Amazon brings algorithms to U.S. wine retail

The online retailer muscles into the market with a new section dedicated to the stuff. How will algorithms impact the industry?

Author's note: It's odd to write this from the Commonwealth of Pennsylvania, where wine sales are completely regulated by the state, but hey, that's life.

Amazon -- the online retailer known for selling just about everything and making the Kindle e-reader -- announced this morning the launch of a new section that puts "more than a thousand wines" within a click or two for American customers.

It's an interesting strategy for the company, for several reasons:

  1. It's muscling in on an established, state-regulated market;
  2. It brings economies of scale to an industry that's not particularly known for it, thanks to the above;
  3. It leverages Amazon's algorithms. (Imagine "You might also like..." for wine. Amazon the sommelier, powered by big data?)

Indeed, the Amazon Wine store offers information from winemakers, such as tasting notes, recommended food pairings and total case production. And, of course, those love-'em-or-hate-'em customer reviews.

"What Amazon has done with their new wine store is take the experience of hundreds of tasting rooms and put them online," said Tom Hedges of Hedges Family Estate in Red Mountain, Wash.

For now, you can ship up to six bottles of wine for $9.99. U.S. states included in that arrangement are California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia, "with more coming soon."

It will be interesting to see if Amazon's centralized system gives it political leverage to even the interstate playing field when it comes to the beverage -- not to mention how its presence will affect price points for individual wines. (Will cheap wine get cheaper? Will it help smaller wineries' wines become more popular? This is, in many ways, the Walmart effect at work.)

This post was originally published on Smartplanet.com

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