Thinking outside the (cardboard) box
Our Research and Insights Lead Neil shares some thoughts on how drinks and luxury brands can respond to increased (again) demand for online fulfilment and customer service.
Why alcohol eCommerce needs to re-imagine customer experience post-COVID.
The numbers are in. To no one’s surprise eCommerce spiked massively during lockdown. Here in the UK, there’s been a 10% increase (from 20% up to 30%) in internet sales as a percentage of total retail sales. As well, as reported by Ofcom and Kantar many shoppers (particularly older ones) were using eCommerce for the first time - and have said they’ll stick with it post lockdown. Off-licence sales of alcohol soared 31.4% in volume terms according to the ONS.
Customer demand wasn’t the only reason for this shift, it was also supplier necessity. Stores and brands had to sell through eCommerce because they were shut. They had to adapt to survive. Local off-licenses across the UK spun up or enhanced their delivery propositions during the coronavirus for instance.
But we’re now moving into a time where it’s no longer about necessity. There are millions of potential new eCommerce customers for alcohol brands. They may have been forced to shop online but are now keen to continue buying this way. Good customer experience will drive loyalty. How can you make the most of this opportunity?
It’s a crowded market at the bottom. Don’t think you’ll be millionaires this time next year. Local product for local people.
It’s a lot easier to set up a shop online now. SquareSpace (site), Shopify (store) and Stripe (payment) are just three of the ways you can get up and running. Unfortunately so can everyone else. However, they can’t beat you in local fulfilment. I ordered some wine from a local vendor at 9 am one Friday morning under lockdown (not for office hours consumption of course). It arrived at 11:30 the same day. Even Amazon Prime can’t offer that - well, not outside the limited Prime Now service anyway. Distinct products from local stores available very quickly are something currently unbeatable - and something brands should support given the positive customer experience.
In many niches, Amazon still faces considerable competition from specialists.
Amazon’s coverage is incredibly broad, but often it's not deep. OK, there is Marketplace, but often it’s better getting the product directly from the vendors than through Amazon. For instance, wine merchants Berry Brothers and Rudd, are available on Amazon but only a small part of their selection is there. You also lose their mailing list, their content and their excellent customer experience. Shipping from Marketplace vendors can also often be expensive and slow - there’s often no Prime shipping options in the Marketplace.
So while in books and some other niches, Amazon offers near infinite choice and rapid delivery, elsewhere that’s not true. Masters of Malt, Royal Mile Whiskies, Beers of Europe and many more have beaten the Bezos behemoth. The specialist can still triumph.
Luxury experience in eCommerce remains problematic
If you’re selling a premium product but with a basic online buying experience, that’s a problem. In the world of eCommerce, Hermes is not a luxury brand. It’s surprising to see just how many luxury brands fall into this trap - where all you end up with is a product in a cardboard box, regardless of whether you're spending £20 on blended whisky or £5,000 on sake. Luxury is about more than just the product - it’s the experience. What this luxury experience needs is a re-imagining for eCommerce.
This is hard. If you’re a global luxury brand, spinning up a global logistics business that supports your values and brand isn’t a small task. You can work with partners, but even there, guaranteeing a luxury experience consistently in every market isn’t easy. Supply chains are hard - fashion brands have struggled with this for years in clothing production. Delivery adds even more complexity.
To us though, at the top end of the market, it does mean thinking less about the store (mostly everyone seems to have nice websites these days) and more about the shipping. It’s hard but it’s an important part of customer experience still left to elevate. We don’t know if it means your own fleet of vans - or uniformed drivers. But everything you can do in this part of the experience will stand out.
This need not be founding your own supply chain. Start with the simple question, “What touches can you do to make the shipping experience yours?” To give a few examples…
Molton Brown replicate the free samples they place in your bag when buying in their stores with free samples
to choose from at (online) checkout.
Mikkeller brand everything in their packaging with the same iconic Keith Shore illustrations. If you’re a fan, you’ll collect and get value out of that as much as you collect their beer and other drinks.
Harrods delivery service is over 100 years old but still delivers an iconic experience, albeit one that’s local to West London. If you’re connected to a particular place, perhaps you don’t need to reinvent global eCommerce, just create something special that tells your story in the place that’s part of your identity.
There’s a lot to think about here and we don’t have all the answers. But we’ll be keeping an eye out and working with our clients to figure it out. Drop us a line if you’d like us to do the same.