How Millennials and Emerging Markets Are Shaping the Future of Online Wine Sales

Young woman is shopping online using her credit card and laptop on a rainy day

Although 2023 saw a decline in online wine sales following unprecedented growth during the pandemic, recent sales numbers suggest this shift is more of a market correction rather than a sign of long-term decline.

According to industry experts, the future of wine ecommerce lies in brands’ ability to understand and adapt to the evolving behaviors and preferences of consumers, especially in the context of varied market dynamics across regions.

“Technology and ecommerce offer a huge number of benefits in terms of the wine purchasing experience,” Guy Wolfe, head of ecommerce insights at beverage industry research firm IWSR, tells Forbes. “Consumers can shop a much wider range of products on the near-limitless ‘digital shelf,’ while having access to greater information about the product or brand and being able to compare prices, reviews by other purchasers and so on.”

Wolfe observes that, while online wine sales in 2023 have seen a dip, they still stand nearly 40% above their pre-pandemic figures, reaching around $11 billion globally.

“The recent dip in wine sales can primarily be attributed to its advanced development in the ecommerce sector. Approximately 7% of all wine is sold online, in contrast to just 4% for spirits and 2% for beer,” explains Wolfe.

The advanced maturity of wine ecommerce was advantageous during the pandemic but has presented challenges as other alcohol categories start to enhance their online presence.

Wolfe advises that wine companies should concentrate on better understanding their customers and refining their online marketing strategies to rebound their position in the online alcohol market.

“Understanding the consumer base, their online search patterns, and the variations across different ecommerce channels and platforms is crucial for brands,” he suggests.

Brands that customize their digital content to meet specific consumer demands can greatly enhance their presence and effectiveness in a competitive online landscape.

Millennials, in particular, are key to the future of online wine sales, especially in new markets. Wolfe points out that this demographic is deeply involved in online shopping, often undertaking thorough research before completing a purchase.

“Creating high-quality digital content that spans multiple platforms is vital for attracting millennial customers and is likely to yield significant returns,” he mentions.

This generation’s buying patterns are heavily influenced by a brand’s values, making it crucial for wine companies to clearly express their identity consistently through all digital platforms.

The study highlights that there are marked differences in the online wine buying behaviors between mature and developing markets, suggesting a need for customized approaches.

In established markets such as Australia and the UK, traditional e-commerce platforms like supermarkets and specialized retailers, which cater mostly to a mature audience, dominate online wine sales.

On the other hand, in emerging markets where both wine consumption and e-commerce are advancing simultaneously, the consumer demographic is younger, aspirational, and more familiar with purchasing through applications and social media platforms.

“In emerging markets, the wine market has developed in tandem with the ecommerce channel and is being driven by younger demographic groups often part of a rising middle class,” Wolfe says.

Therefore, a one-size-fits-all approach is unlikely to succeed, and brands must develop distinct strategies for different consumer groups and markets.

The rise of rapid delivery services, in particular, has also transformed consumer expectations, particularly among younger generations. In markets where quick commerce platforms are prevalent, such as Brazil, rapid delivery is a key driver of ecommerce growth.

However, the logistics of delivering wine quickly present challenges due to the lower value-to-weight ratio compared to other alcohol categories like spirits, and delivery costs can quickly add up.

“It tends to be less of an issue in regions with relatively low labor costs, such as Latin America, hence greater importance of quick commerce here,” Wolfe explains. Rather, he continues, this challenge is compounded in markets with higher labor costs, such as the United States, where concerns over alcohol access by minors have also impeded the development of rapid delivery services.

“Now IWSR consumer research indicates that Millennials and legal-aged Gen Z consumers in particular overwhelmingly expect (and are prepared to pay for) the added convenience of rapid delivery—including for wine,” he says.

To thrive in the evolving ecommerce landscape, wine brands must leverage technology to enhance the online experience. Wolfe emphasizes the importance of creating a seamless and consistent consumer experience across all touchpoints, from digital platforms to in-person interactions such as winery tasting rooms.

“If brand owners are not following up that experience with tailored digital marketing, an online club/subscription service, a strong social media presence, etc.,” Wolfe says, “then they are without doubt missing out on a significant opportunity to grow brand loyalty and ultimately sales.”

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About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!