Retailer Predictions for the Future of Alcohol Delivery
Stock-up behaviors have subsided, but will consumers continue to embrace online ordering and delivery beyond the pandemic?
The pandemic’s onset sent online beverage alcohol sales soaring as consumers sheltered in place and avoided in-store shopping, opting instead for the safety and ease of having drinks delivered to their doorsteps. But as Covid-19 vaccination rates increase across the country, states re-open for business, and everyday life returns to something resembling “normal,” will consumers continue shopping for alcohol online and ordering delivery, or will they revert to their pre-pandemic shopping habits?
NielsenIQ data shows that while online sales growth is slowing, it remains strong compared to March 2020. Online alcohol beverage sales are up 87 percent year-to-date compared to the same time period last year, and growth during January and February 2021 increased 175 percent compared to January and February 2020.
“Dollar growth began to slow a lot starting in March of this year, up only 15 percent compared to the pantry-loading month of March 2020,” notes Danelle Kosmal, NielsenIQ’s vice president of beverage alcohol. “Even so, online growth continues, driven by the continued increase in the number of buyers who are purchasing alcohol online.”
The quantity of online orders is also up in Nielsen-tracked channels, showing a 39 percent increase compared to last March — indicating that new customers are ordering online for the first time and existing shoppers are making repeat purchases. However, now that consumers’ stock-up behavior has subsided, basket sizes have decreased. According to Nielsen, shoppers spent approximately $14 less per online alcohol order in March 2021 compared to the same period last year.
On Drizly, the average order value declined 13 percent in March and April 2021 compared to the same period in 2020. However, it remains 25 percent higher than the 2019 pre-pandemic average.
“Overall, sales have remained strong throughout 2021,” says Liz Paquette, Drizly’s head of consumer insights. “despite growing vaccination rates and rollbacks of pandemic restrictions over the past few months.”
Strong Online Sales Continue
Retailers across the country are also continuing to see strong sales for online and delivery orders as we head into summer.
“We started with Drizly right during the start of the pandemic, so online sales obviously grew pretty quickly from April through December of last year,” says Mike Fisk, chief sales and marketing officer at Cox’s Spirit Shoppe in Louisville, Ky. “Since then, it really hasn’t gone down from where we were.”
While bulk buying has tapered off somewhat, customers are placing online orders more often. And now that many have become accustomed to having drinks orders delivered, Fisk thinks they’re likely to keep ordering online.
“I believe we’re going to continue to see more and more people try it, and if it’s a good experience for them, it’s going to be something they continue to do,” he says. “Our in-store traffic hasn’t taken much of a hit, so I think Drizly has given us another stream of customers outside of that.”
After experiencing a 40 to 50 percent increase in online sales during the early pandemic months, Fireside Cellars in Santa Monica, Calif., reports that sales have started to level off in the last couple of months. Even so, they are still higher than pre-pandemic levels and order values have also remained steady due to their minimum order requirements for delivery.
As restrictions ease, store president Fred Hakim feels that many customers will continue ordering online for delivery. “I think it’s a question of habit,” he says. “They get into the habit of ordering online, so they may keep doing it for the convenience. Customers don’t have to get in their car and worry about parking or traffic. They just sit at home and their order appears.”
At Molly’s Spirits in Denver and Greenwood Village, Colo., the number of delivery orders has continued to increase over the last few months.
“With bars and restaurants opening up and people more comfortable heading into stores, we’ve seen a dip in the average cart size but not in the number of orders that we deliver,” says Mollie Cook, the director of marketing at Molly’s. “Q1 is typically our slowest quarter, but we sent out an average of about 1,500 orders per week this year, which is more than we were sending out the door on average in Q2 and Q3 of our 2020 fiscal year.”
While there hasn’t been a major shift in the types of products people are ordering online, Cook has seen continued growth in the ready-to-drink category. “Now people are used to bringing their own single-serve options to get-togethers rather than gathering around a punch bowl,” she says.
Consumers have also gotten comfortable with ordering alcoholic beverages online and having them delivered to their homes. “I think many people were reluctant to try it at first, or they didn’t know it was even possible to order alcohol online,” says Cook, “but the pandemic drove people to the internet to order just about everything.”
That’s not to say that online shopping will replace the in-store experience; rather, it will be an attractive option for the growing number of customers that prefer to purchase at home. “We do think people will relish the ability to come into the store, to chat with our staff about what’s new and exciting, and browse what’s on the shelves,” says Cook. “But we also don’t see delivery going anywhere.”
Paquette also believes that the pandemic has changed shoppers’ behavior for the long term.
“Consumer awareness for online sales and delivery in the alcohol category skyrocketed during the pandemic. Similar to the trend seen acorss other categories, from grocery to pharmacy, consumers have become accustomed to the ease and convenience of shopping online and getting items delivered to their door,” she says. “We expect this will continue to drive the beverage industry toward e-commerce in a post-pandemic world.”