The World Of Online Wine 2012
This February, Lot18 launched in the UK. Last November, a year after opening, the company had already registered over half a million members. Lot18 is a significant leader among growing number startup online wine companies
which are capitalising on the fruitful relationship between the centuries-old wine trade and modern technology.
The birth of Flash wine sales sites
- Wine sites such as the Bordeaux Index have been going since 1997, but most Flash wine sites are less than ten years old.
- What is a Flash wine sales site?: 1) Flash wine sales sites choose a selection of wines for their customers; 2) Many of these sites are members only. They offer a limited amount of stock over a limited time period at a discount. Most
people on a first-come-first-serve basis.
- Number of offers January 2012. A company's focus can vary depending on whether they aim to sell the cheapest wine possible, source wines of high quality, or strike a balance between the two: 1) Wine Woot - 27;
2) Wines Til sold Out - 154; 3) Wine Spies - 32; 4) Cinderella Wine - 41; 5) Last Call Wines - 149; 6) Invino - 118; 7) Lot18 - 113; 8) WineShopper - 42; 9) Last Bottle Wines - 30.
- Average price of offers January 2012. The level of the average price may reflect the intended clientele of each site: 1) Wine Woot - $22.05; 2) Wines Til sold Out - $24.62; 3) Wine Spies - $25.93; 4) Cinderella Wine - $21.71;
5) Last Call Wines - $23.98; 6) Invino - $20.72; 7) Lot18 - $29.35; 8) WineShopper - $19.17; 9) Last Bottle Wines - $37.67.
- Average discount on offers January 2012. Different companies may place a different emphasis on either quality or price: 1) Wine Woot - 31%; 2) Wines Til sold Out - 51%; 3) Wine Spies - 29%; 4) Cinderella Wine - 43%; 5) Last Call
Wines - 37%; 6) Invino - 47%; 7) Lot18 - 30%; 8) WineShopper - 38%; 9) Last Bottle Wines - 51%.
- Pageviews in January 2012. The pageviews below may suggest that due to the UK launch, Lot18 is generating a lot of interest (all numbers in thousands): 1) Wine Woot - 612k; 2) Wines Til sold Out - 204k; 3) Wine Spies - 29k; 4)
Cinderella Wine - 11k; 5) Last Call Wines - 71k; 6) Invino - 225k; 7) Lot18 - 766k; 8) WineShopper - 104k; 9) Last Bottle Wines - 6k.
Lot18 vs.Wines Til sold out
- Even though they are two of the biggest Flash wine sales sites out there, in many ways Lot18 and WTSO could not be more different; not least in terms of how long they have been around (see above).
- Lot18: 1) Sales - half a million bottles in its first year; 2) Highlights. in its first year, Lot18 raised a staggering $30 million in a third round of capital. Lot18 raised $3m and $10m in the first and second rounds respectively.
- Wines Til sold out: 1) Sales - 3.5 million average per year (7000-12000 bottles daily); 2) Highlights. On Wednesday 22 February 2012, WTSO had its second $1 million day. In one of its famous marathon events, the site
sold 87.000 bottles in one day.
Alternative models: email only
- Jon Rimmerman, founder of Garagiste, has been making his flash wine offers through email alone since the 1990s.
- Garagiste did not set up a website until 2010.
- Garagiste now has 120.000 followers and makes up to $30 million a year, based on a $500 initial investment.
- The email model shows how the Internet celebrates the skills of the expert oenophile to the ultimate benefit of the customer and artisan winemaker.
Choosing a wine company
- From the Garagiste to WTSO, to Lot18 we can see the variety of approaches the wine industry can accommodate. Last year, Berry Bros & Rudd, who have been trading in wine for over 300 years sold $39 million of wine online.
- The Internet has also allowed traders to tap into the rapidly expanding market in the Far East. The only question is now, that out of all these companies, which company do you choose?
Sources: Data for the following sections from www.winesandvines.com: Number of Offers January 2012, Average Price of Offers 2012, Average Discount on Offers January 2012; Data for the following section from compete.com:
Page Views in Januuary 2012; Lot18: http://siliconangle.com/blog/2011/11/04/lot18-closes-30m-round-as-deals-sector-takes-off, http://allthingsd.com/20111104/exclusive-lot18-closes-third-round-in-a-year-this-time-for-30-million,
http://smallbusiness.foxbusiness.com/sbc/2011/11/11/young-guns-wine-startup-for-oenophiles-and-average-joes-alike, http://econsultancy.com/uk/blog/9196-wine-site-lot18-launches-in-the-uk, http://econsultancy.com/uk/blog/2785-
q-a-philip-james-ceo-of-wine-comparison-site-snooth; WTSO: http://www.smallbusinessinsider.com/wow-the-woot-of-wine-just-had-a-million-dollar-day-2012; Garagite: http://www.bloomberg.com/news/2012-03-05/insider-wine-
sleuth-rimmerman-seeks-bargains-for-internet-sale-elin-mccoy.html; Berry Bros rudd: http://www.andoveradvertiser.co.uk/business/9549147.Wine_merchants_toasts_online_sales_of__25million; Bordeaux