Online retailers ‘miss out’ on $1.5bn of alcohol sales

US online alcohol retailers “missed out” on US$1.5 billion worth of sales in 2019, according to a report from Dutch banking firm Rabobank.

Online sales of alcohol in the US in 2019 were worth US$2.6bn

According to the 2020 Alcohol E-Commerce Playbook, released by the Dutch firm, online sales of alcohol in the US in 2019 were worth US$2.6bn, an increase of 22% over the previous year.

However, the report claims that retailers in the country are missing out on US$1.5bn worth of sales as “the penetration of the online alcohol category remains abysmally low”.

Rabobank found that online alcohol sales grew across four major online outlets, which includes online grocery stores, worth US$295 million; alcohol marketplaces, valued at US$265m; direct-to-consumer wine sales, worth US$950m; and online liquor store sales, which were worth US$1.1bn in 2019.

In spite of this, alcohol’s share of food-and-beverage spending drops by 88% online compared to its sales share in high street and brick-and-mortar stores. If alcohol’s share of sales in online grocery stores matched that of physical shops, stores would have sold US$1.8bn worth of alcohol in 2019, rather than US$295m.

Rabobank also predicted that online sales through alcohol marketplaces could “easily reach” US$1bn by 2023 if the market’s potential is realised.

According to the report, the industry must take “assertive action to address the challenges facing alcohol e-commerce” and a “failure to act could have profound consequences”.

In order to increase online spending on alcohol, “alcohol companies need to invest more in e-commerce” and must be prepared to target millennials and Gen Z consumers, who are currently driving online grocery sales.