Member Perspective: The Rise of BevAlc E-Commerce

What an extraordinary and chaotic time to be in the beverage-alcohol (BevAlc) e-commerce space. The emerging channel had already been growing before it boomed last year and experienced nine months of sales acceleration that surpassed the previous five years. 

For BevAlc e-commerce, 2020 will be earmarked as the biggest year transforming an entire industry driven by consumer demand. According to IWSR (U.K.-based International Wines and Spirits Record), the U.S. market is forecasted to become the world’s largest BevAlc e-commerce market by the end of 2021. 

The rapid growth from the past year has landed us in a dynamic landscape. Here is a summary of the environment that BevAlc retailers, distributors and suppliers are all navigating: 

• Online BevAlc sales have grown to $5.6 billion and are forecasted for more growth, according to IWSR.
• Millennials, Gen X and Boomers are all omnichannel shoppers.
• 44% of BevAlc shoppers began buying alcohol online in 2020 and are planning to continue, according to IWSR.
• 50% of all alcohol purchases from both the physical and digital shelf will begin online, IWSR says.
• Retailers have omnichannel infrastructures that include more than 7,000 locations for pickup and more than 1,500 retailers for one-hour delivery.
• National, regional and independent retailers invest significantly to streamline operations and elevate shopper experience.
• Mergers and acquisitions, as well as partnerships between tech companies and retailers, have expanded service offerings and consumer reach.
• State legislation continues to be complex as well as dynamic, impacting fulfillment capabilities and national campaigns.

To leverage the e-commerce opportunity, there is continued transformation across the entire industry, including internal change management, new team structures, cross-functional collaboration, content strategy, retail media inclusion and omnichannel planning, just to name a few. 

Although the list of requirements to compete in this space can be daunting, it’s good to begin with the basics, track learnings and then expand. Consider the following four areas as you build a solid foundation to launch into e-commerce: 

1. Develop an e-commerce strategy for short- and long-term goals for sales and marketing.
2. Create content that drives consumer conversion and makes them accessible to distributors and retailers.
3. Integrate ways of working with internal marketing, digital and sales teams.
4. Secure data insights to track and measure initiatives.

As companies build on the current momentum, the next phase of strong growth will require moving beyond the basics to elevating the consumer experience and streamlining physical and digital touchpoints. In discussions with colleagues across the industry, it is apparent that companies are at different stages on their e-commerce transformation journey. This creates a unique opportunity for the BevAlc industry to tackle certain challenges together. 

I believe that “a rising tide lifts all boats,” and this next phase of e-commerce growth will be stronger if BevAlc retailers, distributors and suppliers work together. 

It is exciting that the Path to Purchase Institute recognizes the need to develop learning and discussion forums specific to the BevAlc industry. The newly created BevAlc Commerce Initiative (BACi) will launch this fall, and with it an extraordinary opportunity for all our organizations and brands to rise together with the most dynamic channel in our industry.