ecommerce drinks industry

2020: Online sales' record year

04 January, 2021

Ecommerce has broken into markets that barely knew it existed pre-pandemic - and forcasts for the alcohholic drinks sector are very positive. Martin Green reports.

American shoppers spent a record-breaking $10.8bn at ecommerce stores on Cyber Monday 2020, according to Adobe Analytics. That represented a 15.1% increase on the same day in 2019, and set a new record for the largest US online shopping day in history. It capped a phenomenal five day period for online retailers. The ecommerce channel rang up $5.1bn in sales on Thanksgiving Day after retailers targeted bargain hunters with early promotional activities. Online sales then increased 21.5% year on year to reach $9bn on Black Friday, while they also soared on Small Business Saturday and a record-breaking Sunday. The channel is growing increasingly sophisticated. Retailers have significantly bolstered their warehousing and logistical capabilities to handle the huge shift to ecommerce seen during the pandemic. They have also ramped up services such as same-day pick-up to encourage online shopping without the margin-busting delivery costs. Adobe now estimates that online sales will reach $184bn for the entire holiday season, a 30% year-on-year increase. Cyber Monday began life as an American phenomenon, but it has spread across the globe. Salesforce estimated that online sales reached $46bn worldwide on Cyber Monday. The drinks industry has seized upon the trend, and online sales are soaring, even in markets where it historically struggled to gain any traction.

“In France, online sales were nothing,” says Pierre-Jean Sauvion, president of the Communication Commission at Loire Valley Wines. “People thought buying wine on the internet involved sending the producer an email and asking for some bottles. People are now starting to buy wine through the internet, so it’s now going to be a real channel for the French market.”

Mature markets such as China and the UK have also seen online sales accelerate significantly this year. UK online grocery sales increased 108% in the four weeks to November 28, according to Nielsen, and it highlighted alcoholic drinks as a star performer. Ecommerce specialists such as Master of Malt, The Whisky Exchange and The Wine Society are thriving, while the major grocers are all seeing sales shoot up. David Haworth, managing director of Pernod Ricard UK, says the firm aimed to sell 15% of its spirits and wines through ecommerce channels by 2023. It passed that milestone earlier this year due to the changes in consumer spending habits caused by the Covid-19 pandemic.

“A lot of people now have signed up to Amazon Prime and are ordering with Ocado, and the multiple grocers are pushing it,” says Haworth. “People have grown used to getting home deliveries. You can get it within the hour. The competition taking place online has gone a bit crazy, so I think that will continue to increase its share of the market. “The offering that is required will evolve over time and we’ll have to work closely with these guys to make sure we have got the right offerings. Smaller guys like Majestic and The Whisky Exchange are doing very well out of this. Clearly the consumer has got used to it, so why would you go back to the old ways of pre Covid? I think it’s here to stay.”





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