Good Grape Wine Company

July 23 2007

The Pending Collision in the Online Wine Commerce Space

On the heels of reports coming from The Wine Industry Technology Symposium last week and tasty quotes from Gary Vaynerchuk of Wine Library TV like, “Ninety-nine percent of the people in the wine business are really blowing it” and “Now everyone has got an opinion.  Every single person you cross paths with in this industry you need to fear, and you need to embrace,” I’ve been re-thinking how I mentally get my arms around the various sub-segments of wine communities on the Internet. 

Excuse me for a post while I talk this one out, out loud, “Deal or No Deal” game show style and let me also say upfront that I now think Wine.com is in an incredibly strong position in the consumer direct online wine space, I just didn’t “get” that position and how it can evolve as their customer needs evolve.

Some context:  Tom from Fermentation and his survey on influence in the blogosphere is starting to make me sway in opinion—particularly the part where 68.4% of respondents said they have purchased a wine after seeing it reviewed on a wine blog.  I think Tom’s survey shows, without question, that there is some definite credence being given to blog wine reviews, a position I haven’t always held.

So, whereas, I’ve always viewed the wine blogosphere and wine reviews as an influencer mechanism similar to a traditional wine magazine (you read something you make mental note, maybe you recall the information in a buying situation), I’m now starting to see the vision for it as a buying mechanism (you see something, you agree, you buy).  This is “Citizen Journalism” moving to more “Citizen Buying Sentinel.”

In early June I wrote a post as a follow-on to the Wine 2.0 event that took place in San Francisco and I took Wine.com mildly to task for being the #1 Wine site on the Internet, but not demonstrating any Web 2.0 technologies—a blog, RSS feeds, collaboration, etc.

At that moment, I viewed it as not providing enough social content around the buying situation (influencing).

Imagine my surprise when the CEO, Rich Bergsund, left a comment on the site, alongside another Wine.com colleague, who pointed out that Wine.com extensively uses RSS feeds.

Rich said in part:

We’re passionate about wine too, and also passionate about learning what our customers want and working hard every day to give it to them.
I think all the community stuff you guys are talking about is great.  Wine is social and the web is going social, so wine on the web is a natural to be social.
For the Internet to really have an impact on wine, don’t forget all the other pieces customers care about.  Reliable and convenient access to all the great wines the community is talking about.  Low cost, fast delivery.  Customer service.

What Rich didn’t really lay out, (but is a key point) is the fact that online socializing and online selling are two vastly different things, which makes Wine Library TV’s acquisition of Cork’d all the more intriguing and prescient.  And the other point that Rich didn’t elaborate on is the fact that despite Wine.com being the #1 online wine commerce shop, there’s a strong likelihood that his customers aren’t completely ready for blogs and the capabilities afforded by Web 2.0 technologies.  There’s a product lifecycle curve in everything.

So, here’s where my opinion is evolving.  I’ve spent additional time researching Wine.com--spent a good amount of time poking around their site, I have reviewed their affiliate program in addition to being tipped off to their Windows Live “Just In” widget that lives on your desktop. 

Wine.com is on the cutting edge in many areas.  However, it’s not noticeable to the wine blogosphere because Wine.com is focused on selling wine—all of their cool technology has to do with selling and servicing customers, a fact originally lost on me when looking at it through the filter of the Wine blogosphere and community.

You have a couple of different mechanisms in play here:  wine blog wine reviews, wine-tasting note community sites, and online wine commerce with an exceptional customer experience (Wine.com)

What I ultimately think is shaping up here is competition in the consumer online wine arena between two worthy competitors—Wine.com and Wine Library, but their growth structure right now is coming from two different points of view that ultimately will coalesce.

Wine.com is coming at it from a less technology-savvy consumer point of view, those mostly interested in buying wines like traditional retail.  They are #1 in size.  Eventually their consumers will want more community-oriented aspects at which point they can build out the community engagement models, building on their buying and selling expertise and customer service experience.  This is a different audience that will evolve to become more Web/Wine 2.0 centric in the near future.

Wine Library is coming at it from the complete other end—the Web 2.0 perspective—blogging and social networking, with the acquisition of Cork’d, as a tool to drive community engagement and commerce, creating customer ambassadors.  Wine Library TV, anecdotally, is growing its ecommerce wine business significantly.  These are the early adopters, and more and more consumers will join their ranks in the near future.

Two different models, coming from two different perspectives, and in 18 months time, they will be head to head competitors, with their two different looking customers essentially becoming one and the same.  I wonder if Wine.com is readying technology ahead of the curve in anticipation of their customers growing needs and I wonder if Gary Vaynerchuk is ready for his close-up with an audience that is likely to grow 10 X in the next year.

This will be fun to watch play out. 

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