The good folks over at NPR’s Planet Money had a short piece on pricing at jewelry stores recently (Episode 572, mysteriously not on their website). Frustrated with why jewelry stores hide the price tags of items in the case, the reporter wondered whey they would do that. It turns out that then shop owners can pull out a piece that a consumer expresses interest in and then tell the backstory.
So it made my wine mind wonder…why don’t boutique wine shops do that? Read more…
Eataly Wine will close for six months and its owners, including celebrity chef Mario Batali, will also pay a $500,000 fine per an agreement with New York state authorities yesterday. No date has been set for the start of the closing. The settlement resulted from the State Liquor Authority’s enforcement of a ban on “interlocking interests.” The SLA also claimed that the shop’s owners suppressed that information.
The turn of events is somewhat puzzling. It was no secret that Joe Bastianich sold wines that he made at his winery in the north of Italy. Indeed, the shop’s web site trumpeted the fact that he “returned to his roots in northeast Italy” where he is “creating wines” in Friuli. (That wording has now been removed.)
Crain’s NY reports that the issue came up at the time of the shop’s license renewal in 2012. At first, the owners disputed the charge but later relented. The penalty also includes the removal of Lidia Bastianich from Eataly Wine’s license.
The issue is what the “three-tier system,” which prevent vertical integration in the wine and spirits industry. This means that producers must sell to licensed wholesalers who, in turn, sell to retailers. (While there may be some gray area around this, the only clearly legal bypassing of this is where a producer can sell directly to retailers in the same state.) Thomas Pinney writes in A History of Wine in America, that this system came into effect after Prohibition because of the “deep suspicion” of the liquor trade at the time; further, states were determined not to allow the producers to control retailers, as they had in the old saloon system.
While societal “suspicion” of the industry may have diminished, for better or for worse, the ban on vertical integration remains, as the penalties on Batali & Bastianich reflect (for their retail operation; it will be interesting to see if Illinois authorities take a similar view of the Eataly Chicago wine shop.). However, methinks they will not become a cause célèbre for the reform of the system. Read more…
Gmail introduced some filters last month that pre-sort your email for you: if you’re not one of the half a billion users, emails that seem like bulkmail now get automatically sorted into a “promotions” tab out of the main inbox. I personally like it as it means fewer distractions. I check in once a day for 30% off skinny jeans coupons and discounts on backpacks at REI.
But I may be an anomaly since there’s an article in today’s Times that has a lot of hand wringing from email marketers. Apparently they feel that the “promotions” tab is tantamount to Siberia. The story didn’t have any actual data about a decline in open rates but it did mention that a few companies are clamoring to get dragged out of the promotions tab and waving special discounts to consumers to do so.
The wine industry has grown increasingly fond of email marketing in recent years, perhaps too fond as some retailers pummel inboxes several times a day with flash sales, special offers, and even just regular old offers. If anything, wine emails still seem a blunt instrument, spewing forth a barrage of offers, ranging from sweet to sparkling and every hue of wine. Wine emailers could take a lesson from Gmail and pre-filter offers higher up letting consumers just get pings about regions or styles of wine they are interested in and dropping other emails. There’s so much talk of mining consumer preferences, the one-size-fits-all model for email marketing seems from a bygone era. By maybe after the Gmail filters, email marketing itself may be taking a hit.
What do you think about wine sales emails today? If you’re a consumer, do you get too many? And if you send them, how has the Gmail filtering affected your open rate or sales? Oh, and if you subscribe to this blog’s posts using Gmail, be sure to drag them into your “primary” inbox.
The Senate is likely to pass a measure to have retailers collect sales tax for orders shipped out of state. The issue has been a hot-button issue since many big-box retailers perceive that online-only retailers have an unfair advantage and they have brought their largesses behind this tax equalization issue at the federal level. How would the Marketplace Fairness Act affect wine sales?
The answer is: probably not much.
Although wine e-commerce (hello, 1990s term!) has been growing, it is still hamstrung by regulations. Wineries can only ship to 36 states while retailers, who have much broader and more compelling offerings, can only legally ship to 12 states.
The other factor is shipping. If you buy a few bottles on the way home, you pay sales tax. But if you poke around online and throw some items in your virtual cart, you have to pay shipping even if you don’t have to pay sales tax currently. Let’s say the store charges $20 a case shipping, which is customary in the northeast for in-region shipments. If you’re buying $10/bottle wine, shipping is 16%, so it is almost prohibitive (unless the deal is extraordinary). If you order more than $300 worth of wine to have the shipping be less than the sales tax (assuming 7% sales tax). (Still, the online price may well be a lot cheaper than the in-store price, a phenomenon we have discussed before so it could be worth it.) If you’re ordering $300+ cases of wine, paying 7% sales tax is probably not a deal-breaker.
Such a law would therefore stand to impact wines north of $25/bottle and stores in New Jersey. Why sotres in New Jersey? Because if you do an online search for a wine, one from the Garden State usually is one of the cheapest available. Maybe there would be more shipping discounts in the wake of sales tax collection? But some of the lowest-price retailers are already extremely lean margins.
What do you think–how would the proposed sales tax bill affect your wine purchases? Or the wine industry writ large?
It’s January. There’s snow on the ground and the temperature dipped into the high teens last night. What’s a wine enthusiast to do? Why, try to freeze some wine, of course.
I wasn’t intent on making a wine Slurpee. In fact, my motivations were more in the name of science. Or pseudo-science. But what I wanted to know is whether wine would freeze if left out in a variety of circumstances that simulate delivery or shipping conditions in January for much of the country. Read more…
How to Spend It of the FT visits Hedonism, a new wine shop in London’s swanky Mayfair that has over $15 million in wine on the shelves. The owner–surprise!–is a Russian magnate, Evgeny Chichvarkin, now exiled from Russia and described as “hands-on proprietor” of the shop.
Spread across two floors, there are 1,000 spirits (600 whiskys) and 4,500 wines, including deep selections of Burgundy–looking for a six-liter ’96 DRC La Tache for $50k?–verticals of Bordeaux, and an entire room (pictured above) dedicated to California’s Sine Qua Non.
No Yellow Tail though–the cheapest wine starts at $20.
Amazon Wine went live today, in time for the important fourth quarter of wine sales.
The site appears very similar to what had been discovered previously (read how it works for wineries) and offers exclusively domestic wines with orders fulfilled by wineries. Shipping is $9.99 for up to six bottles and you can only order from one winery per order. Customers in only 12 states can order wine at this time. As of this second, there are 1,054 wines available for purchase, sortable by point scores, price, and even alcohol level. External links to retailers are also available, greatly expanding that number and adding imported wines.
It will be interesting to see how the program does. In general, wineries do not offer the best prices for their wines; retailers do. A quick search of a few wines plugged into wine-searcher, a database of wine retailers, revealed pre-shipping prices 10-25% lower than those offered on amazon.
While the pricing may be underwhelming, one area that Amazon Wine could have an enormous impact is in the user wine reviews. Right now, the space is dominated by CellarTracker, which has more community and a generally wine-savvy crowd. But amazon has mastered SEO, so if their wine listings start appearing at the top of organic search results, wine geeks could be drawn to post (or cross-post) on amazon. If they can find wines of interest…
The NYT magazine has an extensive profile (and terrific photo) of Jon Rimmerman, owner of Garagiste, a wine retailer that operates exclusively by email. The article says that he has over 136,000 subscribers to his emails and that he does “on average” $30 million of sales each year out of his office in Seattle. Even though his “florid, self-mythologizing” emails go out daily, he only ships twice a year in the cooler months. Since he doesn’t have a traditional storefront and is able to source the wines directly and often pre-sell the wines months before delivery, he has some efficiencies that can either increase his margins or decrease the price to consumers, sometimes both.
I don’t subscribe to his emails but I’m glad that he has been able to make a successful business connecting consumers with wines from the far-flung corners of the wine world (in this 2009 video, he said he has 3 million air miles). His style is akin to the erstwhile J. Peterman catalogue. But just as you might have gotten caught up in prose of J. Peterman and end up with a sun hat you might not ever wear, so too Read more…