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Is The Online Alcohol Sales Boom Here To Stay?

Is The Online Alcohol Sales Boom Here To Stay?

The Covid-19 pandemic brought the widespread adoption of eCommerce to unprecedented levels as consumers stayed home and shopped online. With more people shopping online, legacy beverage brands have had to shift to digital marketing strategies to reach consumers.

To understand the impact this digital shift has had on beverage sales, I spoke with Girish Ramachandra, CEO and Co-founder of Shopalyst, the AI-driven Discovery Commerce platform optimizing digital advertising for marketers worldwide. Shopalyst has the unique distinction of powering over one billion ad-activated shopping trips for 400+ brands in 30 countries.

Gary Drenik: Alcohol sales saw triple-digit growth in online retail sales with a 234% jump since the start of the pandemic. From the data gathered, what can you predict about the trends impacting eCommerce sales for beverage brands in 2021?

Girish Ramachandra: Given the rapid rise of eCommerce last year—McKinsey & Company reported that the segment saw more growth in the first quarter of 2020 than it had in the previous decade combined—we can expect growth across all categories to continue this year. Alcohol is no exception. Shopalyst works with the world’s top beverage companies and has seen a significant rise in digital activations over the past year, and our platform’s data indicates a surge in ad-activated shopping missions – particularly for alcoholic beverages.

Although many Americans miss drinking in their favorite bars and restaurants, consumers have become used to ordering alcohol online for home consumption. According to a recent Prosper Insights & Analytics Survey, ~24% more of adults adopted online shopping since the start of the pandemic. Beverage brands have responded creatively to this trend. For example, PepsiCo. transformed the campaign for its new mango-flavored cola into a personal ad for ‘singles seeking dates.’ Many brands are expected to use similar social media tactics to drive sales as consumer behavior continues to shift during the pandemic.

Drenik: With shelter-in-place orders preventing in-person shopping, what types of solutions are beverage companies utilizing to continue selling to their customers and meeting demand?

Ramachandra: Alcohol ad spend in 2020 grew steadily throughout the year, outpacing the average of most industries. Facebook, Instagram, Google search, and YouTube are the leading platforms where alcohol brands spend their marketing dollars. They also allocate ad spend to other channels including display ads, Pinterest, Snapchat, TikTok, and regional OTT video platforms. Brands must be creative when marketing to consumers searching and scrolling. For example, Jameson Irish Whiskey recently encouraged people to take PTO for St. Patrick’s Day with the chance to win money.

Beyond creative marketing, brands should include eCommerce platforms in their strategies. 2020 was a huge year for alcohol eCommerce marketplaces Minibar Delivery, which saw a 139% increase in sales from March to April, and Drizly, which Uber acquired for $1.1 billion and enjoyed a sales boost of 750% from March to May. Customers buying more beverages through these channels, and brands should create strategic partnerships with them for increased visibility.

Drenik: Smaller, D2C beverage brands have found success bypassing standard regulations that legacy alcohol makers have adhered to for years. How can legacy beverage brands catch up to D2C brands selling online?

Ramachandra: The key lesson of 2020 for heritage brands is that digital avenues should be front and center for both advertising and commerce. Several legacy brands already effectively sell online – including six of the top 10 global alcohol beverage companies that utilize Shopalyst for Discovery Commerce. Alcohol companies quickly pivoted their marketing last March to encourage people to drink at home. Top performers on social media included Absolut, Jägermeister, and Jack Daniel’s, which all shared recipes and lifestyle content to millions of followers. Given that social media users are up to five times more likely to have ordered alcohol online, these efforts lead to increased sales.

Drenik: How are CPG and beverage brands adapting their marketing and advertising strategies to take advantage of the accelerated shift to eCommerce?

Ramachandra: CPG and beverage brands need optimized creative content, personalization, and shoppable experiences to maximize value to digital consumers. In a post-pandemic world, consumers expect digital experiential commerce to be a better alternative to shopping offline. It could be a QR code on the bottle that leads to related cocktail recipes, or a food blogger creating shoppable IG stories to help consumers discover and buy products they love. Digitally native alcohol brand Haus has focused their digital strategy on incorporating Instagram influencers whose behavior–when put in social, boozy situations – significantly influences their audience. They also feature ingredients and suggested recipes across their website to establish personalization. On Shopalyst, top alcohol brands activate content like recipes, health, fitness, nutritional tips, and influencer marketing. These features integrate within customers’ lifestyles and feel less like traditional advertising.

To turn browsing into actual buying, brands must cut through the clutter by utilizing precision targeting, good timing, and the best creatives to craft a brand experience. Many brands have already broken through crowded markets by using Shopalyst to deploy hyper-personalized, shoppable experiences activated from their digital ads.

Drenik: In what ways has the shift to selling across social platforms like TikTok, Instagram, Facebook, etc. impacted legacy beverage brands who have seen successes in the brick-and-mortar world?

Ramachandra: With consumers spending more time online, heritage brands are shifting their advertising dollars online while experiencing a boost in digital channels. Prosper noted that overall alcohol spending online saw a growth of +4% between March and October of 2020. With platforms like Shopalyst, brands can merge their advertising and commerce efforts making instant shopping available on all their digital touchpoints with consumers.

Drenik: Do you foresee social commerce continuing to thrive after the pandemic is over?

Ramachandra: Absolutely! This trend will likely stay long after the pandemic. The convenience of shopping online will be a habit that consumers will continue to crave, and as these trends continue, everything online will become shoppable. Product discovery will no longer be limited to traditional advertising as shoppable video ads allow brands to own the shopping experience. YouTube’s BrandConnect campaign that relies on shoppable video ads have helped legacy retailers see a 200% increase in Google search results and several products sold out. Click-and-buy has already become a huge success for platforms like Instagram, where products are directly shoppable through tags on users’ stories, and brands should prioritize leveraging these platforms to reach consumers.

Social media usage continued to spike in 2020, and solutions like ours help brands serve content in a way that drives sales while engaging customers. In fact, brands using Shopalyst see a 3X increase in targeting relevance, a 5X increase in audience attention and engagement, and 8X increase in ad-activated shopping trips.

Drenik: Thanks, Girish, for your insights on how brands and their digital marketing strategies are evolving in 2021 and beyond.

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