Moët Hennessy cut out the middle-men
The recent decision (May 2014) by French luxury goods company Moët Hennessy to launch a new e-commerce site that sells the company’s entire portfolio of wine and spirits directly to the public has been met with outrage by liquor retailers, Australian media report.
The new website, www.moet-hennessy-collection.com.au, offers competitive pricing on the company’s full range of luxury alcohol brands with metropolitan delivery times of one to three days.
Moët Hennessy defended its decision by saying that there is an “irreversible trend” of consumers seeking direct connections with luxury brands online.
Since the Moët Hennessy Collection’s products are often used as gifts, selling them to consumers does not compare with a “grocery model”, meaning people don’t buy them like washing powder. Hence traditional retail channels have become less and less important.
Moët Hennessy also stressed that they have no intention of getting rid of their retail partners. They reportedly said they see their own online platform as something that is “complementary and incremental”.
So why are the liquor retailers not convinced? Because the practice of suppliers selling directly to consumers has long been an emotionally charged issue for retailers. Generally, in the past, once suppliers recognized that they cannot do the job as well as a network of retailers, they tended to abandon the practice.
However, the internet may have changed this. If suppliers do well peddling their wares over the internet they don’t feel the need to return to retailers.
It seems that Australian liquor retailers have every reason to feel peeved. Moët Hennessy is not the only one to switch to online sales. Australia’s very own Winemakers’ Federation of Australia, which represents 2,500 wine companies, has enlisted 60 producers for an online venture enabling direct sales to the public for companies that may have been bruised by the bigger supermarket chains.
The website, www.fromtheproducer.com, currently lists 570 wines, and unabashedly declares that all money goes to the producer. “There is no middle man and there are no middle man charges,” it says. While it is mostly smaller winemakers on the website, some bigger wineries, such as Yalumba and Angoves, also have their products listed.
