The Online Wine Industry

Abhiroop GandhiSudhir Gopal

Maximiliano Hernandez-TosoRaghu Kakumanu

Eungsang Kim

The Value Chain and EC

1st TierDomestic Wineries and importers that either produce or represent the producer

2nd TierWholesalers purchase wines from domestic wineries and importers

3rd TierRetailers, restaurants`

E-commerce could be used at different points in the in the industry value chain. We will focus in B2C possibilities

ConsumerVine

B2B

B2B

B2B

B2C

Regulation Authorities

B2G

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

A Sample Winery

A Sample Winery (2)

A Sample Winery (3)

A Sample Signup Page

A Sample Signup Page (2)

Major Online Wine Sellers Awinestore.com Wine.com Gourmet Market K&L Wines Internet Wines Palmer Vineyards Wines.com Virtual Vineyards WineShopper.com

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

Who are the customers? Consumers

Individual Consumption Gifts

Corporations (corporate gifts) Retailers Restaurants

How do they attract customers? Group affiliation Word of mouth Media advertising Direct mail Referrals

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

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.

Conclusion

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