Winedirect – a marketplace for all generations?

Listening to Joe discuss how he turned Winedirect around was fascinating. From the ashes of the global financial crisis, Joe grew Winedirect at an impressive 40% annually, facilitating more than $1billion in wine sales. Yet, even though Winedirect’s SAAS business enabled many small niche wineries to run e-commerce direct to consumers, Joe’s frustration was evident. Clearly, many of these wine producers were not optimizing their SAAS platforms. It is quite a shame. SAAS platforms have made it about as easy for non-digital natives to massively scale their sales and manage customer relations.

Given the massive consolidation amongst wholesalers and retailers, Winedirect’s future growth is now more strongly tied to the fortunes of small wine producers. This makes it more compelling for Winedirect to spearhead their own marketplace website; Winedirect has the knowledge of the wine business, a clearer understanding of consumer preferences, and most importantly, the digital expertise to drive customer eyeballs, engagement and retention.

We had an in-depth discussion in class on Wednesday with many good suggestions on what the marketplace must feature to win. However, I felt a great deal of discussion revolved around making a digital platform more approachable to those new to wine. Many of the suggestions were on catering to millennials’ desire for diverse and unique offerings, as well as sustaining their interest in a low attention span world. It is important to cater the marketplace to the millennials – who represent the future. But it would be remiss to pander only to them. While our case studies highlighted that Millennials were the largest US wine consumer segment, the 2017 Silicon Valley Bank wine report indicates that Millennials, with their limited purchasing power, buy wines at a lower price points.

Thus, if Winedirect chooses to become a Marketplace, it will need to continue targeting “traditional” Gen X and boomers. First, Gen X and boomers still trust ratings from authoritative sources. Wine scores of established wine critics like Parker, and magazines like Wine Spectator are still featured on bottles at retailers for that purpose. Second, Gen X and boomers do not have as large a craving for variety shared by millennials. Millennials can be fickle between wine varietals, and even hopping around to craft beer and domestic rye whiskeys. Gen X and boomers have a greater preference for consistency and brand names. They want their reliable Kim Crawford Sauvignon Blancs, and the occasional indulgence in some fine Duckhorn. As such, Winedirect cannot just be a marketplace for small lesser known wineries. Thus, Joe will have to strike a careful balance in creating a market place that will appeal to different preferences across age groups. Luckily, Winedirect as digital experts of the wine business are well positioned to curate a bespoke online wine purveying experience, across all generations.