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Bus 800-102-14-su - class 1

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Sonoma State University - Wine eCommerce - Class #1 Presentation

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Bus 800-102-14-su - class 1

  1. 1. 1BUS-800-102-14-SU Wine eCommerce BUS-800-102-14-SU:Wine eCommerce Presented by: Ron Scharman May, 7. 2014 Session:1
  2. 2. 2BUS-800-102-14-SU Wine eCommerce 1 Where Are We Headed 2 Who Am I and Why Am I Here? 3 The Past, Present, and Future of Wine Commerce
  3. 3. 3BUS-800-102-14-SU Wine eCommerce Wine eCommerce vs Wine Commerce
  4. 4. 4BUS-800-102-14-SU Wine eCommerce Got Wine?
  5. 5. 5BUS-800-102-14-SU Wine eCommerce QUESTION FOR THE SEMESTER: How do we sell a 3-dimensional story in a 2-dimensional world?
  6. 6. 6BUS-800-102-14-SU Wine eCommerce THE TRUTH IS, ITS HARD. VERY HARD. It is hard to capture the essence of your brand online. This is everyone’s challenge. Visitors are exposed to a number of stimuli that help frame their experience at your winery. They breathe fresh warm air that blows across the valley floor as they enjoy expansive views, marvel at architectural details, and soak in the overall ambiance of your tasting room during their visit. All of these things help engage and interest them.
  7. 7. 7BUS-800-102-14-SU Wine eCommerce GROWTH STATS The consumer direct channel of the wine industry is the fastest growing and most profitable channel. Do you have all the tools necessary to be successful and ride the wave?
  8. 8. 8BUS-800-102-14-SU Wine eCommerce GROWTH STATS • 2013 U.S. wine shipments grew 3% to 375.2 million cases with an estimated retail value of $36.3BB. This represents 21 consecutive years of volume growth. • The U.S. has been the largest wine consuming nation in the world since 2010. • Direct to Consumer (DTC) shipments by US wineries grew at an impressive 7.5% in 2013, hitting a record $1.57 billion. Total volume was 3.47 million cases, up 9.3% over the prior year. • Direct-to-consumer shipments in March grew 20% over the same time last year and were up 10% over the past 12 months. The total value of March shipments hit $213 million. *Data from Wine Institute, Wines&Vines, & ShipCompliant
  9. 9. 9BUS-800-102-14-SU Wine eCommerce EFFECTS OF 2005 SUPREME COURT RULING Supreme Court decision on May 16, 2005 changed forever the wine landscape for the direct-to-consumer wine market.  The Court’s majority opinion stated, "If a state chooses to allow direct shipments of wine, it must do so on evenhanded terms."  The Court ruling: Regulate, But Do Not Discriminate  The States response: Regulate, Don’t Discriminate, But Do Complicate
  10. 10. 10BUS-800-102-14-SU Wine eCommerce EFFECTS OF 2005 SUPREME COURT RULING “There is tremendous change rolling through the industry right now - it is a sea of change, just beginning to be felt” -John Hinman Leading San Francisco Wine Industry Attorney “With the complexity of rapidly changing state regulations, it is essential that every wine producer, regardless of size, ensures they have an auditable, fully compliant shipping process. The industry needs service providers that can guarantee legal access, with a certified audit trail, for direct-to consumer fulfillment.“ -Steve Gross State Relations Manager, Wine Institute
  11. 11. 11BUS-800-102-14-SU Wine eCommerce OPPORTUNITY OF THE DIRECT TO CONSUMER MARKET • Granholm Supreme Court decision forever changed the wine landscape – Opened and complicated wine distribution – Set the stage for profit center focus on winery direct – Created the environment for mid and large sized wineries • Highlights the bottlenecks in current distribution and creates a split between two channels
  12. 12. 12BUS-800-102-14-SU Wine eCommerce OPPORTUNITY OF THE DIRECT TO CONSUMER MARKET Domestic / Intl Wine Producer Wholesalers Retailers / On Premise Consumers Direct to consumer 10% of sales ($3.2BB) Wholesaler distribution 90.0% of sales ($36BB)
  13. 13. 13BUS-800-102-14-SU Wine eCommerce WINE INSTITUTE LATEST UPDATE • 45 States out of 50 have some provision for winery direct shipping to consumers. • Importers and internet retailers are restricted to fewer states, depending on method of shipment and licenses held.
  14. 14. 14BUS-800-102-14-SU Wine eCommerce WHAT’S CHANGED? BIG COMPLEX SITES 2003 2014
  15. 15. 15BUS-800-102-14-SU Wine eCommerce THE WEB HAS BEEN GROWING FASTER THAN STORES…. 27% 25% 24% 20% 3% 2% 16% 15% 16% 17% 6% 5% 5% 3% 0% -3% 2% 4% 4% 4% -5% 0% 5% 10% 15% 20% 25% 30% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Annual growth rate 2004-2013* eCommerce versus retail spending Growth in e-commerce Growth in non-e-commerce retail *Source: U.S. Commerce Dept., Internet Retailer Note: All other retail sales excludes auto dealers, gasoline stations and fuel dealers, and restaurants and bars.
  16. 16. 16BUS-800-102-14-SU Wine eCommerce MORE PC’S GATHER DUST *Source: U.S. Commerce Dept., Internet Retailer 44% 11% 45% Percentage of time on retail web sites Smartphone Tablet PC
  17. 17. 17BUS-800-102-14-SU Wine eCommerce MOBILE COMMERCE SOARS Source: *IBM; **Adobe • Mobile devices accounted for 23% of online retail sales over 4-day 2013 Thanksgiving weekend*: • Tablets 16%, • Smartphones 7%. • Mobile commerce sales grew 80% on Cyber Monday over the same day last year.**
  18. 18. 18BUS-800-102-14-SU Wine eCommerce THINGS TO WATCH: MILLENNIALS  The crowd is here  Comfort level with mobile transactions  Ease of purchasing  Millennials  Growing FAST!
  19. 19. 19BUS-800-102-14-SU Wine eCommerce OMNI-CHANNEL RETAIL Today’s shoppers expect a single shopping cart that follows them on their customer journey THAT MEANS through multiple touchpoints – instore, online or on the move – so that customers have a seamless experience. Omni- Channel Retail Direct to Consumer Retailers Direct Sales Marketing Wine Club Events eCommerce
  20. 20. 20BUS-800-102-14-SU Wine eCommerce OMNI-CHANNEL RETAIL DISCOVERY • Search engine • Word of mouth • Advertisement • Social Media ENGAGEMENT • Visits website • Visits tasting room • Social Media • Mobile ACQUISITION • Purchases wine online • Buys wine in tasting room • Joins wine club LOYALTY/LOVE • Email communication • Facebook shares • Special events • Ratings
  21. 21. 21BUS-800-102-14-SU Wine eCommerce WINERY COMMERCE ECOSYSTEM Mobile Commerce Wine Apps SMS Text Commerce Anywhere Pop Up Virtual Commerce Social Commerce Facebook/Pinterest/Twitter Crowdsource POS Mobile POS Kiosk Tasting Room Wine Club Allocation/Mailing List Email
  22. 22. 22BUS-800-102-14-SU Wine eCommerce HOW IS WINE SOLD? Winery Retailer – 8,000+ wineries in North America Internet Retailer – Wine.com/Thousands of 17/20’s Discount Internet Retailer – WineAccess.com Marketplace – VintnersAlliance.com Community Member Site – WineCommune.com Flash Sale/Daily Deal Site – WinesTillSoldOut.com Affiliate Marketing Site – Bottlenotes.com Wine Auction Site – WineBid.com Direct to Trade Site – WineTradeDirect.com Growing Number of Wine Commerce Business Models
  23. 23. 23BUS-800-102-14-SU Wine eCommerce Questions? If you have a question please type it into the Questions box on your screen.
  24. 24. 24BUS-800-102-14-SU Wine eCommerce USING YOUR WEBSITE TO TELL YOUR STORY  Strong branding is key  Include rich content  Use the tools built into your website to improve your SEO  Gather data and market smart  Go Mobile!

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