How to Become Competitive in Alcohol Ecommerce
Solving the alcohol sales conundrum has been the bane of the grocery industry — er, the Prohibition, if not longer. Regulation changes from state to state or even county to the parish. Add in trying to keep track of inventory by way of distributors and keeping up with all of the limitations of selling alcohol becomes an exercise in monitoring constant changes.
But the fact is, buying your groceries and alcohol in one place is amazing for the consumer and results in higher sales for the retailer. Take it from this wine-lover: every time I head to visit friends in San Diego or Chicago, I end up buying one more bottle than usual while I’m at the store shopping for our gal pals’ dinner. It’s there, so why not stock up? (And when I’m in NYC we revert to buying beer or hard seltzer. I’d even argue that being able to buy “Claws” at the local bodega this summer contributed at least in part to its popularity of city-dwelling picnic goers.)
Going to a liquor store isn’t that difficult, but every opportunity to add to shopper convenience is worth it. And if we’re talking about convenience, we can’t avoid the ecommerce elephant in the room. “Basket size increases by almost 15% when alcohol is in an Instacart shopper’s basket,” according to Andrew Nodes, vice president of retail accounts at Instacart as quoted in Grocery Dive.
The article goes on to say, “And though online grocery currently accounts for just 5% of all online alcohol sales, Rabobank predicts that online grocery could become the most important driver of alcohol sales in the coming years.” Lugging home that case of beer or trying to time your trip to the liquor store while it’s still open is kind of a pain. The more retailers can bundle together solutions for shoppers and increase convenience, the more they’ll win out over competitors.
There’s no playbook, though, for driving ecommerce sales by incorporating alcohol, so while we figure it out as an industry, I thought I’d gather together some brands and retailers that are taking interesting steps in the right direction. Consider it inspiration as we collectively pave the path toward ecommerce growth together!
Develop an In-House Agency
Investing resources in developing ecommerce growth is a major factor in that growth. This has been true for non-alcohol CPGs who have invested in bringing ecommerce innovation teams in-house, and it will be true for alcohol brands too. For AB InBev this investment has manifested as ZX Ventures, “the global growth and innovation group within AB InBev,” according to their website.
Online retailing of alcoholic beverages is challenging, but dedicating budgets to marketing campaigns to drive awareness of offerings, market research to understand buying patterns, investing in innovative startups, and disrupting the usual purchase path are all areas that, if addressed, will help boost adoption and movement in the space.
Deliver Same Day
I remember in my early days at Chicory, when the retailers we had integrated onto our platform were still only providing delivery when scheduled a few days in advance, a number of users we spoke to told us if you could get this recipe delivered to me same day, that would be something I’d use much more. Unfortunately at the time, these kinds of logistics were out of our hands. But since then, online grocery retailers have embraced same-day pickup and delivery and the effects are noticeable. As these offerings were rolled out, Chicory user adoption grew by over 1500%.
The same will be true for alcohol delivery. Delivering alcohol, in many parts of the country, is challenging due to regulations. Wine.com ships packages that require signage and often take a few days to arrive. Drizly, on the other hand, can deliver within a few hours thanks to local couriers. We’re encouraged by companies like Instacart, who are doubling down on same-day delivery efforts. Plus, according to this article, “a new in-app banner calls out the new service and gives customers a link to shop beer, wine and spirits from participating stores.”
Bundle Food and Drinks In One Purchase
Along those lines of adding seamless opportunities for shoppers to amend their basket with a 6-pack or bottle of wine, we’ve seen a lot of success ourselves for brands that commit to “bundling” solutions for shoppers. In a recent campaign, a beer brand partnered with us to make a shoppable recipe video. The recipe promoted all of the ingredients that the shoppers needed to create a meal that paired perfectly with their brand of beer. Then, when clicked, the tech added all of the items the shopper needed to recreate the meal including the beer.
As a result of the campaign, we could project nearly $550,000 in products sent to online shopping carts, an over 10x return on campaign spend.
Know Your Audience
Finally, it’s worth admitting that there simply might be some shoppers who are more receptive to shopping for groceries online than others. Studies show that urban millennials are among the more engaged online shoppers, so testing initiatives in major urban areas and focusing marketing messaging on a 30-something buyer is a smart start to your initiatives. Once you nail success with this market, you can sustain some level of success as you tackle the more challenging personas nationwide.
Buying alcohol online is still in its infancy. But certain tactics will separate the “children” from the “adults,” so to speak. We’ll continue to look out for innovators who will shape the future of how we’ll be getting our wine online, and drinking it too.
To learn more about Chicory, explore our website or send us an email at hello@chicory.co !