Industry concerns are being raised about what the ‘quick ‘n’ easy’ mentality of online shopping through platforms such as Amazon may do to wine retailers, cellar doors and their direct-to-consumer (DTC) sales.
This week, it was announced by Amazon that its new online alcohol store had been launched on its Australian domain. Well-known brands such as Penfolds, VB and even Johnnie Walker made the cut to have their products listed on the site alongside emerging local brands such as Curatif Cocktails, SOFI Spritz and Lawrenny Estate wines.
At the time of the launch, Amazon Australia country manager, Matt Furlong, said customers will be able to experience “the convenience of ordering their favourite wine, beer or spirits alongside all the other products available on Amazon.com.au”.
|Professor of wine marketing at the University of South Australia Larry Lockshin believes the move by Amazon, while it is a significant event, won’t be a negative for producers in the domestic alcohol market in the short term.
“Amazon will enter a very crowded liquor marketplace, just like Aldi did a few years ago. Yes, Aldi has taken share across the board, but has not decimated its competitors,” he said.
“Over time, [online alcohol sales through Amazon.com.au] will have a major effect on the market, similar to what they are doing to department and variety stores.
“Amazon will probably do the same for Dan’s online and other online shopping, but not put smaller independents out of business.
“They are limited by Australia’s large geographic area compared to population, so they won’t be able to do things like two-hour delivery like they do in many US cities. But they will have low overheads.”
In addition to the added competition for online alcohol sales between retailers, producers and now Amazon, Professor Lockshin believes that Amazon’s addition of alcohol to its online store could benefit larger producers over smaller ones, but added the realities of this are difficult to predict.
He adds that changing consumer habits, in lieu of the COVID-19 pandemic and subsequent lockdowns of many stores and venues, although Australian alcohol retailers were classed as and ‘essential service’, might not be as impacted as previously thought.
While wine drinkers with a cellar at home might shop in advance, Lockshin says the average wine consumer might not give much thought to inline sales when their local bottle shop may be just down the road.
“I think there will be some move to online alcohol buying but it won’t be massive,” he said, “many people do not stock much wine at home and will instead go to the most convenient outlet when they need a bottle of wine”.
“It takes forethought to buy online and some more frequent, higher involved wine drinkers might check Amazon out, especially for price comparisons, but if Amazon only stocks larger brands, these kinds of buyers will not buy very often.
“They might, for example, shop a Penfold’s sale on Amazon, but not go there looking for their Margaret River or Coonawarra Cabernet.”
Other growing concerns for consumers about the underage purchasing of alcohol through Amazon’s new online alcohol store are being put to rest thanks to the company’s thorough age verification processes.
To combat underage alcohol purchases, Amazon has set up multiple precautions to ensure the purchase and delivery of alcohol is done appropriately.
To stop people aged under 18 years buying alcohol, customers will need to provide their date of birth upon checkout and another age check is conducted upon delivery.
A spokesperson at Endeavour Drinks Group, one of Australia’s largest drinks retailers, shares the sentiment that many wine, beer and spirits consumers won’t shop to stock a cellar and welcomes competition, adding it will help keep their retailers at peak performance.
“Endeavour Drinks is a customer first business, and our retail brands BWS, Dan Murphy’s, Cellarmasters, Langton’s and Jimmy Brings are focused on offering our customers the best possible shopping experience in our stores and online,” they said.
“We welcome competition because it will help keep us at the top of our game for customers.”
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