expertise in a way the creates enough value to cover the price markup and profit, then they will go out of business. Book stores have had to find a way to provide value for their customers to stay in business. Wine store owners will have to do the same.

Cataloging the story behind each wine and providing a method to deliver that story in a meaningful manner to the shopper is imperative. Asking someone “what wine should I buy?” is like someone asking a librarian “what book should I read?” when walking into the central library. Perhaps wine stores should develop a Dewey decimal system for wine so shoppers can find a bottle in the fancy warehouse. Add the capability for customers to share their reviews and you’d provide a valued service to your shoppers.

While we all accept the fact that direct sales and e-commerce sales erode every brick-and-mortar retailer’s total sales, there are attributes that differentiate independent wine shops from big-box wine chains and from wineries selling directly to consumers. Independents continue to offer a homey, trustworthy destination to which the neighborhood consumer can go for a Saturday morning tasting, for one-on-one advice, possibly for a better or rare wine and for that last-minute bottle or two for dinner guests. These characteristics preclude serious competition from direct selling by wineries. The larger wine store chains offer a different model. They offer a varied assortment at a glance, and have some wines bottled for them by the wineries of their choice (a private label, if you will). They can concentrate on hiring, training and retaining knowledgeable store associates to discuss options with their customers about category, quality and price. Sometime client of ours Total Wine & More, for one, has also been strengthening its website presence so that it not only can ship direct where allowed, but educates the… Read more »

Sadly, too many wine stores hire “beer” salespeople. My latest experiences include getting wine advice from a kid wearing a t-shirt and backwards-facing baseball cap, ordering a specific case and watching the sales clerk writing it down on a scrap of paper (no process!). Of course I was never informed that it arrived … or didn’t.

Want to thrive in the retail wine industry? Stop complaining about new channels or competition and hire a business coach to improve the user experience.

And here is another view. This from our daughter, who just happens to represent a number of distributors for off-shore wineries in the U.S. This is only going to hold true for U.S.-based wineries. Consumers looking to buy a wine from any other region will have to go to a retailer or use an online source — but it will not be direct from the winery. For that reason, it is not categorical that wine retailers are in jeopardy of losing a significant percentage of sales. Also, some consumers are loyal on both ends. They may come into their reliable retail store and request a case of wine from their new favorite winery they just visited. There is so much wine in the market and so many wineries now in the U.S., not all of them have a large enough production to have a distributor for the general U.S. market, and buying wine directly from the winery is the only option for the consumer at this time. What is interesting is that it is not necessarily… Read more »

Wine stores should respond to the DTC threat by offering online ordering and delivery themselves. For lazy or time-pressed consumers brave enough to venture outside their caves, wine stores should offer sampling events to attract new customers and maintain the loyalty of current customers.

D2C is a growing channel for virtually all food categories, including wine. There must be a compelling reason for shoppers to go to retail outlets. Typically, and especially for wine, differentiation comes in the form of knowledgeable store/winery staff. More targeted promotional pricing can be leveraged by retailers, however, I am seeing more and more wineries offering deep discounts, too. So there is no easy solution for retailers to maintain share, however, matching the attraction of D2C producers is a great start.

Huge disruptor. I’m not sure if a traditional brick and mortar can complete unless it is on service, knowledge or niche. If you know what you are shopping for and have someone to provide an adult signature at delivery, it makes the value prop undeniable.

That said, until the drone can drop it off on Friday night on your way home from work, convenience commands a premium.

Interesting stat on the price point — $38 is about the same as some craft beer12 packs.

Wine stores should play to their strengths while attempting to mitigate the perceived advantages of wineries. Wine stores should leverage the asset of their stores to offer enhanced experiences for shoppers. They should also leverage the proximity of their stores to enable fast and low-cost delivery to shoppers’ homes. They should leverage their broader assortment to introduce shoppers to other wines that should be of interest to shoppers from different wineries and regions based upon their past purchases. And finally they should reward shoppers for their loyalty, perhaps with free samples of different wines that shoppers may like so that shoppers have a low-cost way of sampling new wines. To overcome the perceived advantages of wineries, wine stores should build deep and close relationships with wineries to ensure they are as knowledgeable as possible about each of the wines from each winery. Wine stores could also feature smaller wineries in their stores at various points in time in order to overcome shoppers’ desires to support smaller wineries by purchasing directly from the winery. They should… Read more »

How they SHOULD respond, I don’t know, but how they WILL respond I can almost guarantee: they will lobby their state legislatures and Congress to limit DTC sales. Alcohol is in a different world regulation wise, and emotional pleas that (additional) regulation(s) will “save lives” (or something similar) still resonate, however disingenuous they may be.

This challenge is similar to the book channel in the sheer number of different wines out there, and the difficulty the ordinary consumer has in figuring out what they will like. The differences are that consumers can determine what books they prefer by reading a sample and unfortunately, samples of wine are hard to come by!

If wine stores are not going to stock thousands of different labels, they must engage consumers via content — providing materials, seminars and tastings to add value. Doing all that while keeping it simple — that will be the real challenge.

Offhand, the big box wine retailers (e.g. Total Wine) and stiff online competition suggest the local liquor store is going to face some hard times….

Wine stores need to bring people into the store for more reasons than just wine. Perhaps food preparation shows, lessons on wine/food paring, community events for wine lovers, etc.

If I am a regular wine consumer, and I know what I like, I’m going to get it online. You’ll need to convince this customer to come into the store to experience all aspects of wine and the culture behind it.

I’m sure Barnes & Noble or even Walmart would read this piece and say, “welcome to the club!” Here’s a quote from Klaus Schwab, who just published a great book called “The Fourth Industrial Revolution”:

“The question for all industries and companies, without exception, is no longer ‘Am I going to be disrupted?’ but ‘When is disruption coming, what form will it take and how will it affect us?'”

Welcome to the Third Wave of physical US retail, where quality will matter more than commodity — because if you’re just selling commodity, it’s online and cheaper. So, if you’re a wine seller, you should be thinking about better … better employees, better stores, better displays, better reviews, better product, better everything. Create an experience vs a warehouse. Because the closer you are to a warehouse, the closer you are to getting wiped out by a better one: the internet.

Wine stores that present an appealing experience will be able to counteract this trend. They have the benefit of being able to fulfill instant gratification and cut out shipping costs. Have tastings and other events to get wine lovers in-store. Have knowledgeable employees that can help shoppers narrow down options quickly. This news doesn’t have to doom wine stores, in fact it should be a call to action to improve offerings.

The well-informed wine consumer can solely rely on the DTC path to purchase because they know what varietals and labels they like and they know the price they should pay. On the other hand, the brick-and-mortar wine store holds much more appeal to the rest of us. With a wide selection, varying price points and knowledgeable sales people buying wine from a physical location is much more user-friendly.

To combat the DTC competition, wine stores must embrace these advantages and market them to the general public. If they do this well, the collective fate of wine stores across the nation is safe.

Just a thought. Our customers love the local wines from our county, and we have 25% of our wine sales from our area, so for me it is simple. Promote the local wineries, and also look for the Italian, and Napa Valley wines when the are posted on deal, and pass the savings on to the customer, which could save them 25%.

The other deal in Ohio is, we can offer 10% off on cases of wine, which is a nice incentive as well. I have looked online at many of these sites, and the wine is not cheap at all, so I feel we have an advantage on cost, for sure.

Commenting late, but today is #nationaldrinkwineday so what the heck.

Judging from the volume of comments on this one, a lot of panelists must be wine aficionados like me. These days I buy almost all of my wine from a couple of email based retailers, Garagiste and Full Pull. Why? Like Nikki Baird said it’s all about curation and storytelling. These retailers offer a handpicked assortment and they tell me the story behind each wine. Compare that to the typical wine store that is just racks of bottles.

Wine stores have so much opportunity to up their game in response to changing consumption patterns and delivery models. Use visual merchandising strategies to demystify wine: provide rich, engaging information like food pairing suggestions, the winemakers approach etc. Build a community around your store through events and social media. A really bold approach would be to partner with wineries and become a pickup point for their wine clubs: the wineries would see lower shipping costs and the retailer would benefit from additional traffic and impulse, add-on purchases.