How Covid-19 Has Created A New Online Consumer That Is Here To Stay

On this page you will find out how covid 19 has created a perfect opportunity for winemakers, distillers, and craft brewers to take their online consumer right into the hearts of their businesses.
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Wherever you might be in the world the message from your government might be slightly different, but the meaning is the same. In the US the public is being urged to ‘shelter in place’. In the UK the mantra is “stay at home, protect lives’. Each country has its own slogan that its people now know off by heart.

The cumulative effect of weeks in lockdown, and safe social distancing, is that we are all now living our lives online. Be it for entertainment, keeping in contact with friends and family, for work, and, in particular, for shopping. It has resulted in what behavior analysts are already claiming is going to be a fundamental shift in the way we go about our daily lives, even when we come out of the Covid-19 crisis.

If, as the psychology experts claim, it only takes 21 days for us to form a new habit, and 66 days for it to become embedded in our lifestyle then our move to shopping online and having our goods delivered is going to be a permanent change that lasts beyond this virus. Consumers themselves recognize they are changing, and changing fast. A Future Consumer report by Ernst & Young reveals 42% of consumers believe the pandemic will fundamentally alter their shopping habits. Now it's even more critical for companies to anticipate how consumers will change and respond to specific segment needs,” says Ernst & Young’s Andrew Cosgrove.

Dramatic shift

Last July Retail Economics was claiming half of retail sales in the UK would be online within 10 years. Now retail analysts are predicting the shift to online during this pandemic has been so dramatic that for some grocery categories, goods and services virtually all of it will be done online over the next decade. That’s already the case for some consumer good sectors.

Consumers are being forced out of their comfort zones and what was their usual way of shopping and behaving has already been transformed with weeks of the global pandemic lockdown.

Most of those changes have come from online and home delivery. Just look at these figures from Retail Economics. It says that in mid-March 16% of consumers were shopping more online in order to safeguard themselves from going to the shops. By March 29 that proportion had gone up to 38% of people, and by April 22 it was 58% and will have gone even higher since.

Nielsen reveals alcohol is the fastest-growing e-commerce category in the US, but it is the scale in which it has grown over the last two months that shows how quickly we have bought into buying online and home delivery.

In the week to March 7 there was a 13% increase in online US alcohol sales, by the end of March there had been a 331% increase in sales. By the end of April the increase was up to 500% and still climbing. Wine is enjoying the largest online success, making up nearly 70% of total online retail sales, says Nielsen.

The UK has seen a similar picture. CGA, the drinks industry analysts, says 24% of the country’s population bought alcohol online in March.

The reason the pendulum has swung so extraordinarily is this was a trend that was already happening. As Simeon Siegel of BMO Capital Markets says: “The coronavirus is accelerating the structural changes we've been seeing across retail and society for the last decade - toward online interaction, toward e-commerce and away from brick and mortar, toward direct-to-consumer.”

The move to drinks delivery is also opening up for restaurants, initially as a way to potentially survive and get through the crisis, but as a long term part of their business models. Nielsen reports a growing number of US consumers (14%) are now ordering alcohol with their takeout food in the week to April 25, up from 9% in mid-April. Up to half of those would also consider ordering a cocktail kit or pre-made cocktail from a bar or restaurant.

Boom in new consumers

It’s the pace at which new consumers are turning to online drink platforms that is so potentially game-changing for the sector. Everywhere wineries, wine clubs, drink stores, and online sites are seeing huge spikes in new customers. Naked Wines says it had a near 800% increase in new sign-ups between March 15 and April 4, compared to the same period before. Winc saw a monthly increase of 55% in new recruits, adding 57,500 to its database. Wineries are seeing big jumps in their wine club numbers, which is helping, to some extent, to buffer losses from their cellar door business.

The big question is how many of those new customers will remain loyal to these online players once we are all free to return to the high street. But even if they lose 10% to 20% or more, the huge increase in numbers means the potential revenue growth is way beyond what anyone could have imagined prior to Covid-19 breaking out.

We are also going to see far more imaginative and creative ways of not just keeping hold of those customers, but attracting far more, from right across the world. We have already seen the explosion in the number of online tastings, and Zoom-style events that wineries, distributors, retailers, and restaurants are already hosting.

Smarter and more interactive online

The next step will be the speed in which new smart interactive technologies, such as virtual and augmented-reality software that allows shoppers to digitally enjoy the products they are thinking of buying, are going to be used. We might have read about apps that allow you to try on clothes or see how a new piece of furniture might look in your living room, they are all going to become the norm of how we shop in the coming months and years.

They are already hugely popular in China, where Alibaba, and its various online platforms, allows shoppers to virtually walk through its online shopping aisles. Then there is live streaming, again already attracting tens of thousands of viewers in China, where influencers, brand owners, and retailers simply live stream from a store, a factory, or a farmer’s vegetable field, showing how goods are made and talking about why you might want to buy them. Informing and entertaining you at the same time.

The perfect opportunity for winemakers, distillers, and craft brewers to take their online customers right into the hearts of their businesses, increasing loyalty and spend as they go. The future’s bright. Providing you are online.

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