Just as consumers are forced to completely overhaul their daily routines due to the coronavirus, online retailers also are shifting strategies and priorities.
Drinks.com, which provides wine ecommerce technology platforms for retailers such as Boxed Wholesale (No 339 in the 2019 Digital Commerce 360 Top 1000), The Kroger Co. (No. 17) and Thrive Market (No. 183) and is the parent company for online retailers Wine Insider and Martha Stewart Wine Co., says it’s rapidly scaling its operations to meet unprecedented demand.
“That means ensuring that our winery partners can scale their own production operations up to meet our growing needs and increasing warehouse staffing and resources to manage the increasing volume of orders from around the country,” says CEO Zac Brandenberg.
At the beginning of the year, Drinks.com was more focused on growing its B2B operations. The company manages wine ecommerce programs for merchants. Services include sourcing the wine, branding it, managing the website and fulfilling orders, while remaining compliant to individual state/county alcohol regulations. However, the company is seeing “spiked attention and growth” on its direct-to-consumer ecommerce sites as consumers flock to buy ship-to-home wine, Brandenberg says.
Since March 25, orders at Wine Insiders and Martha Stewart Wine Co. have increased 250%-300% compared with usual volume for this time of the year, Brandenberg says. “Traditionally, Black Friday and Christmas week are the two biggest order weeks of the year, and the last three weeks’ order volume has each been about 33% higher than even those lofty weeks,” he says.
In the Northeast, normal seasonal order volume is up 310%. In the West, it’s up about 270%. Midwest orders are up 230% and South 220%, Brandenberg says.
Baby boomers are placing about 200% more orders than normal for this time of year. Millennials are placing about 290% more and Generation X 260% more.
“At the end of the day, being agile and adaptable to the external environment is extremely important,” Brandenberg says. “We feel a sense of responsibility to do what we can to keep this segment of the economy running, as it impacts the livelihood of workers in our supply and logistics chains around the globe, so the more we succeed in meeting the needs of our customers, the better positioned we will be to ride out the constantly changing market conditions that swirl around us.”
As a part of that effort, Drinks.com has reached out to more European and California wineries that have been hit hard by the pandemic and offered them a new sales channel through ecommerce, Brandenberg says.
And as more consumers across the United States are urged or mandated to stay home, the company also is working with wineries that supply wine to companies in the travel and hospitality industries that are facing last-minute order cancellations. “We just secured more than 30,000 additional cases of wine due to order cancellations,” Brandenberg says. “We’re able to re-stock our cellars and help others in the industry that are facing order cancellations.”
If the current elevated demand continues for a sustained period of time, Brandenberg says his company will have to work hard to keep its supply chain stocked with a wide variety of quality wines in order to meet the needs of new customers and distributors.
“Shipping and delivery delays could continue, and we’ll need to maintain higher inventory levels than we ordinarily would,” he says. “That’s something that our team is actively thinking about and trying to get ahead of by forging new partnerships with wineries, working closely with our fulfillment partners and maintaining the health of our overall supply chain.”
Brandenberg says it is likely that the influx of consumers trying out ordering wine online for the first time will become long-term online wine purchasers after the crisis dies down.
“We expect to see long-lasting changes in consumer behavior across the board and will likely look back on this time as the tipping point for when ship-to-home groceries and adult beverages became mainstream,” he says.