The convenience of D2C is massively appealing to alcohol customers, particularly those with consistent consumption habits who know exactly how they like their cabinet stocked. This has led to a rise in subscription-based sales, as well as curated product bundles that bring an element of discovery to the customer experience.
Of course, brands cannot rely on every customer to keep up with their purchasing frequency in these testing economic times. We’ve seen more and more agile alcohol producers packaging up eye-catching incentives to keep customers loyal in recent months, through discounts, bulk buys and other promotions – something that’s far easier to achieve via D2C where brands aren’t forced to pay any commission to third-party marketplaces.
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Key factors to take into consideration include storing products in zero waste warehouses, taking a plastic-free approach to packing, a paperless approach to picking and offering greener shipping services – for example, by using hybrid and electric vehicles and route optimisation software – to ensure deliveries are as carbon efficient as possible.
It’s important to remember that the sustainability ethos extends to people working in fulfilment too. Many warehouse roles are incredibly physically demanding, repetitive and involve employees walking long distances to locate products, all while being timed and monitored, which can lead to intense stress and strain. This is why brands need to choose fulfilment partners that treat their people well, for example by taking health and safety seriously, operating flexible hours and encouraging regular breaks.
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3 From consumer research by drinks market analysis firm IWSR.
Increased diversification as category boundaries blur
People are switching between beverage options with increased frequency, as well as showing greater willingness to try completely new types of drinks – from hard seltzers to craft beers and canned cocktails (4). In fact, almost one-third (30%) of alcohol brands said they plan to launch exploratory products in the next two years to capitalise on the growing appetite for experimentation and unconventional new taste sensations (5).
With loyalty no longer such a safe bet, brands need to step up their innovation credentials to retain their place in such a jostling and vibrant category. Logistically, however, this means many more SKUs to manage and keep track of, more potential for confusion and delays to creep into the picking and packing process, and of course, the possibility of frustrating customers if problems occur once the order has been placed.
Capable warehouse management systems are essential if these issues are to be avoided. It’s not about haphazardly piling products up to the rafters in vast warehouses, but more about using smaller, self-contained hubs to easily store and manage multiple SKUs, all belonging to one brand, all in one accessible space.
4 According to IWSR research.
5 From Global Drinks Intel research.
A balancing act between luxury and discount products
People may be watching their wallets, but this doesn’t mean they are immune to special occasions, or to treating themselves. The premium alcohol category has performed strongly over the past few years, echoing similar lifts in wellbeing and health-focused products, where discerning consumers have shown a willingness to pay extra for better quality goods.
During the pandemic, many drinkers sought to create ‘affordable luxury’ experiences in their own homes, spending more on spirits and sparkling wines, in particular, to welcome in the weekend. In fact, home mixology continues to grow from strength to strength, driven by the FOMO and excitement of Instagram and TikTok cocktail-making content, a major reason why premium spirits are forecast to increase their global market share to 13% in 2024 (6).
However, consumers have limited resources to spend on non-essentials, so outside of these luxury consumption moments, they’re proving perfectly content to purchase discount brands for everyday indulgence – creating opportunities for more affordable market entrants and challenging everyone priced in the middle of the category to do more to differentiate their offering.
Whatever the price of your product, and whether you’re selling premium spirits or low-alcohol sparkling wine, your fulfilment needs to be treated with the same care, accuracy and attention, ensuring that every customer is left satisfied with the online purchasing experience, as well as the drink in their glass.
6 According to IWSR research.
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