International competition

[caption id="attachment_81976" align="alignnone" width=""]REUTERS/Charles Platiau[/caption]

Manuela Scognamiglio Manuela Scognamiglio

In Italy, winelivery is the only service specialized in “on demand” supply of wine, beers and cocktails in 30 minutes. Yet, wine-delivery in the broader sense is increasingly common in Milan: despite the absence of direct competitors, caused by the specificity of the market, winelivery must inevitably face the competition of large goods and food delivery services such as Amazon Prime, Just Eat, Foodora, Deliveroo, etc., together with the classic GDO (supermarkets, mini markets and wine shops). Compared to these food delivery services, however, for which beverages are not the main focus, winelivery has developed some characteristics specific to the alcohol sector that do its success nowadays. One of the key innovative aspects introduced by the start-up in the field is that they keep the drinks at a certain temperature until they are carried to the customer’s place. For instance, red wines are kept in cellars at around 18-20° and white wines, beers and cocktails are kept in fridges. Drivers bring the orders in scooter or bike, with containers that keep them fresh. The delivery promised in less than 30 minutes helps in this sense and satisfies customers faster than what is usually the case. This makes a customer willing to buy drinks turn to winelivery rather than, for example, Deliveroo or Foodora.

Most of the winelivery products are purchased through a consignment stock contract with their main suppliers. Winelivery uses at the same time a network of private suppliers, such as craft breweries and cellars; however, these are not the main sources of supply for winelivery which therefore cannot leverage economies of scale to increase its bargaining power.

In an initial phase, the bargaining power of buyers was not negligible: winelivery was new in the market and thus had to offer discounts and convenient purchases to the clients to build its network. The power gradually decreased as winelivery gained market share. It addresses final consumers, which number is increasing, and is very transparent with each one of them, with the aim of increasing their loyalty to the service. Furthermore, being confronted for the first time with such a service, buyers tend to accept the conditions set by the company.

The wine-delivery sector is particularly sensitive to the access of new entrants who could take advantage of the explosion of the market and the knowledge of the technologies already implemented by winelivery. Nevertheless, being a sector based purely on the positive experiences of the customer, high investment costs and constancy in ensuring a quality service are necessary for building customer loyalty.

The threat of substitute products is particularly low. In fact, the change in eating habits and lifestyles have meant that in countries traditionally wine consumers, such as Italy, this product no longer constitutes a component of a family’s ordinary nutrition and thus entering in competition, in its function of accompanying the meal, with other types of drinks. In addition, winelivery is used in fairly specific, mostly playful and need-related consumption occasions, during dinners and parties where alcohol takes on a social and fun role.

Eventually, winelivery operates in an industry that finds itself in the growth stage of the life cycle. Rivalry is fairly low, as well as barriers to entry, buyers are weak and the key focus of the company is to keep growing, betting on and further developing their resources and capabilities.

The internal analysis of a business starts from the disclosure of its main competencies which can be distinguished into physical, financial and human resources and capabilities:

  1. Physical resources and capabilities

Winelivery’s locals are in the center of Milan and equipped to keep every beverage at its optimal temperature. The place was the result of a strategic choice as it allows to reach every corner of the city in at most 30 minutes, which is one of the strengths proper to the company.

Their network of small and private suppliers makes winelivery able to have high quality wine, beer and cocktails, yet selling them at an affordable price. Moreover, the beverages are always delivered at their optimal temperature to the final customer.

The startup developed an efficient online platform that, together with the mobile app, eases and speeds up the process. They are readily available also via mobile phone, for the less digital-friendly ones. The marketing strategy set up by Andrea, the co-founder, at a low cost, made winelivery profitable in Milan, Bologna and Turin and increasingly known in Italy and Europe, in less than 3 years.

       2. Financial resources and capabilities

When ordering, the clients have the possibility to register their credit card, use paypal or pay directly to the driver; in which case, the latter would be provided with the right change.

      3. Human resources and capabilities

The two founders are very passionate about what they do and the project they are carrying forward and this is reflected in their direct involvement in each of their deliveries. For any issue or change of plans that may occur, they call the client to inform him, establishing a personal and trust relationship with him.

The team of drivers is a valuable resource. The accent is put on the one hand, as already mentioned, on the speed of delivery; on the other, on the pleasant customer approach.




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