How to Build a StitchFix for Wine

Should Amazon make a big play into the wine space, they'll only add to the problem already plaguing many wine buyers today - an overwhelming paradox of choice. Amazon is not known for their merchandising, and its endless aisle is rather hard to shop unless you know exactly what you're looking for. Our discussion highlighted the opportunity for someone to move into the space with the angle of providing a curated selection and personalized recommendations.

Having worked at StitchFix this summer, my thought immediately jumped to the idea that there should be a StitchFix for wine, i.e. collect preferences, send personalized selections of wine, collect feedback, refine and repeat. I, for one, would love to use that service. I'm vaguely aware that many players have attempted to solve for this (I seem to be a good target for social media advertising), but to my knowledge, no one has figured out how to make it work or at least how to make it stick. My opinion is that brand counts for a lot. I strongly believe that StitchFix and Amazon can coexist in the world of fashion largely because StitchFix solved the paradox of choice that Amazon created. Before Amazon made a play towards personalized clothing recommendations, StitchFix created a strong and widely recognized brand; so now millions of consumers think StitchFix before they might think Amazon as a destination for this need. So for a player like WineDirect to be successful with their bet on curation, I as a wine buyer must think WineDirect before I think Amazon.

There are many other critical pieces of this puzzle that are important to get right in order to set-up a successful play in personalized wine recommendations. The one I'm deeply familiar with from my experience at StitchFix is figuring out how to most effectively collect data on preferences and feed those into a recommendation algorithm. While figuring out the right way to ask questions to assess wine preferences, which is likely rather tricky, my hypothesis is that the recommendations themselves are actually easier get right for wine than for clothes because I'd guess that to the rather untrained palate, 9 out of 10 wines hit the mark on enjoyable. Then the feedback loop becomes the core of the value proposition, and in relatively short time, the wines recommended could go from good enough to great or even outstanding.

I'm confident that if you put enough smart and capable people on this, they can create a really effective wine recommendation, so the discussion will always circle back to the importance of brand building. With Amazon's acquisition of Whole Foods and with all the potential for what they may now do in the wine space, the window of opportunity to establish a brand as the go-to place online for a curated selection of wine is closing for these other players. Because while I cringe at the thought of scrolling through page after page of options trying to pick wine, I do love the idea of having wine shipped to me for free on Amazon Prime.

The Marijuana Hypocrisy

What really struck me in this week’s class was Tracy’s response to questions about the marijuana industry, particularly about the wine industry’s view of the marijuana industry as direct competition. While I fundamentally disagree with the notion that cannabis is a substitute for wine (I simply don’t see people picking up a joint instead of a glass of pinot noir), I can understand wine producers looking at the immense buzz surrounding marijuana as a potential threat to their current business.

What I was not expecting was her comment about wine being a “traditional” industry with old school values, old school values that lead wine entrepreneurs to take actions that make it difficult for cannabis groups to enter the industry. I consider this outlook exceptionally hypocritical and a classic example of the once young upstart becoming the old guard.   Less than 100 years ago weren’t liquor producers seen as deviants and criminals? Isn’t this exactly how established wine companies are now looking down at marijuana producers?

If I was in the California wine industry in the production or distribution domain I would lean into the marijuana industry, partner with marijuana producers and attempt to leverage my massive facilities and existing infrastructures to double down on what I see as not a substitute but rather complimentary product.  Instead of attempting to keep marijuana out of the old boys’ club I would instead embrace this product and the many options for brand and product integration and ultimately create alliances within the growth industry.