Inspired by Amazon, wine.com is the largest online only wine retailer in the US and one of the most influential digital wine platforms in the world. As such, it represents a critical discovery channel for Italian wines in America.
In a recent edition of the Italian Wine Podcast (Episode 2543), Juliana Colangelo, co-host of Masterclass US Wine Market, sat down with Tim Marson MW, Category Director for Italy at wine.com, to discuss current trends in the US wine market and how Italian wine producers are succeeding in the online retail space.
Adopting the Amazon approach
The online wine retailer wine.com has a wide selection of Italian wines, with 2,500 different Italian wines and has sold over 7,000 distinct Italian SKUs in the last year. The retailer stocks familiar household names as well as more interesting and esoteric bottles. “We adopted the Amazon approach – build it and they will come”, explains Tim Marson, Category Director at wine.com. The company’s business model is built around being able to present wines that people don’t normally see on their store shelves and shipping them within a day or two. Functionality is crucial, and like Amazon, they have to be able to help customers to find exactly what they are looking for through effective navigation and filtering.
Classic Reds Dominate the Market
While the platform stocks a huge variety of Italian wines, it is still the traditional heavy hitters of Tuscany and Piedmont that dominate, representing around two-thirds of Italian wine revenue, with growing interest in lesser known regions like Campania, Abruzzo and Puglia. Unsurprisingly, Sangiovese and Nebbiolo-based wines comprise around one-third of wine.com’s Italian wine sales, with red wines overall accounting for 70% of wine.com’s sales on the platform.
Commercially significant categories like Prosecco and Pinot Grigio perform less well on the online retail space, a business model which favours super premium and luxury brands.
While Italy is performing better than many other major categories at the moment, it lags behind France in terms of both volume and value, thanks to the persistently strong performance of Bordeaux, Burgundy and Champagne.
A Premium Pricing Ecosystem
The average selling price for a bottle of wine on wine.com is $35, with 36% of Italian wine sales in the over $50 bracket. Fifteen per cent of Italian wine sales are for $100+ bottles. With operational and shipping costs to contend with, selling wines for less than $20 a bottle doesn’t make sense for an online retailer like wine.com and, while people are prepared to wait a day or two for a Barolo or Brunello, Prosecco and Pinot Grigio tend to sell better at the local grocery store where they can be picked up for immediate consumption.
Italian Wine Overdelivers on Value
Italy’s reputation for good value is one of the key reasons why it continues to perform well in the US wine market. While overdelivering at the price point ensures repeat custom and brand loyalty, price rises in places like Burgundy and Napa Valley have driven customers towards highly-rated Italian alternatives like Barolo or Brunello instead.
With a highly diverse offering, the Italian brand, in general, occupies an enviable position. Italian wine has, according to Tim Marson, something for everyone, “it’s accessible, affordable and aspirational”, characteristics that ensure that it will continue to thrive in the online retail space.
Although there is no sense of complacency and Italian producers continue to innovate, the consistent quality of Italian wine, even in the face of climate change, drives consumer loyalty.
Professional ratings are another key volume driving feature in the online retail space and, as Tim Marson explains, American critics love Italian wines.
Online sommeliers to guide consumers
A key wine.com feature that Tim was particularly keen to share was the live chat function with a real sommelier to help customers find the wine they are looking for. Intrigued, the Italian Wine Podcast launched the chat function and asked for some help finding something fresh and Italian, like a Lambrusco, with a $30 budget. Within a few minutes, Jenny, our online sommelier, had produced a shortlist that included Fattoria Moretto Grasparossa di Castelvetro Secco, a Venturini Baldini Marchese Manodori and a Bisol Jeio Prosecco Brut. All good options that came within budget and with a few personalised tasting notes – thanks Jenny!
As you would expect from a major online retailer, wine.com also conducts regular email promotions with a wine/region/winery focus, with a recent drop focussing on volcanic wines of Italy.
Engaging younger consumers
Younger consumers represent 27% of wine.com’s customers and they are active, engaged and willing to spend. They are drinking a wide range of styles and at diverse price points, and associate Italy with food and food & wine culture, rather than seeing wine as simply a beverage. In particular, they appreciate the connection with the Italian lifestyle and spending time with a bottle of wine over a meal with other people. wine.com has also invested in social media influencers. While it is difficult to assess ROI, such investment is helping to engage a younger audience.
Understanding the American Wine Market with the Italian Wine Podcast
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Tune in for the full conversation with Tim Marson MW of wine.com:
Ep. 2543 Inside Wine.com with Tim Marson MW: Italian Wine Category | Masterclass US Wine Market
