How retailers can capitalise on the online wine sales opportunity
Online wine sales are reportedly growing steadily across Europe, and the UK is leading the way with eCommerce currently accounting for 10% of total off-trade wine sales. This growing interest from consumers in purchasing alcohol online reflects the wider retail climate, which has seen internet sales increase from 5.8% to 20% of total retail sales in the UK in the last 10 years.
Despite this, it was still somewhat surprising when Majestic Wine announced that it would be closing some of its stores, rebranding as Naked Wine, and concentrating on its online business. However, with almost half of the Majestic Wine group’s sales apparently already coming from online, it’s clear that CEO Rowan Gormley has spotted a potentially very lucrative opportunity to capitalise on this growing market, while minimising costs elsewhere by offloading its bricks and mortar stores.
While it remains to be seen if this gamble pays off for Majestic in the long run, it’s almost certain that online wine sales will continue to become increasingly valuable. Retailers that respond to consumers’ changing expectations stand to benefit greatly from this in the coming years. But, in an increasingly competitive market, a transactional website doesn’t automatically guarantee success. So, what do wine retailers need to consider in order to attract and retain customers when selling online?
Direct to consumer
Page load speed is increasingly becoming a priority for users, particularly with the rise of mobile commerce. In fact, research by Google in 2018 revealed that 53% of visits are abandoned if a mobile site takes longer than three seconds to load.
Even if visitors don’t immediately abandon a site, it can have a significant effect on future sales. Customer engagement technology firm, Kissmetrics, found that 79% of customers who are “dissatisfied” with a website’s performance are less likely to buy from that site again.
One of the main issues encountered by many eCommerce stores is the conversion rate at the checkout stage; it’s thought that, on average, around 70% of customers abandon their shopping cart during the checkout process. According to research by Barclaycard, this could be resulting in more than £18 billion of lost sales each year in the UK.
A common cause of shopping cart abandonment is an overly long and complicated checkout process. Reducing the number of form fields required for checkout and payment, and removing any fields that aren’t absolutely necessary for customers to complete their purchases should help to boost conversions. It also helps to set realistic expectations and reduce frustrations by showing customers the progress of their checkout with a progress indicator.
For smaller, lesser-known businesses, one of the biggest eCommerce challenges is how to build customer trust in their websites. If a user has any doubts over the authenticity or reliability of a site, then they may choose to shop with a competitor that they are already more familiar with instead.
Social proof plays a big role in creating trust, as customers feel more at ease if they know that their peers have had a positive experience purchasing products from a particular eCommerce store. Social proof can include social media followers, product reviews, and news articles that mention the company. These are all forms of validation that legitimise a business in the eyes of consumers.
What about wholesale?
Consumers’ expectations are not only changing when they’re shopping for themselves, research has shown that 93% of business-to-business companies now prefer to purchase products online. This shows a very clear trend: once a fringe B2B sales channel, ecommerce is very quickly evolving into the buying method of choice for B2B customers. This means that wine wholesalers should also be paying close attention to the growth of online wine sales, as this presents an excellent opportunity for them too.
When shopping online, B2B buyers are beginning to demand a similarly simple and smooth purchasing experience as they expect from B2C retailers. However, there are a few additional considerations when catering for business buyers. It’s important to choose an ecommerce platform that provides the appropriate B2B features, enabling wholesalers to efficiently manage quote requests, negotiate pricing, create custom catalogues and personalised price lists, and offer frictionless re-ordering for common purchases, for example.
Ultimately, one thing is undeniable: buyers today, whether they’re consumers or business procurers, demand online shopping experiences that are smooth and tailored to their needs. If your business isn’t providing that right now, it’s time to get started or else risk losing customers as the online wine sales market continues to increase in value.
Sam Rutley, managing director at PushON