Can bev-alc suppliers really leverage the growth the of on-demand delivery? Read until the end to see how you can.
The Missing Puzzle Piece in Liquor E-Commerce
Speed of delivery is the key to unlocking direct sales success.
A Tale of Missed Opportunity: Sarah's Experience with Online Liquor Shopping 🛒 🍾
Consider Sarah, a typical consumer navigating the digital marketplace. One Sunday afternoon, while perusing social media, she finds an ad for her favorite tequila brand. Clicking through to the brand's website, she anticipates enjoying her preferred drink by evening. However, at checkout, she's informed of a 5-7 day delivery period, dampening her excitement and pushing her towards alternative services like Drizly, offering same-day delivery. This scenario, common in the liquor e-commerce sector, illustrates a disconnect between effective marketing and fulfillment capabilities, leading to cart abandonment and loss of potential long-term engagement.
So, what should Suppliers do about this… Can they set up their own Delivery Programs? 🚚
Well.. actually…yes, suppliers can provide direct delivery services. That may be counterintuitive since we’re so used to this idea of Alcohol brands not being able to transact with end-consumers on alcohol products, but there’s nothing in the law that says that alcohol companies can’t sell shipping to consumers. Weird, right? Obviously, writing the 3-tier system during the early 1900s did not account for eventuality of ecommerce and the fractionalization of payments and fulfillment and delivery but we’re in a place now where ecommerce and that fractionalization has created strategic exploits within the framework. So let’s talk specifics.. both state and federal laws restrict suppliers from offering gifts or free services to retailers that could influence purchasing decisions. So, would Brand supplied delivery be considered a ‘free service’ to retailers? Depends on who you talk to.. some may argue that delivery is not a free service to Retailers, but instead is a benefit to the consumer and there’s nothing in the law that says that an alcohol company cannot provide a free benefit to consumers.. and when you’re selling delivery to consumers it’s not even free, they’re paying for it! So then what’s the problem? Well, upon further inspection.. the responsibility to verify ID and that these end-consumers are 21 years or older is on the shoulders of the party that is transacting for those alcohol products. And so we’re back to 3-tier basics, it is indeed a retailer performed function. And, so, in that way, it must be something that the retailer would have to pay the brand supplier for the service of. And moreover, these laws are interpreted broadly, meaning suppliers would need to offer equitable delivery services to all retailers and not just for their own products but all other brand products in that retailers inventory. So, is Investing in last-mile delivery solutions that also cater to competitors a viable strategy for suppliers? Putting aside the cost and logistical implications, when considering the implication of having to offer this to all retailers and offer the delivery service to other competitors, the answer seems to be ‘no’.
But… is there another way that Suppliers can benefit from this growth hack? 💰📈
The Answer is right there: use 3rd Party Apps ✅
In states where third-party delivery is legal, third party companies like us at Accelpay can actually provide this last-mile service ourselves or through white label connections to delivery services like Doordash and Uber. At AccelPay we’re about to set up a new beta test where we offer same day delivery in a major market like New York and Los Angeles. Our hypothesis is that by focusing solely on same day delivery for alcohol brands and not having the demand-burden of other food and beverage deliveries, we can consume the demand for alcohol delivery by having far geographic reach from from a retail location for a low flat fee which will boost conversion rates on brand supplier sites, and lower costs to acquire and create a better experience for the end-consumer. We are looking at this as a key strategy in helping brand supplier sites generate significant revenues through their own site domains and make more effective use of their digital marketing dollars and create more 1:1 relationships with their end-users.
So, what do you think? Are you an alcohol brand looking to drive higher conversion, reduce shipping fees, speed up delivery times and drive more revenue through this often overlooked conversion drive? Sign up for a demo if your brand may be interested in joining our beta program.