Today, eCommerce has touched almost every sector, be it beauty, health, or fashion. However, relative to others, there is an industry that hasn’t found much space or you can say sales on the online stores and that is ‘Alcohol’.
Perhaps, the main reason behind the suppression of alcohol eCommerce is the three-tier system, which was implemented during prohibition. The concept was created to make it harder to buy and sell alcohol. It requires alcohol manufacturers to sell to wholesale distributors, who act as the intermediary for producers and retailers, with retailers being the only ones who can sell directly to consumers.
Above all, there are n number of rules and regulations that are bound to be followed by alcohol producers. This can certainly make it difficult to navigate the DTC ecosystem. Not only that, the producer must get hold of certain permits along with having tax and compliance obligations. These restrictions and requirements fluctuate from state to state, making it extremely difficult to manage when shipping alcohol across state lines.
All these reasons may have prevented the alcohol industry from embracing eCommerce to its full potential, but things are about to change.
The Pandemic Changed Things!
The pandemic made quick changes necessary. Lockdowns kept customers at home, forcing many traditional brick-and-mortar shops to close, which certainly increased demand for eCommerce.
States started easing their restrictions in the alcohol DTC area to assist struggling companies and make it easier for consumers’ demands to be dealt with. During the outbreak, Colorado and Massachusetts permitted in-state breweries to sell their products directly to consumers, and Virginia let in-state distilleries do the same intending to encourage more online purchases. And it worked: in 2020, 44% of customers purchased alcohol online for the first time.
Opportunity Triggers
In addition to pandemic-era shifts, something else also aided transformation. Yes, the creation of foundational technology by fast-moving internet businesses made it easier to handle and administer interstate alcohol e-commerce purchases. This type of technology is rapidly gaining grip, which means that manufacturers of all sizes, as well as retailers, are set to reap the benefits that other industries have seen as a result of shifting a significant portion of their business online.
Alcohol brands can now finally take advantage of the new channels that eCommerce has opened up for them to reach their customers in a personalized and customized way. With the use of back-end data and strategic implementation of technology, brands can ultimately provide consumers with an eCommerce experience that is on par with what they would get in-store, and as a result, they can experience exponential growth.
Seeing all the changes and as per the analysis report by IWSR Drinks Market, eCommerce alcohol sales in 16 markets are expected to reach almost US$40 billion by 2026.
Finally, people can booze their way, thanks to Alcohol eCommerce!
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