Operations

An Insider Shares His Wine and Spirits Ecommerce Strategy Playbook

Empire Merchants’ Brian Becker describes how suppliers, distributors, and retailers can win on the digital shelf

Online Merchandising Strategies for Retailers
Photo credit: iStock.

As the ecommerce manager for a large wine and spirits wholesaler, I’ve witnessed firsthand how the pandemic has changed the way consumers interact with the brands we represent. As Americans increasingly embrace online shopping for their beverage alcohol needs, all three tiers of our industry must take advantage of new digital marketing opportunities. 

While many suppliers, wholesalers, and retailers view ecommerce as a “fourth tier” of the existing framework, I believe ecommerce should be integrated into the existing system in order to optimize the effectiveness of each of the three tiers. Consequently, we must work to educate industry members and empower them to utilize the ecommerce space as an extension of our current reach. 

How Suppliers Can Level Up

When initiating conversations with our suppliers about their digital strategies, we encourage them to start by articulating their online goals and priorities. Often a great place to begin is by ensuring their brands have good online representation and updated digital assets, in addition to learning about the B2B and B2C digital promotional opportunities now available for reaching both wholesale and consumer buyers.  

Suppliers should leverage the local expertise of their distribution partners through market-specific e-activation. One effective way to do this is through digital activations with high-volume and influential accounts. Like traditional merchandising efforts, local market relationships are a critical element of online foundations and eventual success. When working with top retailers, suppliers can request they feature the brands they represent in an email blast, banner advertisement, or perhaps even by hosting a virtual tasting. 

“One Prosecco rosé brand we represent grew their business 26 percent over a four-week pilot period through a mix of banner ads and local market activation.”

We’ve seen how effective these merchandising activations can be: One Prosecco rosé brand we represent grew their business 26 percent over a four-week pilot period through a mix of banner ads and local market activation. 

Another avenue of success can come from supplier activation with B2C retail ecommerce providers like CityHive, WineFetch, and Bottlecapps. Though each company specializes in a unique aspect of direct ecommerce, these types of providers can typically break down the barriers small retailers often face when trying to achieve digital equity and high-quality representation without the time or cost investment a custom solution would require. With the flip of a switch, web development groups (B2C focus) can unlock market-specific digital activations across thousands of retailers. 

Suppliers have also seen positive results with activations through third-party aggregated marketplaces (Drizly, MiniBar, ReserveBar, and Vivino, among others) which are overwhelmingly popular with consumers and have extensive reach. When conducting promotions through a consumer-facing marketplace, such as banners, targeted emails, or category takeovers, we recommend that our suppliers consider the potential impact to the account fulfilling the order. It is also important that the distance between the retailer and the ultimate consumer does not increase to the point of store anonymity. Consumers value their relationships with their local retailers and as the path to purchase is consolidated, the opportunities for communication and personal attention decrease. When negotiating agreements with B2C marketplaces, suppliers should make sure to retain access to data and sales results. This is a must when calculating return on investment.

“Through omnichannel digital activation and local market collaboration with distribution partners, suppliers can optimize and build lasting brand equity in the digital ecosystem.”

A multifaceted approach is a must in order to meet your customers where they are, and that includes trade buyers. On wholesale B2B aggregated marketplaces like SevenFifty (the parent company of SevenFifty Daily), suppliers can promote and advertise their products, reaching restaurant and retail buyers when they are searching for new items and placing orders to distributor reps. 

Another opportunity for improving marketing effectiveness lies with consumer-facing technology solutions (Thirstie and MikMak, for example) which offer suppliers greater access to data and control of the path to purchase, thus reducing potential friction while maintaining three-tier compliance. 

Like in-store execution, the last step is reserved for continuous improvement and creative, small-scale pilots. Most recently, we have been working with one of our supplier partners on a digital version of a mail-in rebate program. We are constantly trying to inspire creative discussions about online opportunities in an effort to redefine the standards for digital merchandising. 

Through omnichannel digital activation and local market collaboration with distribution partners, suppliers can optimize and build lasting brand equity in the digital ecosystem. 

How Wholesalers Can Drive Merchandising Online

At Empire Merchants, our sales teams are experts when it comes to traditional merchandising, and we are working to empower them to take the core, traditional principles and apply them to digital storefronts. Consumers shop differently online, so we need to look past the four walls of a liquor store and begin to bring brands to life in the digital space with the same initiative and creativity we do for the in-person shopping experience.

From a general Google search, distributor sales teams can determine if an account has a website, participates with any marketplaces, or maintains a social media presence; this is where we suggest to begin a retail survey. 

The next step in the survey process would be to evaluate the retailer’s website. By assessing banner advertisements, homepage placements, product adjacency, and pricing and sizes available for represented brands, wholesalers can gain critical information and establish a baseline for future activations. 

For ease of analysis, we encourage our salesforce to break down digital surveying into its analogous in-store equivalents. For example, banner advertisements on a webpage can be thought of like a traditional floor display. Banner advertisements can occupy a third or even half of a webpage before “the fold,” taking up more proportional digital space than a traditional product floor display would in a retail store. 

Other analogous components to the brick-and-mortar store include cold box placements, prioritized search and window displays, and strategic homepage placements. Once the sales teams are comfortable with the transferability of these concepts, we encourage our teams to speak with retailers and push for them to showcase supplier assets in these customizable sections on their websites.  

Well-executed ecommerce can create a more connected distribution with a closer connection to the final consumer through access to data and a thoughtful feedback loop with retailers. 

How Retailers Can Improve Online Sales and User Experience

The more control retailers have over their domain (both literally and figuratively), the better success they will have building a virtual trademark and extending their merchandising reach in the hyper-competitive online retail space. 

Product content on a retailer’s website is the first thing that consumers see and interact with before purchase. It is critical that retailers work to close content gaps and ensure that their brands are represented by high-quality and accurate digital assets. According to research conducted by Salesforce, 87 percent of shoppers engage with digital content before making a purchase either online or in store.  

The digital shelf is different, and it must be activated to capture all of the online sales opportunities. We encourage retailers to ask their salespeople for modern merchandising content that can help bring brands to life. Think of digital activation like offering 50-milliliter bottles at the countersuccessful exposure will increase exploration, trial, and incremental sales. 

By creating a strong digital presence, retailers can take control of the online sales experience, including added space for supplier digital activations and more access to sales data. This data can be shared with their wholesaler and supplier partners to enhance product offerings, promotions, and subsequently, customer relationships. Additionally, by thinking creatively and offering store-controlled delivery options and programs, retailers can protect their franchise and prevent further marketplace consolidation. It’s also important for retailers to increase delivery efficiencies and clearly communicate expected delivery times, as we all suffer from the Amazon Prime expectations of one- or two-day shipping. 

While digital activation has grown exponentially, it is by no means replacing the paramount in-store experience. Thus, when creating a digital strategy, retailers must keep in mind that consumers often shop (and research) online before making in-store purchases. Keeping the online and in-store messaging consistent encourages a frictionless interaction between the in-person experience and online sales. 

Online activation has become a critical component of the omnichannel retail framework and will continue to increase in influence. To successfully compete by reaching the final consumer in a meaningful way, all three tiers need to adapt to an enhanced digital environment and provide a smoother path to purchase. It is critical that suppliers, wholesalers, and retailers embrace this online opportunity to both stay competitive and build the brands they represent.

Brian Becker is the ecommerce manager for Empire Merchants. Brian works with the sales teams and trade on digital activations and with suppliers on overall digital strategy. 

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