Showrooming for wine?

Showrooming has emerged over the last few years as a common trend affecting high street retailers. More and more consumers shop online and without the costs of maintaining a physical store the online retailers can often provide better deals and flash discounts.

If you haven’t heard of it, showrooming is basically when you visit a bricks-and-mortar retailer to try on, test or find a product that you have no intention of purchasing in the store, and then buying it online for a better price.

A number of websites recently ran a story about a speciality food retailer in Brisbane, Australia that is now charging people $5 to browse; essentially an entrance fee. It is their attempt to reduce showrooming in their store and they will refund the $5 when the customer makes a purchase. The strategy was rightly and soundly ridiculed as misguided.

So is showrooming relevant to the wine industry?

I think that it could be starting to, in wine producing regions at least. Consider the Cape winelands in South Africa.

The Cape wine tourism industry is one of the best in the world. The natural beauty of the winelands is incredible, the people are (generally) friendly, the tourism infrastructure has taken leaps forward in the past five years and there is great value in terms of cellar door wine prices, interesting restaurants and unforgettable experiences. Hundreds of thousands visit the Cape winelands every year.

South African wine producers, like most internationally, are under huge financial pressure and the revenue from visitors to cellar doors is an increasingly important element of the bottom line. But wine tasting started out primarily as an opportunity for consumers to taste wines before they buy them and it this is still the case.

However, locals have more buying options these days and the cellar door is no longer always the best value place to buy. Writers like Neil Pendock have been vocal on the rise of discount wine retailers like GetWine, where branded bottles are sold off at significant discount. (The impact on brand equity is another topic altogether) Their prices are lower than the mainstream retailers but generally also lower than the cellar door. The producers may claim that the vintages the discount retailers are flogging are not current, but that doesn’t matter much to most wine drinkers, especially in the price brackets available.

Now you can spend a day in the Stellenbosch winelands tasting at some leading producers. Then simply order some of the wines that you have tasted online, cheaper and delivered to your door. And you don’t need to bother lugging the cases around with you the whole day.

Wine showrooming. Just like that.

I am interested to hear what some of the producers who are using GetWine think of this? Producers like Spier, Ken Forrester, La Vierge and Waterford, who have established and popular cellar doors. Has the cellar door objective moved further away from encouraging purchase and towards brand building and experiential marketing?

2 Responses to “Showrooming for wine?”

  1. Peter F May says:

    Great number of issues raised here….
    1) cost of shipping has to be added to cost of wine
    2) Why is cellar door price higher than merchants? Winery get a fraction of retail price when sold through normal channels
    3) If winery doesn’t want to undercut its merchants then they could have winery-door exclusive bottlings obtainable nowhere else.
    4) If a customer does buy the wines elsewhere then that is still a success because they haven’t bought someone elses wines instead and the winery will no doubt get repeat orders from that merchant
    5) But the winery visit should be much more than just a wine shop. Not only to image and brand build but also to earn money from add-ones like souvenirs, winery tours and restaurants. The success of a winery visit shouldn’t be measured by the number of bottles sold at the winery; its the chance to turn a one-time visitor into a life long customer who’ll advertise the winery by word of mouth
    6) As one of an increasing number of foreign tourists to the Cape winelands I can not carry many bottles home, so the winery needs to encourage me to buy their wine when I get home. They can’t measure the success of my visit by the bottles I buy at cellar door.

    If a winery can’t do a first rate welcoming cellar door they’d be better off not doing it at all.

  2. Andreea says:

    Hi Chris,

    Funny how I came along this post while looking for some information for my dissertation on Retail showrooming.
    …I wouldn’t have thought of looking at wine category, but you made a good point that I may consider for my research.