The Grapevine

Is Amazon A Threat to Your Wine Shop?

May 29th, 2013

As we’ve noted in a number of recent posts, including Monday’s Industry News article, Amazon continues to grow its retail wine business. They’ve added variety and offer flat rate shipping as well as discounts on as few as 3 bottles. So, are they a threat to your local business?

Maybe, but only if you let it. [level-members]

The thing with Amazon is, they’re really good at what they do. Great, in fact. But what they do is built on efficiency counted to the last fraction of a cent and millisecond of engagement. What they can’t deliver – at any price – is the retail experience.

Amazon understands that. In fact, it’s the poor retail experience so familiar to many shoppers that Amazon banks on not delivering. You know, the poorly organized showroom staffed by know-nothing clerks.

But as Luxury Daily notes in this recent article about the high-end fashion business, even though Amazon has been increasing its efforts to serve affluent consumers, it doesn’t yet have the reputation to back up their efforts. Which isn’t to say that they won’t develop it and that luxury goods manufacturers and retails can ignore Amazon. But, as Michael Goldberg of Martini Media says, “Luxury brands do not need to fear Amazon.”

Neither do wine retailers, at least for the moment and provided they aren’t trying to out-Amazon Amazon. By which I mean, don’t compete on price selling commodity goods. 

Goldberg is also quoted as saying, “Selling luxury is not just about selling a product – it’s about selling an idea and a lifestyle.”

The same is true for independent wine shops. Amazon is only a threat (at least for the moment) if you try to compete in the commodity business. But then, you’d already be feeling it from the big box retailers and other competitors. (Depending on your state regulations.)