Vender vino

I have not written much up to this date on digital sales. I considered that there was such a broad field on the promotion and generation of image through social media and online Marketing and that my recommendation was that wineries should focus on getting known and establishing conversations with its customers, its end users.

I had noticed that some important winery bloggers used a simple email address for the people who want to get in contact for placing orders.

But lately I have diverted my focus. And the debate I want to get in is whether a pure online store is better positioned or not, if compared with a physical store that has also an online store.

Having taken one path or another is in general conditioned by where one comes from. Having the necesary resources or a physical store from the start can make the path much easier. This will make it much easier to get profitable from an online store. Your clients who have already visited your physical store and have bought already anything online once, will probably take advantage of the ease of buying online again. The store can take advantage of its existing infrastructure. Thus the investment does not have to be huge. Also, a client may need just one visit to your physical store, and may have just bought once on one online store, not even on your own store. And he may feel confident enough to buy from your online store, because he finds it more comfortable or more effective, and because he already trusts you and your payment method. It is the customer’s decision which purchase method he decides to use.

One of the main problems for the online stores is how to differenciate themselves from other online stores, and how to provide a better service in order to be competitive not only on price. If the service is provided by a physical store, allows you more easily to get such a differentiation. If you, with a mixed model (physical and on-line) suceed in giving such good service on your digital version as a specialized on-line store you may wind up in the nice situation of being more competitive than a pure on-line store.

But, on the other hand one goes to conferences like this one done by  Bernardo Hernández, Google Global Manager of New Developments made in redinnova.com.. Bernard speaks at this conference about several sectors in which digital competitors have clearly beaten traditional competitors. This has happened in travel agencies, real estate, television, news producers, sectors. He thinks that maybe the next sectors in which this is going to happen again can be banking, education, yellow pages, telephone, car rental, and so one. He sumarizes saying that is not true that Internet means the end of intermediation as it was thought in the beginning, but the beginning of the re-intermediation. To add value is the key.

And to put more intricacies on the subject, here is this conference (in Spanish), of somebody extremely convincing also in redinnova.com. In the conference Guido Grinbaum does not wish to say that there is one system better than the other. Whether you are an online or a conventional company appears in the DNA of your company. But he also says that is not easy to change from one world to the other. And that mixed companies have trouble in being competitive in both worlds.

Who will win the upper hand in the wine sales?

Just in case, I recommend you get busy working no matter on what type your company is, because what is coming  is a tougher competition. The crisis will swallow those who don’t work hard enough, and endow success on those who maintain themselves competitive. 

Video courtesy of marketingdirecto.com

This post in Spanish: ¿Tiendas de vino exclusivamente digitales o tiendas mixtas?

I  am aware of Uvinum ’s growing success, but I have been wondering why they – with the increasing volume they are getting – have decided not to create their own store and then manage the product, the distribution and the logistics themselves. This could bring them higher margins and would allow them to build a powerful customer database for themselves . A database, that they with the current business model have to share with the digital stores that supply the products.

But then I realized the following:

1)      They don’t want to get into logistics. It adds complexity and is generally a much larger investment, which makes it difficult to increase the returns despite the higher margins.

2)      Uvinum’s revenues come from a small commission on sales, which may seem less ambitious, but when they tell you that they want to focus on the user experience and do what Amazon had done with other types of products, then you begin to understand. Few companies in the world of e-commerce has a more clear-cut business model.

3)      Amazon tried to enter the digital sale of wines  but abandoned the idea because they had legal problems in their most important market, the US. In other words, one can become an Amazon without having to compete with Amazon. This is cool. Isn´t it?

4)      When you focus on the user experience, you are adjusting more to the needs of your customers. These customers happen to be final customers. In other words, you focus on getting more and more customers, give them a superb service, build up loyalty and encourage them to come back to buy again and again. You share your customer database with the digital stores, but only a part of it. So if there are 15 digital stores within Uvinum then each of these stores only has access to a small part of Uvinum’s large database. 

I imagine that the 15 digital stores within Uvinum are competing with each other for clients. How do they catch these customers and prevent them from going to the neighbor’s digital store? Well, I guess that depends on their ability to execute on price, service and brand. The key challenge is to differentiate . Thus, Uvinum on one hand gives you an important amount of potential customers and on the other hand it makes you compete. Never has it been more true that your competitor is just one click away.

Do the digital stores indeed differentiate themselves? This is a subject for a much larger discussion, but there is no doubt that Uvinum differentiates itself from its own competitors a lot by it’s focus on user experience, good service and building loyalty.

Dicen que Internet elimina intermediarios. Y es cierto. Pero elimina únicamente aquellos intermediarios que no aportan valor añadido. Y da ventas a quienes aportan un buen servicio.

They say that Internet eliminates intermediation. This is a partial truth. It eliminates intermediaries that do not add value, but it gives opportunities and sales to those who provide a good service and accommodates their customers needs.

Uvinum is clearly adding value to its customers.

Are you?

This post in Spanish: Uvinum sabe lo que hace