January 22, 2022

Digital Marketing Education

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Liquor brands toast launch of e-gift cards

The global beverage alcohol market is expected to reach $736 billion this year. according to ResearchAndMarkets.com, a market research provider. The global gift card industry is projected to hit nearly $2 trillion by 2027, according to Allied Market Research, a Portland, Oregon-based market research firm

Digital behaviors around gifting in both industries also continue to accelerate. Across all Thirstie powered storefronts, 12% of all e-commerce orders were gifts, which jumped to 22% in December 2020, the company said. The new gift card offering allows those in receipt of the gift more freedom to select what they want, versus just being sent specific bottles. Cards also benefit the seller because purchases typically exceed the price specified on the card. 

Online purchases of gift cards across all product categories more than doubled in 2020, according to ResearchAndMarkets.com.

Devaraj Southworth, Thirstie’s co-founder and CEO, said the introduction was slow to arrive as the company worked to assure the offering was in compliance with the three-tier distribution model that governs adult beverage sales in the U.S. The rules generally require that most sales flow from supplier to wholesaler to retailer. “Every brand from Nike to Gucci to Dove Body Wash have been able to sell in a DTC format, but alcohol companies were getting left behind due to these regulations,” Southworth said in an interview. “We found a compliant way to link consumers on branded websites to local retailers.”

A recent Thirstie survey of more than 2,000 adult Americans found there is an overwhelming interest in liquor-branded gift cards. Given the choice, nearly two times as many consumers would give a gift card for alcohol over a bottle, the survey found.

Bacardi Limited said it would make its portfolio of premium spirit brands available at its MixLab commerce site, including Patron, Bombay Sapphire, Angels Envy, Bacardi Reserva Ocho, Dewar’s and more. A Grey Goose vodka card is also available at its web site.

“By offering Bacardi branded e-gift cards in partnership with Thirstie, not only are we meeting the high demand for spirits during the holiday season, but we’re creating an additional channel for the spirits industry to engage and interact with end-consumers in a meaningful way,” Alex Tomlin, senior VP and head of marketing for Bacardi North America, said in a press release.

Other manufacturers are expected to soon offer their own gift cards through Thirstie, including Macallan, Pernod Ricard and Metallica’s Blackened whiskey brand.

According to Southworth, the value of a digital consumer “is probably eight to 10 times more valuable than a customer in retail, because you can target them and re-target them,” while giving brands a head start on initiatives like new product launches.

He predicted that gift cards would help to raise online sales penetration for the liquor industry—one of the last consumer goods categories to experience a digital sales shift. He estimates the pandamic increased penetration from about 1% to 2% of sales to 3% to 4% today.

“If you look at France or China you’ll see it’s 10% of 15%, and there’s no reason why our category couldn’t, except for the antiquated laws. Will we get there in a year or two? No. But to 10% in the next five to 10 years is absolutely possible and will be driven by brands being able to target their consumers and understand their behaviors, which is something that has long been a challenge for them,” Southworth said.