2015
–
The Year of VinoMofo? In
July 2014 VinoMofo were claiming 260,000
members, in an email today (31 December 2015) they were claiming over
400,000. They
now have over 90 staff, have sold wine
from 330 producers (of over 2,500 total) and sold 3 million bottles of
wine in
2015. That’s
pretty impressive. They
have three main sales streams:
The
latter two allow them to avoid the
stigma of being classed as a bottom-feeder remaindering excess wine or
wine
that failed to live up to the makers desired RRP. I personally haven’t
been
tempted by the own-labels and can usually find the mainstream offerings
a bit
cheaper elsewhere. The
first one feeds the need of many people
to seem to be getting an unbeatable deal – and sometimes they are, but
mostly
they are relatively good wines that were priced too ambitiously for the
actual
quality and prestige. It all works though, with the best no-fuss
money-back
returns guarantee in the business. The
other factor which attracts some, is
tolerated by some (including me, but I’m an oldie) is the bubbly/brash
social
side, with graphics and prose and video segments (I can’t watch them)
enticing
the younger generation to enjoy wine, learn a bit about wine (and step
up and
grab a bargain). The level of community and social interaction is
pretty
relentless and seems to be a genuine aspect of the operation rather
than
contrived. The
strategy of mystery wines has been so
successful that many other wine sellers from the major chains down to
the major
independents have had to adopt the strategy also. The
acceptance by producers of this heavy
discounting in return for quick sales as a “mystery” wine is a major
coup in an
industry with a reputation for resistance to discounting and for ego in
price-setting. Several of these producers have been surprised at how
quickly
(5-10 minutes in some cases) it takes to identify the wine and the
reaction
from existing customers. Others keep coming back with new mystery
offers, so
must be happy with the arrangement even though they know the wines are
being
publicly identified. The
full ramifications may not yet be
obvious, there is at least one small producer (probably two) that I
used to buy
direct from that I won’t in the future, having seen wines I bought
appear much
cheaper on VinoMofo not long after. Having
bought many (identified) “secret”
wines and having enjoyed many of the purchased wines I’m however
unlikely to
buy many of those makers wines at usual (discounted from RRP) retail
price. If
I am typical, the winery hasn’t procured too many new customers by
their
participation in mystery deals. This is all the stranger as many
wineries
selling direct normally offer little case discount and charge for
freight, yet a
significant number seem willing to give away 50% or more for a quick
sale via
VinoMofo or elsewhere. Perhaps if they had a better direct sales
strategy they
wouldn’t need to do that. I
know the producer/distributor/retailer
relationships are sometimes restrictive, but if they can sell easily
identified
“mystery” wines at 50%-70% off RRP, they could probably work out
20%-30% off on
direct sales to “club members” without destroying those relationships,
or maybe
even avoiding the need for distributors by selling direct to members
and
retailers. Despite
having no decent competition from
Coles, the Woolworths wine sellers seem to be digging a bit deeper at
times
this year, with Dan Murphy, Cellarmasters, Wine Market “mystery
offers”, $20
and $50 vouchers like confetti at times, 20% off sales regularly, 30%
off at
BWS every month or so. Even Graysonline associate Only Online has had
20% off sales
including wine, with some good deals to be had from those offers. If
this strategy continues, the smart
buyers (and even the not so smart) who buy wine in 6-packs or dozens
will
mostly only buy wine when there is a voucher or special deal on offer,
with
VinoMofo filling the gaps between those offers. There are already signs
of
older vintages languishing on shelves in retailers and having to be
cleared at
severely reduced sale prices. My Forum has regular threads when BWS
does this,
highlighting the best deals at various stores. This
year TWE (again) cut the selling price
of the Lindemans Coonawarra Trio approximately in half and I have no
idea
whether the RRP is still $70 or $50, it was selling widely in the low
$30’s.
Wolf Blass Grey Label likewise, selling down to close to $20pb with the
chain
$50 voucher or 20% off and $25-$28pb on other regular offers. I
certainly
bought more of these than I otherwise would have, but I see little
value in many
of the big producer offerings, my buying is mostly from smaller
producers who
easily fill the gap left by the major producer price increases breaking
my
price/quality limits. Outside
the major chains, it’s not all doom
and gloom, with the better independent wine retailers doing it well,
focusing
on imports, small wineries and premium wines, offering sharp pricing
and good
service. They don’t need to offer vouchers or 20% off sales, they pick
up
desirable new releases quickly and work on relatively low margins,
repeat
business is ensured. There are hundreds of online and mail/phone order
wine
retailers, but I probably only deal with about 20 or so as the
offerings,
prices or service of the others doesn’t suit my needs. Sorry,
my crystal ball isn’t working right
now. I’ve got some questions though that I would like answers to. Will
VinoMofo continue to find producers
with excess stock willing to feed the “mystery wine” monster with wine
good
enough tempt buyers? The continuing glut and difficulty getting retail
or
export traction for small/medium wineries seems to indicate they will. Will
VinoMofo be able to expand their
operation in some overseas markets? Seems they are intending to proceed
fairly
carefully, I can’t even guess how it will go. Will VinoMofo revive the old QWOFF-style member community?
They said some time back they intended to, but making that work with
400,000+ customers has some challenges, the Winestar Forum languished
as the business grew and there are limitations imposed by the seller
relationship and the need to be seen to be keeping many wine deals
"secret". Will
Coles get their act together and offer
some real competition to Woolies dominance? There are no signs of that
yet that
I can see and the distance between them is so great that it may not be
worth
the effort. Will
Woolworths decide to go after the
“independent” market, those discerning buyers who currently buy direct from wineries or
from the
better independents? Maybe Langtons was supposed to be the start of
that, but the
Langtons website (auction and sales), offerings and service are so deficient there surely
hasn’t
been much traction there. If they can’t make Langton’s work properly,
they can’t
run a new arm to poach buyers from the independents. The My Dan
Murphy’s
initiative was also a start, but despite identifying me as a “red wine
connoisseur” the offerings are not that well targeted or tempting. I
only buy
occasionally at DM, whether they be “loss-leaders” or just special
sharp deals,
their regular prices on the wines I want are seldom the best around or
they
just don’t stock them, even with the new Connections arrangement. Will
the languishing dollar increase
exports enough to reduce the local glut, hence reducing the amount of
wine
being cleared at huge discounts? Who knows, probably not. Will more wineries get their direct sales act together? I hope so. Will the good independent merchants survive and prosper? Yes,
they will, because people like me and my Forum members support them for
offering good wines at good prices with good service thrown in. Who will come up with the next big idea in selling wine? If I knew the answer to that I wouldn't be telling. Here’s
looking forward to another exciting
year of finding lots of good wine at affordable prices. Red
Bigot 1/1/2016
VinoMofo
Effect on other wine
sellers
and Producers
So, what will 2016
bring?
