Return to “normal” box

Covid has allowed online wine sales to cross a threshold and establish itself as an essential channel in France, surpassing 10% market share. After two years of euphoria, the year 2022 marks the beginning of a new cycle, the return to a certain normality.
Where are we today and what is the future of e-commerce for wine and spirits?

the end of euphoria

Wine e-commerce has been one of the beneficiaries of the Covid sequence. In 2020, all established sites have seen strong growth (the best have doubled in size). In 2021, growth continued, more modest, but still in double digits. A threshold has therefore been crossed.
Today, the context has changed profoundly. Online sales are down (the trend is around -20% compared to 2021). Costs are rising, with inflation of course, but also because of the small 2021 crop and strong export demand, which put pressure on supply. Finally, the easy money period is over (for fundraising, external growth or customer acquisition). The priority is no longer growth, but profitability. It’s a return to a normal world, and that’s after two years of euphoria.

Retention and internationalization, strategic priorities in 2022

Faced with this new situation, online wine sellers have adapted. Its two strategic priorities in 2022 are retention and internationalization. Retention of customers acquired since 2020 in France, instead of acquiring (expensive) new customers. To this end, they seek to develop more targeted offers, thanks to segmentation and personalization. And for growth, they are looking to international markets, where their range of French wines and their quality of service are real assets. They are opening up new countries and accelerating where they are already present. Some players, who already earn more than a third of their revenue from exports, have shown the way; the development potential is significant!
The two major operations of September 2022 – the acquisition of the French leader Vinatis by the Castel group and the raising of 4 million euros for the Les Grappes website (see below) – are also part of this dynamic. In both cases, international development appears as a priority strategic objective.

In addition to online sales, it is the direct relationship with the consumer that is at stake.

Wine e-commerce is therefore an established channel whose competitive landscape is becoming more structured. What will be the next steps? What are the real problems?
As for e-retailers, this return to normalcy requires them to pick their battles and find the right model (very broad or select offer? buy/resell and/or marketplace? Direct producer offer? B2C and/or B2B ?) associated services more relevant (subscription, express delivery, training, wine tourism, application of label recognition or winery management, personal shopper, VIP club, group shopping, etc.).

But on the side of the major players in wines and spirits, the real issue goes beyond e-commerce: it is the direct relationship with the consumer that is at stake, as this channel allows, in addition to sales, to bring content and image, that will influence the consumer’s decision, both online and in-store. Online also allows you to have information about consumers, get to know them better… and talk to them. Online sales are, therefore, a fundamental tool in the relationship with the consumer, which is at the heart of their strategies. Therefore, they seek to penetrate the channel, through acquisitions, partnerships or distribution agreements, and recruit substantial teams of young talent to work on the topic. They’re still in test and learn mode, they’re trying to figure it out, but they’ve all seen that L’Oréal makes almost a third of its sales online and that Nike saved its year 2021 thanks to its 40% direct sales. They know that your future customers are online customers and that you need to know how to reach them directly.

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