By Wayne Duan, Vice President, eCommerce
I was watching “Jurassic Park” the other night… didn’t see that intro coming from a blog on eCommerce, did you? Bear with me for a second here.
Anyway, I started reflecting – which I’m sure we have all been doing our fair share of lately – once more on the situation our world finds itself in as a result of this tragic and unprecedented COVID-19 pandemic following Jeff Goldblum’s (or his character, Dr. Malcolm’s) famous “life finds a way” line.
Around the world, we’re finding a way. All of us are.
We’re finding new ways to virtually connect with loved ones, to balance our children and families with work, to entertain ourselves (some of us by re-watching Jurassic Park), to piece together workouts. The list goes on.
While not at the top of the list, if you keep scrolling down, consumers just like you and I are also finding a way to enjoy and purchase our favorite brands during this stay-at-home environment.
For beverage alcohol, it has thrust eCommerce and digital-led behaviors into the spotlight.
To provide some perspective on the fast-happening shift, on Friday, May 1st – an ordinary and normal Friday… as normal as Fridays can be these days, I suppose – Constellation Brands’ sales on Drizly were +453% from Super Bowl weekend and +479% from New Year’s. Data from virtually all online beverage alcohol retailers and marketplaces display a similar pattern.
While 3-tier eCommerce has represented an emerging opportunity for our category for the last few years, the COVID-19 pandemic has brought that future forward, faster. And with it, comes a learning curve for our retailer partners working to navigate and leverage this route to market. It also calls for consumers to become more comfortable with online capabilities and services.
Our Digital Shopper-First Shelf has become an increasingly relevant resource that can help alleviate some of those pain points. This resource, found below, provides a high-level roadmap for retailers embarking on their eCommerce journey – from advice on forming a strategy, to providing a sampling of key insights and actions that can be taken today.
At Constellation, we’ve invested heavily in developing organizational muscle in eCommerce for the last several years, as we’ve seen online sales surge for categories like beauty, clothing, electronics and more. Here, we’re a consumer-led organization. It’s our mission to constantly assess and anticipate where the consumer is headed next, and develop impactful brands, experiences and capabilities that deliver on those future desires.
Beverage alcohol has lagged in comparison to other categories in shifting online. Why? Our research shows the most significant barrier has been lack of awareness. In fact, 65% of shoppers who purchased groceries online (in states where it was legal to buy beverage alcohol online) said they were not aware purchasing alcohol online was even an option.
Will there be a dip in beverage alcohol eCommerce sales once we’re finally able to resume a sense of normalcy? Maybe. But coming out of this, a much larger pool of digitally-engaged consumers choosing not to shop the category online will be doing so out of choice, not lack of awareness. And knowing what today’s consumers value, the power of convenience will likely continue to influence shopping behavior.
However, it’s important to know that eCommerce has benefits that extend beyond online sales, as retailers’ digital presence also drives in-store purchases. According to a recent Forrester study, 26% of Food & Beverage sales are estimated to be digitally influenced. Meaning, shoppers’ in-store purchases are shaped by the retailer’s and brand’s digital presence, be it their website or social media accounts—whether they’re preparing a shopping list or already in-store researching product information on their mobile devices.
Through our years of learning in this space and leveraging our total beverage alcohol perspective to provide a truly holistic and brand-agnostic analysis of the category, we have the expertise to help our partners assess where there’s room for improvement, and the resources to help jumpstart efforts. For example, we’ve developed a thesaurus of the most common typos when searching the category online that can be ingested into a retailer’s search engine (For instance, “tequila” is very often misspelled with a “K”… apparently). We have digital asset toolkits, which are a digitization of our exciting retail programs, allowing consumers to enjoy a similar shopping experience online as they would in-store.
Building out eCommerce capabilities can not only help our partners withstand these trying times and drive additional in-store purchases as we push forward, but also positions us for mutual, long-term success by investing ahead of this impending and permanent consumer shift.
I think this quote from futurist Roy Amara applies well to beverage alcohol eCommerce today, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”
This isn’t just about investing for today. The consumer holds the keys. And they’re showing us, with their wallets, where they’re going.
We’re here to help. And together, we will continue to find a way!