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E Commerce Impact On Wine Industry Essay

1058 words - 5 pages

Topic and rationale:
The wine industry has faced many legal stumbling blocks as it evolves with consumer’s preferences of buying wine on-line. The shipment of interstate wine is finally coming to terms with the consumer market, through compliant solutions and by changing the legal environment in which it operates. Many companies are making their services available to facilitate the wine industry’s needs to sale wine through E-commerce channels. This journey has been hard fought and contains a rich history of legal battles. Small wineries are seeing relief from having to sell their product through wholesalers, who take a substantial markup before a bottle of wine reaches the customer’s hands. Now that wineries have direct to consumer channels to sale their product, they are paying catch up to the technology age. This research paper will focus on the history of direct to consumer hurdles and the importance of building consumer relationships through on-line channels, such as social media and retailer websites.
Research Question: How is E-commerce changing the way the wine industry conducts business in America?

Greg Bensinger is the chief executive of wine.com. Wine.com is a pioneer of wine E-commerce and has sold wine on-line since 1998. In this article, Besinger explains the regulations and shipping limitations that have caused E-commerce companies to stumble in the past. This article will be great to use as a primary source and it also mentions situations and other companies to explore in further research. Some key terms from this article that can be further searched are, “wine-shipping rules/ or regulations”, “wine.com”, “history of online wine market”. This article also refers to the advocacy group Free the Grapes. This advocacy group is a coalition seeking to remove state restrictions that prohibit consumers from purchasing wines directly from wineries and retailers across state lines, including on-line purchases. This coalition group has a website located at http://freethegrapes.org/. The Free the Grapes website has a massive amount of information on the regulations and limitations that make it financially expensive and time consuming for companies to sale wine through E-commerce.

Even before the thriving E-commerce markets of today, there was a concern regarding wine trade barriers between states in the U.S. and how these trade barriers encouraged higher prices to consumers and supports regulation that restricts competition. This article focuses on the effects of reducing interstate trade barriers by analyzing competitive pricing strategies between on-line and brick-and –mortar wine stores. By analyzing data of wine sales over many years, this article observers price fluctuations between years before and after the legalization of direct shipment in Virginia. By imposing stiff regulations against wine direct shipment, states are limiting market competition. It was found that the average online price for a bottle of wine is lower than the...

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