Artisan Spirit: Fall 2020

Page 62

Only a Click Away

E -Commerce Solutions as Direct Shipping Alternatives for Spirits Brands


f COVID-19 has shown us anything it’s that receiving alcohol at your doorstep without going to the store is more important than ever. While it’s no secret that direct-to-consumer (DTC) shipping has proven to be a boon for the alcohol industry, namely wineries, spirits brands continue to face daunting legal and regulatory restrictions. Except for a handful of states, spirits brands must still sell their product through the three-tier distribution system and are currently limited when it comes to selling direct, unless the consumer is physically present at the distillery. However, distilleries do have options.

The Quasi Direct-to-Consumer Shipping Approach A growing number of spirits brands have decided to play the cards they were dealt and make the most of the resources available to them, while conducting business in a compliant manner, by turning to third party marketing companies for alternatives to getting products into consumers’ hands. Most of us are familiar with some of the various online platforms that sell alcohol. There are local on-demand models like Saucey and Instacart, where consumers can order alcohol at the click of a button, which is then delivered by a local retailer within the hour. There are also marketplace platforms, such as Cask Cartel or Spirit Hub, which usually offer a curated selection of craft or specialty spirits sourced from a national network of retailers or local distillers who may legally deliver or ship into the purchaser’s state. Although these platforms are not truly “direct-to-consumer” since the sales must be made through the three-tier system, consumers have responded favorably to the convenience and accessibility afforded to them when making purchases.

The Embedded Shopping Cart In addition to the use of third-party platforms to advertise alcoholic beverage products, some spirits brands have been making the shift toward marketing strategies that bring them closer to their customers. The benefits of this greater customer intimacy include a tailored marketing and advertising experience, as well as a greater adaptation of products to customer needs resulting in higher customer loyalty levels. Adi Pal, founder and CEO of Mash & Grape, which started off as an online marketplace selling a variety of curated craft spirits, said he created the marketplace to “cut through the noise and introduce people to a burgeoning collection of spirits,” which he sourced through a national network of retailers and craft distillers. In addition to sales made on the 62


platform, brands advertised would just link to the marketplace in the “Where to Purchase” section on their websites. But, over time, as brand sophistication increased, there became a demand from the suppliers using the platform to also sell online, or at least give the appearance of selling online, directly from the supplier’s own website, much like other marketing platforms were doing at the time. “Think about it,” saidPal. “When you are shopping and you see a Gucci advertisement, it’s a different feeling than when you see an advertisement from a retailer or Ebay selling Gucci.” By taking a snippet of code, Pal created a “Purchase Now” shopping cart widget and Barcart, an e-commerce service, was born. “It was a no brainer,” said Pal. “We stumbled upon a service and experience that brands loved and although Mash & Grape was created for us, Barcart was a service that was created organically based on feedback from the brands we work with.” The checkout widget allowed brands to copy and paste a customizable code directly into their existing webpage, which powers a checkout button enabling e-commerce sales through the supplier’s existing distribution networks across the U.S. The adaptation resulted in checkout conversion rates leaping to approximately four times what they were prior to installation of the widget. Even though most spirits brands are limited in DTC, there is arguably still an advantage in the quasi DTC approach. Barcart and other similar e-commerce platforms facilitate sales from a supplier’s existing website so that the brand can maintain full control over the user experience, marketing presentation, and data collection. In most cases, no one can represent a brand better than the brand itself, so being able to market directly to the consumer is desirable. Of course, the use of a shopping cart embedded in a brand’s website will not magically generate an influx of sales. As Pal stated, “In order to drive traffic to a supplier’s website, you need targeted marketing efforts.” In the example of Barcart, traffic is driven to the brand’s website, either organically or through additional marketing efforts, which drives sales from the purchase widget. Then the brand’s products are listed on the marketplace, so orders are coming from both sources. A dashboard allows users to view detailed sales statistics, such as top selling products, location of sales, and the channels through which sales are made. From the brand’s dashboard statistics, users are able to determine which channel generates more sales. A critical factor in selecting any marketing platform is the availability of data and the extent to which that data is informative. WWW.ART ISANSPI RI TMAG.CO M

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