Tuesday, November 26, 2013

Underground Cellar Shakes Up the World of Internet Wine Sales

jesse757For the past couple years, the wine consumer has been living large. Large grape harvests paired with an economic downturn left top-end wine producers with too much product and too few customers. Numerous “flash sale” sites on the internet popped up to sell the surplus at rock bottom prices.

From a selfish point of view (mine) this is great! Typically the wine deals are only available for 24 or 48 hours – but if you act within that window, you can score great deals. With a little bit of patience to wait for the right offer, you can also get free shipping.

For wineries, this obviously isn’t the greatest deal. They end up selling their wine at deep discounts which hurts their profitability. Their brand image is tarnished too. Of course, the pendulum is now swinging back the other way. The economy is better – or at least stabilized. We even have a real or imagined “wine shortage’ looming in the future.

When I heard about the launch of a new online wine site, I greeted it with a blasé “ho hum.” But when I checked out Underground Cellar, I was surprised. Here’s why…

Instead of selling off slow moving premium wines at discounted prices, they offer a different value proposition that’s a “win-win” for both wineries and consumers. Underground Cellars is a start-up founded by technology entrepreneur Jeffrey Shaw. Rather than offering discounted wines, they offer opportunities to upgrade for free to higher priced wines or private stashes of hard to get bottles from high-end wineries.

For example, they are currently offering a deal with Sapphire Hill Winery of Sonoma. It includes four different bottles, ranging from $20 to $85. You pay $20 per bottle (which is the price of their Merlot blend) and have a chance to be upgraded to a bottle of their Dry Creek Zin ($28), Cinque Gemma blend ($40) or a magnum of Pinot Noir ($85). The odds of receiving the bottles are 57%, 28%, 14% and 1% respectively. If you purchase four bottles, odds are your order will have a couple of upgrades.

So there is a bit of gamification to make things interesting! You don’t know what you get until your order arrives.

Another cool feature is the social media aspect. You have an opportunity to comment on the various offers and interact directly with prestigious vintners and wine aficionados. Each comment can build your “influence” which will increase your likelihood of getting an upgrade.

This next feature is something completely new to me. It is their “cloud cellar.” Everyone knows a downfall of online wine purchasing is the shipping. If you are buying cases, it is no problem – you usually get free or discounted shipping. If you are only buying one or two bottles, you can end up paying the cost of another bottle in shipping alone.

With the cloud cellar, you can purchase your wine and they store it for you in a temperature controlled cellar in Napa Valley until you are ready to receive the shipment. The beauty of this is you can wait until you accumulate six bottles (which would be $5 shipping) or 12 bottles (which is free). I also think it would be cool to say, “I’m expecting a shipment from my wine cellar in Napa!”

It’s well worth checking out the Underground Cellar site so you can see for yourself. I just ordered three bottles from the Sapphire Hill offer, wish me luck!

Full disclosure: Promotional consideration provided by Underground Cellar.

Photo Credit: Jesse757 via Compfight cc

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