Groupon says its focus is on the bottom line, rather than top-line growth.
The e-retailer’s new marketplace sells more than 1,000 U.S. wines.
Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide, now sells wine. Amazon Wine features more than 1,000 U.S. wines with detailed information from their makers about production, tasting and food pairing recommendations, the e-retailer says.
“We heard from our customers they wanted to buy wine online, so we created a new marketplace where they can explore great wines and have them delivered right to their doorsteps,” an Amazon spokeswoman says.
The wines come from wineries of all sizes, Amazon says, including small, family-owned locations and large-scale vintners with hundreds of acres of grapes. Some of its partners are the Roadhouse Winery, Flora Springs Winery, Torri Mor Winery, Hall Wines, Pepper Bridge Winery, J. Bookwalter Winery, Mark Ryan Winery and Francis Ford Coppola Winery.
“We have no idea how sales will go but we are optimistic about reaching a large group of people through Amazon’s extensive customer lists, without having to discount as with most other online retailers,” says Eric McKibben, a partner at Pepper Bridge Winery and Amavi Cellars. He says Amazon approached the vineyard to be part of a beta test of the online wine store because some of its executives knew Pepper Bridge wines.
Pepper Bridge, whose wines typically sell for $50 a bottle or more, has a limited shopping cart on its web site but has mainly used the web for marketing purposes thus far, he says. “Selling wine at our price point online is a difficult proposition but I am hopeful to expand it,” he says. “I don’t foresee it ever becoming a huge part of our sales but it has steadily grown—albeit slowly.”
Smaller wineries without tasting rooms benefit from being able to share details about their products with new customers online, Amazon says. For others, joining Amazon is another sales channel in which to grow.
“It’s really an extension of our e-commerce business that we already have intact,” says a spokeswoman for Francis Ford Coppola Winery, which already sells online at its own site, FrancisCoppolaWinery.com/store.
“We’re partnering with them to reach all of their customers and users,” she says. “It’s really just a move to increase sales, visibility and product awareness. The plus side as well is that the launch is right before the holidays.”
Wine is the perfect product for the home delivery market, says Paul Weitzel, managing partner at food retail consultancy Willard Bishop. It has a stable shelf life and a high price point relative to its size, he says, which means retailers stand to make more money shipping wine than some other comparably sized goods.
Moreover, Amazon’s enormousness might enable the e-retailer eventually to sell wine at lower prices than its competitors, Weitzel adds. “I think with their volume and who they are, if it does take off, my guess is you’ll be able to find bottles of wine at a price less than retail, and that includes a shipping charge,” he says.
Amazon Wine shoppers can filter their wine search results by such factors as the percentage of alcohol by volume, taste notes, year, winery location, professional rating and grape variety. In addition to notes from the winemakers, the product pages also contain variety, geography, composition and alcohol percentage information for each bottle.
“Whether it’s helping customers find a favorite varietal, shop for holiday pairings or expand their cellar with a special hand-crafted bottle, we’re excited to provide the right tools and information needed to guide them to the perfect wine,” says Peter Faricy, vice president, Amazon Marketplace.
Customers aged 21 or older may order up to six bottles for a flat shipping rate of $9.99, Amazon says. For now, Amazon Wine ships to California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia, with more states to come, Amazon says.