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