Consumers are about to start adding beer, wine and spirits to their digital shopping carts like never before.
The grocery industry’s eCommerce surge will soon hit the liquor/alcohol industry.
In 2016, 29% of digital consumers in the U.S. purchased groceries online at least once a month. In 2017, that number hit 37%, yet weekly, physical grocery store visits remained steady at 10%.
While those percentages are lower in Canada (for now), the Canadian online grocery market is still forecast to hit $3.6 billion in 2019.
With obstacles like varying laws across states and provinces, age limitations and dynamics like the 3-tiered distributor system in the US (which requires the presence of a distributor or wholesaler in all alcohol sales), are we really on the brink of a dramatic change in how alcohol is sold?
The answer is “yes” and it is time for alcohol suppliers, wholesalers and retailers to be preparing their digital shelf (more on that in a second).
Why are alcohol sales going online? Short answer: because today’s consumers are digital but more specifically because:
- Almost 100% of millennials (soon-to-be alcohol retail’s largest customer segment) have reached the legal drinking age.
- Gen Z has begun entering adulthood
- These young, digital consumers expect convenient online shopping and fast fulfillment, regardless of the industry or product in question.
Location! Location! Location? The switch to digital shelf space.
Traditionally, suppliers, wholesalers and retailers have spent a lot of money to secure brand visibility in physical spaces – on billboards, on print material like flyers, or on shelves at the liquor store’s entryway.
With consumers spending more time online and increasingly shopping online, the market’s status quo is shifting. Manufacturers/suppliers, distributors and retailers therefore need to be tending to their digital shelves – the online placement or presence of products, relative to other products.
8 ways to build out your digital shelves for alcoholic beverages and accompanying products.
1) Follow the eCommerce Basics:
In the same way a wine label’s design draws a customer in, so should a website. An intuitive, tested, and attractive UX invites your consumers (including the older, less tech savvy ones) to spend time on your site. The steps from product discovery to purchase and re-order should be clear and even enjoyable to navigate.
While in many places in North America, alcohol brands cannot have a transactional website, they can still ensure that their distributors and retailers have the content necessary to support sales.
2) Be Proactive About Product Information:
Ensure consistent, accurate and detailed product information across eCommerce channels. Whether you are selling on your own platform, a grocery store’s website or Amazon, information on your products should match up. This includes relevant content on the brand stories, recipes for drinks or party ideas. Consumers increasingly want a myriad of stories and information about what they are buying. Make sure they don’t have to go searching for it (as navigating away causes an increase in bounce rates).
Product Information Management (PIM) systems allow companies to spend time enriching their product information, rather than searching for it across spreadsheets and departments.
3) Be Findable:
Research from eMarketer states that 56% of US internet users use search engines for researching brands and products, making search the most popular channel for product discovery. Amazon was second, at 52% of respondents, while reviews – often found on retail sites as well as via search – were mentioned by close to half of those polled.
The dependence on search is also present in the grocery industry; when deciding what to purchase, 66% of people consult product reviews, 63% look at eCommerce sites like Amazon, and 53% use search engines. Search Engine Optimization strategies allow consumers to connect with you across channels. When a consumer goes to look up your brand, you need to be visible.
4) Go Omnichannel:
46% of US smartphone users looked for a coupon for beer/cider on their phones, presumably at home and in store. Customers need to be able to interact with you in person, on their phones, through their desktops and increasingly through voice interactions. Search and omnichannel go hand-in-hand, allowing you to fully build and tend to your digital shelf.
5) Complete the Task with Inventory + Fulfillment:
The surest way to disappoint consumers is to have products that are out of stock or delivery that doesn’t arrive on time. Live inventory checkers, delivery tracking and free shipping can give your customers the transparency and experience they want, making consumers excited to do business with you.
6) Boost B2B Sales Growth:
If you are an alcohol wholesaler, are you giving your partners everything they need to increase their sales? Think APIs that link to your backend so partners can feature your content on their sites and simple order and re-order processes, regardless of complicated customer-side workflows. It is important to have an eCommerce platform and an eCommerce partner that is well-versed and experienced in B2B.
7) Get Personal:
79% of commerce companies who had a documented personalization strategy exceeded their revenue goals, demonstrating that when it comes to attracting and retaining customers, retailers can no longer treat everyone the same. Personalization can be as simple as emails that feature the customers’ name and as complex as landing pages that are automatically generated to feature customer-specific products and deals.
8) Create Convenience:
For the first time in 2016, consumers in the U.S. spent more food dollars on restaurant-prepared meals than on meals prepared at home. Increasingly, consumers are using digital platforms and third-party apps to have restaurant meals delivered to their homes. The alcohol industry needs to figure out how it fits in. One possible response is the implementation of a buy-online, pick-up in store function AND collaborations with 3rd party platforms for delivery.
Overall: Developing an effective and profitable eCommerce strategy will require all members of the supply chain to reframe their understanding of retail to include the digital shelf. Now, eCommerce is not just a channel for sales, but the foundation of retail.
For a deeper dive, read our white paper on alcohol and eCommerce.