In 2020, the beverage alcohol industry was catapulted into the future with e-commerce seeing 10 years-worth of growth in three months, according to estimates from direct-to-consumer platform Drizly. The current trends are expected to continue, with total alcohol e-commerce in the U.S. forecasted to grow six-fold between 2019 and 2024, according to IWSR.

This shift has provided a unique opportunity for smaller brands to level the playing field against international companies that dominate the majority of physical shelf space. With this in mind, we put together a guide on how to build an e-commerce foundation from some of the guests on Park Street University.

“You hear a lot of people saying ‘you can’t build a brand online, you have to build it in a bar’, which I think is very old thinking,” says Elwyn Gladstone, founder of Biggar & Leith, which sold Malfy Gin to Pernod Ricard in 2019. “Your opportunity to explain the brand, and to sell your story, and to get the perfect imagery and control everything is absolutely perfect online.”

A Guide to DTC E-commerce Models

There are three primary models for direct-to-consumer beverage alcohol sales, all of which work through the three-tier system.

On-Demand Delivery model, which includes companies like Drizly, GoPuff, and Minibar. This model was the forerunner of DTC within the alcohol space. These companies rely on a network of local retailers to deliver items purchased through their respective apps.

White Label model, which includes Speakeasy, Thirstie, Passion Spirits, among others, allow consumers to purchase from a digital storefront embedded in a brand’s website and fulfilled by local retailers.

Marketplace model, applied by companies such as Vivino and ReserveBar, are very similar to white label models, but allows the customer to purchase multiple brands from a digital storefront.

Get to Know the Modern E-Commerce Consumer

E-commerce consumers tend to be younger and more digitally-savvy with their own set of key interests. Head of Consumer Insights at Drizly Liz Paquette described the company’s typical consumer as “primarily urban, higher income” and noted they were primarily Millennials and Gen Xers.

“They’re highly social and in normal times they’re high in restaurant and bar frequency,” emphasizes Paquette. “They like to learn a little bit about the product they are purchasing.”

While the direct-to-consumer channel has historically been dominated by wines, these modern consumers are shifting more towards a demand for spirits. “From a categorical perspective, hard seltzer has definitely been the winner in the non-spirits world, but in the spirits world specifically tequila has been experiencing massive growth on Drizly, RTDs are sky-rocketing, and other rising spirits include gin and mezcal,” reveals Paquette. “The top sellers from a spirits perspective on Drizly remain whiskey and vodka.”

As is the trend across the industry, the e-commerce consumer is looking for more premium products, but Alan Schieman, CEO of Passion Spirits, has also found that his consumers are increasingly first-time buyers that are purchasing products they have never tried before. Scheiman believes that understanding this trend is the key to crafting campaigns that can capture these consumers.

“What becomes absolutely important is to understand the psyche of this consumer,” says Scheiman. “And by understanding them and in which ways they are already interacting with other companies through their mobile device, we can find the avenue and tools needed to present your message in a relevant way.”

Use Data to Your Advantage

One unique benefit that e-commerce sales provide is the direct access to your consumer data and analytics. If you know what to look for, these statistics can be leveraged to increase traffic to your site and create new sales. Even sales through third-parties can be useful for collecting data.

Of course, having consumers purchase directly from your site is the optimal route for collecting data. Tracking on-site checkouts allows your brand to learn more about the sources of traffic to your website and make informed decisions on the effectiveness of your marketing campaigns.

“You’ll be able to analyze the purchasing journey and optimize your calls to action and you’ll be able to monitor user data and purchase history as a means for re-engaging with all of your consumers,” says Devaraj Southworth, Co-founder of Thirstie.

Engage Consumers with Social Media

Many of the most helpful tools used to craft marketing campaigns that target these consumers are found on social media platforms. The key is to ensure you are leading your consumers in the right direction to close sales.

“Social media strategy and e-commerce strategy should always be linked,” shares Gladstone.

If you are featuring a product on your social media, make sure that your posts are leading the consumer back to your site. Social media is ineffective if the consumer sees something they want, but doesn’t know how to buy it.

It’s important to stay active on social platforms by featuring plenty of high-quality product images, following any relevant influencers, and liking posts from consumers that show interest in your products. You can also leverage paid features on social media platforms, including Facebook Retargeting, which allows you to advertise directly to consumers that have previously visited your site.

“Have you ever viewed a product online, got distracted or went to think it over and then noticed it followed you around the internet until you purchased it? That’s retargeting at work,” explains Speakeasy CEO Josh Jacobs.

Jacobs advises brands to use platforms like Facebook and Instagram, where ad managers allow you to target populations by age, gender, and interests. You can even upload known customers from email marketing lists to Facebook and they will leverage their analytics to target similar audiences.