Why is Online Alcohol Sales still an Untapped Business Opportunity?

• Published Month : Monday, 24 Feb 2020 06:00 pm

2019 has been the year filled with innovation, especially in retail. Starting from robot delivery services to experiential pop-ups, it might seem to businesses as if they have mastered their understanding of consumer behavior as well as created products & services that can meet those requirements. On the other hand, there is a category that yet requires to make a forward leap: beverage alcohol. Also, it is causing the industry’s billions in lost sales opportunities every single year. 

The Online Beverage Alcohol Delivery Industry is ready for innovation

To have a better understanding the untapped opportunity that beverage alcohol presents, it is important to have a look at the industry’s history, how it has led towards the current state. Following Prohibition along with rescind of 18th amendment in the year 1933, the US had created a 3-tier system channelizing the distribution of alcohol via distributors, producers as well as retailers.

Unlike other categories of product where the process of distribution has fairly been streamlined, alcohol brings has its own set of complexities that include both at federal as well as state level. Furthermore, navigating the traditional 3-tier system in this era of e-commerce has proven to be very difficult. Thus, while populaces continue purchasing alcohol from the liquor, grocery & convenience stores, alcohol’s online wallet’s share has fallen by nearly 88 percent, just owing to the lack of awareness among people.  

For instance, even Amazon has not yet been able to crack the roadway towards alcohol e-commerce. The organization that had to depart their online alcohol sales subsequent to their acquisition of Whole Foods.

Unlike several other products wine alone has a market size of more than $70 billion with less than 1 percent e-commerce involvement that is indicative of a massive untapped opportunity for the businesses. Therefore, online sales of alcohol can prove out as a boom to the industry in coming years.

However, getting in-store to online will definitely necessitate an intensive amount of investment in technology in order to aid the logistics of distribution over a nationwide scale.

In a nutshell, 2019 had seen intensifying pressure for the retailers competing in an era of Amazon along with alcohol offering an entry-point for a competitive gain. Some of the players have already entered the landscape of online sales, for instance:

• Costco has announced alcohol delivery from across 200 club stores.
• Aldi had expanded online alcohol delivery through Instacart
• Walmart announced curbside alcohol pickup for customers.

Over and above anything else, the amplified investment followed by the activity legitimized the opportunity that subsists and will certainly start a rivalry amongst retailers in order to win the online alcohol sales business, both in-store as well as online.