What does the direct-to-consumer boom mean for retailers?
Dan Hooper, co-founder of YesMore drinks marketing agency asks what the pandemic boom in direct-to-consumer (D2C) sales means for drinks retailers in 2022 and beyond.
The stratospheric leap in buying online has meant that anyone who sold drinks online has sold a lot more. Many drinks brands jumped on the train too, launching their own direct-to-consumer arms – Molson Coors launched Revl in November 2020, and William Grant & Sons launched its direct offering, Clink, in 2021. Across 2020-21, it seemed as though everyone who could was moving into online drinks retailing.
And then: the great reopening and the return to shops and bars. But some online behaviours have stayed. Naked Wines, for example, has seen a strong performance. Pandemic-levels of growth won’t be sustained, but the shift to online won’t revert either, with people intending to continue to buy online more than before. So, what comes next for drinks retailers? How can they compete with all the D2C brands and portfolio owners who are moving in on their patch? Should they even still be investing in online?
The answer is yes, but it’s not as simple as creating a website, launching a copycat D2C brand or investing in an existing site. As the dust (hopefully) settles on the biggest change in the sector in decades, what should drinks retailers do online next?
ASSESS WHAT YOU HAVE AND WHETHER IT’S WORKING
The best place to start is by understanding what you have online and how it’s working for you. Do you currently have a website? Do you sell via Amazon or shoppable Instagram ads? How well do all of your channels work? What’s the cost per sale/conversion? Are they returning the investment you’re putting in?
And then look to your customers. How are they buying, how do they want to buy, and what suits them? Are there new customers you could reach online who aren’t finding you in other ways?
Your eventual strategy might be shoppable social ads, or Amazon only, or investing in reaching your hardcore fans to convert directly on your website. But now is the time to take an in-depth look and plan for what comes next.
DON’T FIGHT AGAINST THE BIG ONLINE RETAILERS
Whatever else you want to do, you need a strategy for Amazon. Whether you want to engage or ignore, it’s not going anywhere, and what it’s doing works, so be sure you understand its impact on you.
Yes, Amazon is a big beast. But it is also a platform you can engage with. Many brands and retailers that we work with see impressive conversion rates on Amazon. It’s a pre-existing ecosystem and something that can be trialled fairly easily.
OFFER SOMETHING UNIQUE
If you sell brands – or are a brand or retailer – that people really love (or you aspire to be one) then make the most of that. Off er fans something more – a reason to buy directly from you online, in the channel that works best for you.
Could you improve the online buying experience or change what customers receive in their delivery? What about rewards for loyalty?
Ask yourself how the whole experience can replicate your brand, surprise people, bring them unexpected joy and build loyalty. From Instagrammable packaging to added extras and excellent online service, there are a lot of ways to stand out and make the most of the continued popularity of online.