By John R.D. Celock
(April 2014) At a time when online shopping continues to grow nationally, Governor Andrew Cuomo is smart to launch bold, new initiatives to promote New York’s growing technology sector. Already the state ranks third in the nation for technology jobs, according to the trade group TechAmerica. That is why it is so surprising that the state’s policy on one important element of e-commerce is anything but clear.
Across the nation, the vast majority of states have embraced internet wine sales—seeing the benefits they have for consumers, businesses, and government revenue. These states have issued guidance to internet wine sellers, and have interpreted existing laws to match the realities of the modern economy. In New York, however, regulators have issued no rules for online sales, and might even curtail internet sales—a policy better suited to 1934 than to 2014.
Access to e-commerce is a vital issue for rural New Yorkers. Online sales enable growth of local businesses by giving them access to a larger distribution channel and, consequently, the ability to penetrate new markets. For consumers, online sales promote competition, lowering prices on everything from food to books to clothing. E-commerce forces companies to offer higher quality products and better customer service. And, most critically for rural New Yorkers, buying online brings products from the far reaches of the world straight to their doorsteps, all with a few keystrokes and a click of a mouse.
Buying wine online is no different. As recently as a decade ago, New Yorkers were limited to the few wines they could find in local wine shops. The internet changed that, with wines of all varietals and regions available instantly. This is especially important to New Yorkers in rural areas and small towns who otherwise have few choices. Consumers can compare prices on their favorite wines. Efficiencies of scale bring lower prices across the board. Ordering wine for home delivery is easy and convenient (with appropriate safeguards to ensure only adults can buy it).
But the State Liquor Authority—which regulates wine sales—seems to suffer from internet-phobia. It seems more focused on protecting 80 years of status quo than on embracing the realities of the 21stcentury. E-commerce moves at a much faster pace, and on a much larger scale, than what regulators are accustomed to. It takes a lot of businesses to run a large-scale e-commerce site, from inventory managers and payment processers to website designers. These businesses support the retailers who actually sell the wine, but do not sell it themselves. Yet the State Liquor Authority is considering vastly expanding its regulatory framework to capture these businesses. The state needs sensible guidance that reflects the 21st century economy, not sweeping new regulation that will prevent hundreds of thousands of New Yorkers from shopping online.
Currently more than 3,000 residents of Madison County and neighboring counties utilize wine clubs, a number of that continues to grow. This growing popularity of wine clubs around Central New York shows that consumers are receptive to this option and want to fully utilize this for purchases. These regulations will negatively impact this population and decrease consumer choice.
The reality is that with 70 percent of consumers shopping online, and 80 percent of those shoppers using mobile devices, online shopping has opened up more retail avenues for consumers across the country. A consumer in Herkimer County can purchase antiques from Virginia or lobster from Maine or barbeque sauce from Kansas City with simply a few clicks on their laptop. The same consumers should enjoy their flexibility and convenience when it comes to a Napa red or Finger Lakes Riesling.
At 21st Century Consumers, we support efforts to increase consumer selection and enhance the e-commerce experience.
John R.D. Celock is the executive director of 21st Century Consumers.