DTC Alcohol Markets Help Small Retailers Launch Digital Sales

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This story was originally published on CO— by the United States Chamber of Commerce and was written by Jackie Chiquois.

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Throughout the pandemic, consumers weren’t just drinking and socializing differently, but were also buying wine and spirits in new ways.

Before COVID, online sales were a single-digit percentage of average alcohol retailer sales, says Mike Provance, CEO of the Data-Driven Alcohol Marketing Network 3×3.

Then, online alcohol purchases increased during the lockdown and remained high from pre-pandemic levels: the United States is now expected to overtake China as the world’s largest market for sales of alcohol online after years of delay, according to IWSR.

As more businesses move online, a new generation of third-party platforms, including 3×3, Wine lover and alcohol e-commerce platform City beehive, help small and medium-sized wine and liquor retailers differentiate themselves by creating synergies between the online shopping experience and traditional in-store markets.

These startups are largely powered by the collection and analysis of data on consumer behavior, which has the effect of democratizing market entry, allowing even family retailers to thrive in a digital landscape.

Their emergence underlines a modified landscape.

Established alcohol retailers have found themselves competing with more players and in more channels than in the past. In recent months, for example, Uber purchased alcohol delivery service drizzle in a $ 1.1 billion contract; app-based wine market Vivino closed a $ 155 million round of Series D financing; and 7 eleven in partnership with the application Mini bar for beer and wine deliveries from hundreds of its convenience stores.

Driven by Data: Helping Family Retailers Thrive in a Digital Landscape

Now, third-party platforms are helping liquor merchants navigate this new playing field with e-commerce and digital advertising solutions based on customer data.

“The most important thing for retail businesses is to own the customer,” Roi Kliper, co-founder and CEO of City beehive, said CO—. His company provides physical wine and spirits merchants with digital tools to help maximize omnichannel sales, including assistance with inventory management, e-commerce storefronts and applications, loyalty and rewards programs, and possibly more importantly, access to historical customer data. The customer database, he says, is what helps liquor dealers “make their business sustainable.”

Wine lover, which started as a family wine accessories catalog in 1979, has grown into a multi-channel media company. Its content-meets-commerce model now includes webinars and purchasable content.

Business intelligence on consumer trends provided by its community of wine lovers not only informs a comprehensive wine buying guide, but is especially valuable for liquor merchants at a time when merchants face regulations. increasingly stringent when it comes to digital privacy, said Jacqueline Strum, president of Wine Enthusiast’s media. division.

“We have first party data which is huge for the media side of the business because there are so many sites where they just use retargeting and cookies and tag your IP,” she said. co-.

Related: How the pandemic has helped brands like Moët Hennessy unlock new sources of revenue

Promote the discovery of wines and spirits on an online marketplace

A key goal in the move from wine and alcohol to e-commerce is to facilitate discovery in a digital landscape, sources said.

“People [have gotten] accustomed to intermediate technology in the purchasing process, ”explains Provance from 3×3. “But that also had the effect of removing the discovery.” The result, he adds, is that many consumers tend to look to brands they already recognize.

“We started to think of our business model as purely a dataset,” Provance said. “But as we built our network, we started to realize that what brands and retailers wanted wasn’t just data analytics, they wanted us to do something with it to help them market themselves and drive traffic from buyers to stores. Now, 3×3 uses this data to refine consumer profiles and develop sophisticated targeting for new product marketing.

For liquor merchants, the marketing math has changed, as buying wine is akin to buying household items from a retailer like Amazon, Wine Enthusiast’s Strum said: Many consumers start with a simple Google search and read them. notice before you finally make a purchase.

Wine Enthusiast, for its part, uses its mix of content and commerce to act both as a trusted source for customer referrals, as well as a valuable partner for its advertising affiliates.

“Media companies, including ours, are really starting to do some of this research for consumers,” she said. “With e-commerce moving so far into the future, now [advertising clients] come see us for marketing up and down the funnel.

Related: E-Commerce Investments Generate Big Gains For Small Businesses During Pandemic

Standardize wine and spirits e-commerce

The pandemic has caused long-term changes in consumer culture as a whole. And the growth in online alcohol sales reflects this shift in consumer behavior around e-commerce, online discovery, and home delivery.

This change has brought the category of wines and spirits into a new era of expectations in terms of product assortment and accessibility. However, at the end of the day, “the big changes that are happening in this industry are not about alcohol,” Provance said. “They are about the way people interact.”

CO— aims to inspire you with the greatest and most respected experts. However, before making any business decisions, you should consult a professional who can advise you based on your personal situation.



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