Amazon goes into the wine business

Maybe Amazon knows something the rest of us don’t. Maybe the world’s largest on-line retailer’s much awaited wine store offers something that isn’t obvious at first glance.

Because, frankly, the debut of Amazon Wine, announced yesterday, is underwhelming. Or, as one winery official told me “In looking through some of their selections, there are ‘no’ bargains. In addition, Wine.com seems light years ahead of them.”

More, after the jump:

The wine business has been slobbering over Amazon’s wine store since Lew Perdue at Wine Industry Insight broke the story in September. Initial reports of a limited debut featuring select wines from mostly West Coast producers and sold by the wineries -- with Amazon serving as a marketplace and not the actual retailer – didn’t seem quite right, It wasn’t the Amazon way of doing business.

Turns out that was exactly what Amazon announced yesterday, and is what makes its on-line wine site so disappointing. You know that seamless shopping experience it offers for everything from books to music to hiking shoes to pots and pans? This isn’t it:

• A very limited selection, around 1,000 wines – or about what you’ll find at a good-sized regional wine retailer. By comparison, Wine.com offers “thousands” of wines. Amazon has fleshed this out by including third-party, independent retailers like New York’s Morrell Wine and Wine Chateau in New Jersey, which have established on-line presences.

• No free shipping, which will almost certainly be a huge problem given Amazon’s reputation for and reliance on free shipping through programs like Amazon Prime. The store will charge $9.99 for up to six bottles, which adds 15 percent to the cost of a $10 wine. By comparison, Lot 18, the discount site, charges $9.99 for up to six bottles and free shipping for larger orders.

• A very odd product mix that includes $100 bottles as well as Coppola’s $10 wines and Ariel’s non-alcoholic products, both of which are widely available in traditional retailers. Why would anyone buy them on the site and pay the shipping charge?

• Very limited shipping, to just 12 states and the District of Columbia The program doesn’t include Texas, with three of the largest wine markets in the country, and New York or New Jersey. Wine.com does 42 states and DC.

In this, shipping – as expected – is the program’s glaring weakness. Amazon’s decision to do an end run around the three-tier system by serving as a marketplace and not the actual retailer means consumers who buy wine on the site face what one marketing executive told me was “a bit of a confusing experience.”

Are they buying from the winery, which may not ship to one of the 12 states and DC that Amazon advertises? Are they buying from one of the third-party retailers, with its own shipping and pricing policies? Do they want to use the $9.99 shipping, which takes three to five business days (so much for buying a bottle of wine for dinner), or pay three times as much for next day shipping?

How confusing is it? There are a handful of New York and Virginia wines for sale, but residents of New York and Virginia won’t be able to buy them.

Having said all this, Amazon is the expert in on-line retailing, and if anyone can make it work, Amazon can. But this haphazard and clanky program doesn’t give one cause for optimism.

Comments

[bburnsey]

I have spoken to numerous people who live in rural areas, and use Amazon for the majority of their shopping. Some work out of their homes thirty miles from anywhere, and thus they maximize their savings through the various programs and discounts that seem to get better with the more you spend. Maybe they will have Amazon throw in a few bottles with their next order, the $15 still cheaper than driving to a bottle shop for wine. I can't think of any other reason to buy from Amazon.