Pandemic boom or bust: The future of online alcohol sales

Online alcohol sales skyrocketed during the lockdown period as bars shut down, leaving retail as consumers only source for alcoholic beverages. Many consumers used online alcohol/grocery delivery or click-and-collect services for the first time in order to avoid shopping in stores. Nearly half of consumers who purchased alcohol online in the past 12 months say they shop online in order to avoid in-person shopping due to concerns around the coronavirus.

While online alcohol sales enjoyed unexpected growth, online alcohol retailers will need to focus on retaining customers, many of whom will return to brick-and-mortar stores once fears of the virus fades.

Grocery retailers will be the leaders of the online alcohol market

Consumers primarily purchase alcohol at supermarkets or mass merchandisers along with their groceries. Kroger, Amazon Fresh, and Walmart+ will become the dominant players in the online alcohol market with immediate delivery services such as Drizly used for only certain occasions. Nearly half of online alcohol purchasers have ordered alcohol from a supermarket website/app compared to a third who have ordered from an immediate delivery service (eg, Drizly, Minibar).

Alcohol retailers and brands adjust to new consumer behaviors

Alcohol is inherently associated with social occasions: group parties, special celebrations, dinner gatherings, etc – all occasions that have been limited because of the pandemic. Alcohol brands and retailers must pivot and market to the small social occasions or online social occasions consumers are engaging in during the pandemic. Online alcohol can step in and satisfy these occasions, marketing themselves as a convenient and safe way to source alcohol for consumers’ new pandemic social behaviors such as Zoom happy hours, online gaming sessions, small backyard BBQs and more.

For example, Samuel Adams and Auntie Anne’s released a home Oktoberfest kit containing Samuel Adams OctoberFest, a make-your-own pretzel kit, steins, festive decorations, and more.

Online retailers will struggle to retain customers

Gains in the online alcohol market may be short-lived. Alcohol sales historically slow during recessions and as fears of the virus fade many consumers will return to shopping in-stores as a way to avoid the fees associated with alcohol delivery (though some will undoubtedly remain online customers after discovering the convenience of online alcohol/grocery shopping). Nearly half of consumers who describe their financial situation as “healthy” say they would not purchase alcohol online because they don’t want to pay additional fees.

Deliver consumers unique experiences

Online shopping is all about offering consumers convenience but online alcohol retailers can differentiate themselves by appealing to consumers’ interest in experiences especially during a time when more consumers are drinking at home. Retailers can use past purchasing data to provide consumers with targeted product recommendations. Over half of consumers aged 22+ who drink alcohol say they are interested in receiving personalized recommendations when shopping for alcohol online.

Make alcohol packaging more ecomm-friendly

The rise of online alcohol shopping presents alcohol brands with the opportunity to create ecomm-friendly packaging solutions. Glass wine and spirit bottles, while associated with premium and familiarity, are not ideal for direct-to-consumer (DTC) shipping. New innovations in paper bottles (both Diageo and Pernod Ricard are either launching or piloting spirits in paper bottle packaging) and even rPET bottle packaging solves issues with DTC alcohol shipping, though brands need to communicate to consumers why glass-alternative packaging is sustainable, as consumers are largely unaware of the advantages and disadvantages of different packaging materials.

For a comprehensive look at online alcohol, check out Evolving eCommerce: Alcoholic Beverages: Incl Impact of COVID-19 – US, October 2020.