The online alcohol delivery market is shrinking in Australia according new data from IRI Australia, with consumers increasingly opting to click and collect.
IRI joined with consumer and liquor insights platform Growth Scopes to host an ‘eCommerce Expansion’ webinar exploring the state of the retail liquor ecommerce market.
IRI noted that the retail liquor industry has evolved rapidly in the face of the pandemic, with a 45% uplift in buyers for online liquor.
However, the preference for delivery has subsided following the end to lockdowns.
Data shows a 6% decrease in consumers purchasing online and having products delivered compared to 2020. In contrast, the number of consumers to use click and collect last year jumped from 47% to 55%.
Younger cohorts have led the migration to pick-up, with pre-family and young family categories seeing the biggest uplift. By comparison, the preference for online delivery has remained steady for retired couples.
Mel Anderson, research and product director for Growth Scope, said slowing online liquor delivery sales could be due to challenges to navigating shopping websites, dealing with couriers, or the fact that customers “want it now”.
Online liquor consumers skew towards males and young families. Males make up 59% of online purchasers and the most popular category for delivery is wine.
However, its growth is slowing, while beer and RTDs are accelerating.
Mid-strength beer was one in the top 10 liquor formats of online purchased products versus in-store, but Australian craft beer was listed in the bottom 10 liquor formats.
Anderson said it indicated there was a huge opportunity for craft brewers.
“The opportunity for craft who may be a challenge to get ranging in some other larger bricks and mortar retailers and therefore increase their distribution presents an opportunity for them to really leverage the online channel as a way of broadening their touch base because you don’t have to live or you’ll be near the physical brewery to be able to buy the craft beer,” she said.
“If it’s available online, you could be anywhere in the country and order it and get it delivered. So enable that accessibility which may not be possible because you’re not ranged in one of people’s local bottle shops or supermarkets stores.”
Champagne and single malt whiskies notably over-index in online share, whereas American whiskey and vodka under-index.
Coles vs Endeavour
As for how the liquor giants are faring, Endeavour Group announced this week that it had seen online sales growth of 17% in FY22 to $1billion, with online penetration reaching 10%
Coles said its liquor eCommerce sales grew 50.1% to $33 million for the third quarter of the 2021 financial year.
Endeavour’s sales were around six times higher than First Choice and Liquorland of Coles Liquor. However, these numbers exclude sales sold through coles.com.au, which are reported separately in the supermarket’s e-commerce sales.
Endeavour increased its customer base by 2.2 per cent during the first half of this year.
“Endeavour Group has been able to reach out to that same shopper online and in store as well because 25% of Endeavour’s customers who visited online, also shopped in store and they’ve done a terrific job in driving that to digital traffic,” IRI’s Ishakya Gunaratne said.
Gifting is a driving force of value & premiumisation online
IRI data shows online transactions are four times more likely than bricks and mortar transactions to be underpinned by gifting.
Dan Murphy’s launched a Gifting Hub in October 2021 following a doubling of online gifting in the prior six months, to the point where more than one in 10 online orders were being nominated as gifts.
Watch the full presentation here.
The top online data apps
New data from market intelligence company Sensor Tower shows Dan Murphy’s was the most downloaded alcohol-specific delivery app between 2020-22.
BWS on tAPP, Dan Murphy’s and Jimmy Brings app downloads have increased year on year however Boozebud and Tipple’s app downloads have decreased year on year.
Tom Cui, Managing Director APAC at Sensor Tower said: “Aussies are now accustomed to the ease and convenience of ordering food and alcohol via apps at home, as opposed to physically visiting a store.
“Even in restaurants, we’re now used to scanning QR codes via our mobile phones and it appears this has translated into our homes too. Sensor Tower data suggests this purchasing behaviour has accelerated the adoption of alcohol delivery apps by several years. Whilst throughout 2022 we might see a slight drop in download as we enter a post-pandemic world, more long term, we expect adoption to only elevate further.
“New entrants in the market, like MILKRUN which has recently started to offer alcohol-delivery services in a bid to remain competitive in a crowded market, is a testament to this. As the competition in this space heats up, Sensor Tower will continue to track how consumers are behaving and how brands are performing.”