Top Reasons Why Liquor Brands Should Rethink Marketplaces

Are we entering an era where e-commerce technology allows liquor brands to operate like traditional DTC brands?

The liquor industry has traditionally been anchored in brick-and-mortar retail, and rightfully so, as it's the most intuitive and accessible place for consumers to purchase liquor products. However, this focus has led liquor brands to historically undervalue e-commerce as a source of revenue and customer acquisition. This underestimation is partly due to the channel's low adoption from a consumer perspective, especially when compared to the technological costs of hiring a digital team and maintaining digital infrastructure for relatively small online sales. More critically, there are compliance concerns associated with transacting directly with consumers, which contravenes the 3-tier regulation, adding to the confusion about how to market to these consumers online and on the brand's domain. Consequently, it's been 'easier' for liquor brands to outsource the technical work and compliance liability to a liquor marketplace, which can manage regulatory issues and provide a minimally viable solution for reaching customers who prefer to shop online. But this raises a question: where has this approach left brands in terms of their relationships with customers, and are we entering an era where e-commerce technology has evolved to address and navigate these three-tier concerns while allowing liquor brands to operate like traditional native DTC brands?

So, let's dive in and discuss the drawbacks that exist with liquor marketplaces and help to clear up the role marketplaces should have within an e-commerce framework. We'll examine where they fit into the broader picture and also explore what a high-level, brand-centric e-commerce approach should look like in this evolving landscape.

Marketplaces: A Double-Edged Sword in Liquor E-Commerce

Marketplaces became the go-to solution for liquor brands entering the e-commerce realm primarily due to their ease of use and ability to navigate the complex compliance landscape of the liquor industry. For brands, Marketplaces handled everything from customer reach to compliance, making them an attractive option for brands that were either unable or unwilling to develop their own e-commerce systems.

However, as e-commerce tech has progressed, the limitations of marketplaces have become more apparent. The standardized nature of these platforms means limited opportunities for brand differentiation and customer engagement. As consumer preferences have shifted towards more personalized high brand shopping experiences, the one-size-fits-all approach of marketplaces is not optimized for conversion or brand loyalty. This, coupled with advancements in e-commerce technology, has made marketplaces less appealing to consumers and brands. Now, specialized e-commerce compliance technologies (like AccelPay) enable liquor brands to create more personalized customer experiences, maintain control over their data, and manage compliance in a more brand-centric environment. As a result, marketplaces should be viewed more as a supplementary channel rather than the primary strategy for online sales and audience acquisition.

The Drawback of Marketplaces

Limited Customer Experience Control‍

Marketplaces often restrict liquor brands from offering unique customer journeys. This results in a uniform shopping experience that may not align with your brand's identity or customer engagement goals.

Questions for E-commerce Managers:

• How does a generic marketplace storefront limit your brand's story and identity?
• What opportunities are lost in not controlling the customer's first online impression with your products?
• In what ways could your own website better reflect your brand's ethos compared to a marketplace?

Data Access Restrictions‍

Marketplaces typically control customer data, limiting brands' ability to conduct targeted marketing and understand consumer behavior.

Questions for E-commerce Managers:

• How does limited access to customer data on marketplaces affect your marketing strategies?
• What customer insights are you missing due to restricted data on marketplaces?
• How could direct access to customer data on your platform enhance your marketing ROI?

Increased Customer Acquisition Cost (CAC)‍

Marketplaces can inflate CAC and often result in lower ROAS, making them less efficient for marketing.

Questions for E-commerce Managers:

• How does the marketplace CAC compare to your direct channels in terms of budget impact?
• Can shifting to your e-commerce platform reduce CAC and increase ROAS?
• What are the long-term ROI implications of higher CAC on marketplaces for your brand?

Diluted Brand Loyalty‍

Marketplaces tend to promote their own brand loyalty over that of individual brands, weakening direct customer-brand relationships.

Questions for E-commerce Managers:

• How does marketplace allegiance affect your brand’s direct relationship with customers?
• Can your brand's loyalty programs and retention strategies be effectively executed on a marketplace?
• How would direct control over customer interactions on your website enhance brand loyalty?

Cannibalization of Sales Channels

Competitive pricing and promotions on marketplaces can negatively impact other sales channels.

Questions for E-commerce Managers:

• How do marketplace strategies, like competitive pricing, affect your overall sales strategy?
• Can your brand differentiate its marketplace offerings to minimize channel conflict?

Inadvertent Competition Funding‍

Spending on marketplaces might unintentionally increase visibility and sales for competitors.

Questions for E-commerce Managers:

• How does spending on marketplace ads potentially benefit your competitors?
• In what ways can investing in owned channels avoid inadvertently boosting competitor sales?

How E-Commerce with Accelpay is Different

So, how should E-commerce managers think about how to DTC and what ‘technology’ means within the context of alcohol E-commerce. What it comes down to is centralization vs de-centralization, and Accelpay is on the decentralized side of the spectrum. Where marketplaces acted a centralized location where many brands could leverage the marketplace’s role as liability holder of the consumer-retailer transaction and order referral, Accelpay’s tech is decentralized where a brand site can harness our software on their site as plugin that releases the brand from the process of transacting with the consumer and from having to give something of value for free to a liquor store in the form of an order referral. At a high level here are the benefits to this decentralized approach:

Accelpay’s Comprehensive Offerings:

Flexible E-Commerce Integration‍

Accelpay integrates with major platforms like Shopify, WooCommerce, headless platforms and more, offering flexibility and efficiency.

Compliant Marketing Solutions‍

Enhance your marketing while adhering to regulations, utilizing integrations with tools like Klaviyo and Postscript.

Harness the Power of Your Data

‍Accelpay enables automatic data collection and routing to your preferred data warehouse or analytics stack to refine your strategies and make data-driven decisions.

Legal Support and Compliance Management

‍Trust Accelpay to expertly handle compliance in order routing and consumer transactions with licensed retailers with well-documented records for regulatory scrutiny.

Strategic National Fulfillment and Shipping‍

Benefit from Accelpay’s strategic retailer network, ensuring efficient fulfillment and enhanced shipping options.

Subscriptions and Membership Management‍

Manage recurring revenue streams effectively with Accelpay’s subscription and membership services.

Three-Tier Order Referral Network‍

Accelpay utilizes a unique three-tier system to refer orders to licensed retailers, ensuring compliance while expanding your reach.

Strategic Routing and Transparency‍

Experience strategic routing of orders and complete transparency in transactions, enhancing both operational efficiency and customer trust.

Managed Customer Service

‍Our dedicated team handles all customer inquiries and issues, ensuring a seamless and satisfactory experience for your customers, while allowing brands to focus on growing.

Balancing Marketplaces with a Broader E-Commerce Strategy

E-commerce managers in the liquor industry face a critical juncture where they must realign their strategies to reflect those of traditional direct-to-consumer (DTC) companies. This shift is key to enhancing revenues, boosting retention, and acquiring new customers. The time of depending on marketplaces for e-commerce is evolving, with software like Accelpay ushering in a more hands-off-for-brands approach that better navigates the compliance and e-commerce. This change prompts a strategic reassessment of how marketplaces fit into the larger e-commerce marketing playbook.

In this context, it's essential to construct a comprehensive framework for channel marketing and prioritization. E-commerce managers need to critically assess the role of marketplaces in their strategies, considering them as one component rather than the entirety of their online presence.

Therefore, the question arises: If marketplaces are merely a part of the e-commerce marketing playbook, what does the full playbook encompass, and where exactly do marketplaces fit within it? This broader playbook should encompass not just marketplaces, but also direct sales through brand websites, leveraging innovative tools like Accelpay for compliance guidance and transaction handling, while focusing on building a more direct and engaging relationship with consumers.

Channel Marketing and Prioritization Framework for E-Commerce Managers

Content Marketing

Action: Develop a content calendar to plan and schedule top tier content across all channels, including ads, social media, and the company website. Collaborate with influencers to promote new products and drive new product expansion growth.

Marketplace Role: Use marketplaces as a supplementary channel for content distribution while focusing on direct channels for deeper customer engagement.

Operations

Action: Focus on improving fulfillment speed and inventory planning to ensure product availability and customer satisfaction. Implement a customer service strategy to address customer inquiries and complaints promptly and effectively.

Product Development

Action: Research and test new product ideas and models, including partnerships with celebrities and influencers. Implement a limited quantity launch strategy to generate excitement and drive sales.

Marketplace Role: Test new product reception in marketplaces, but focus for launches should be on direct channels for better branding and customer data collection.

Email and SMS Marketing

Action: Optimize email and SMS capture tactics to increase the size of the email and SMS lists. Develop an email and SMS automation strategy to send targeted, personalized messages to customers.

Marketplace Role: Use marketplaces to capture initial customer interest, then migrate communications to direct channels for more personalized engagement.

Conversion Rate Optimization

Action: Analyze and optimize the website design and user experience to improve conversion rates. Implement A/B testing to determine the most effective tactics for increasing conversions.

Marketplace Role: Apply learnings from marketplace customer behavior to optimize the direct website experience.

Paid Advertising

Action: Develop a paid advertising strategy to target the most relevant and valuable customers. Analyze and optimize paid advertising campaigns to improve performance and return on investment

Marketplace Role: Use marketplaces for broad reach but concentrate and prioritize spending on direct channels (Meta, Google) for more targeted advertising and better ROI.

Organic Marketing

Action: Implement an SEO strategy of keyword optimized blogs, on site content optimizations to improve indexation, and backlinks from high domain rank authority sites to improve the website's visibility and ranking on search engines. Use social media and partnerships to drive organic traffic and engagement.

Marketplace Role: Utilize marketplaces for SEO benefits but focus on direct channels for a cohesive brand story and customer journey.

Social Media and Partnerships

Action: Create and implement a social media strategy to engage and grow the brand's following. Identify and pursue strategic partnerships to expand the brand's reach and influence.

Marketplace Role: Use marketplaces as one of the many touchpoints but prioritize social media and partnerships for direct customer engagement.

Decoding DTC: What an E-Commerce Channel Playbook Looks Like

Acquire New Customers (Top of Funnel)

Reach / Traffic‍

Maximize reach across qualified audiences to drive brand awareness and develop retargeting pool with brand engagers / video viewers / site visitors.

Channels: FB / IG, TikTok, Google Ads, Youtube
Audience: Interest/behavioral audiences, high-value LaL audiences. Exclude: Brand engagers, site visitors, purchasers, email list
KPI: uCPM, CPLC or CPVV (3 sec). Secondary: CTR
Creative: Video. General, UGC, interest-matched

Lead Gen

‍Generate retargetable leads from people who are not familiar with the brand

Channels: FB / IG, TikTok, Website Popup
Audience: Interest/behavioral audiences, high-value LaL audiences. Exclude: Brand engagers, site visitors, purchasers, email list
KPI: Cost Per Lead > ~$3 (to calculate based on conversion rate of subscribers and first order AOV). Secondary: CTR, CPM, CPLC
Creative: Video & Static. General, UGC, interest-matched

Prospecting‍

Convert net-new users unfamiliar with the brand.

Channels: FB / IG, TikTok, Google Ads
Audience: Interest/behavioral audiences, high-value LaL audiences. Exclude: Brand engagers, site visitors, purchasers, email list
KPI: CPA, ROAS
Creative: Video & Static. General, UGC

Convert Leads (Middle of Funnel)

Non-customer retargeting

Convert leads who have expressed interest in the brand.

Channels: FB / IG, Google Ads, Email, SMS, Website Popup
Audience: Past 30-day Topicals FB/IG page engagers, video viewers, subscribers. Exclude: Purchasers, Site Visitors
KPI: CPA, ROAS. Secondary: CTR, CPM, CPLC
Creative: Video & Static. UGC, Promos, Value Props, Product-focus

Drive Sales, Increase Customer LTV & Reduce Customer Churn (Bottom of Funnel)

Retargeting‍

Increase repurchase rate amongst users who have been to site recently

Channels: FB / IG, TikTok, Google Ads, Email, SMS
Audience: Users who have been to site or opened email in past 90 days (30, 60-90). Exclude: Past 14-day Purchasers
KPI: CPA, ROAS. Secondary: CTR, CPM, CPLC
Creative: Video & Static. Promos, Value Props, Product-focus. Test which value props and creative elements lead to the higher CTR

Retention‍

Increase repurchase rate amongst buyers who have purchased in the past 180 days

Channels: FB / IG, TikTok, Google Ads, Email, SMS
Audience: Existing purchasers who are within 180 days of their last purchase. Exclude: Past 90-day site visitors, email openers, Past 14-day Purchasers
KPI: CPA, ROAS. Secondary: CTR, CPM, CPLC
Creative: Video & Static. Promos, Value Props, Product-focus. Test which value props and creative elements lead to the higher CTR

Winback‍

Increase repurchase rate amongst buyers who have not purchased in the past 180 days

Channels: FB / IG, TikTok, Google Ads, Email, SMS
Audience: Existing purchasers who are past 180 days since their last purchase. Exclude: Past 180-day purchasers
KPI: CPA. Secondary: CTR, CPM, CPLC
Creative: Video & Static. Promos, Value Props, Product-focus. Test which value props and creative elements lead to the higher CTR

Reimagining Liquor E-Commerce

Are you tapping into the full potential of your brand in today's digital landscape? The liquor industry's move from traditional marketplaces to innovative direct-to-consumer platforms represents a significant shift, one that goes beyond mere trend-following to strategic transformation. This discussion has shown that embracing this shift is about more than adaptation; it's about actively shaping your brand's digital future.

Key Takeaways:

• Marketplaces, while providing an initial foray into e-commerce, come with notable limitations in terms of brand differentiation and customer engagement.
• A heavy reliance on marketplaces can lead to weakened brand loyalty, increased customer acquisition costs, and missed opportunities for direct interactions with consumers.
• Accelpay offers a pathway towards effective DTC platforms, enhancing brand control, simplifying compliance, and offering personalized customer interactions.

As you navigate this digital crossroads, consider refocusing on a DTC strategy that strengthens your brand’s connection with customers. By leveraging Accelpay, you can confidently manage the e-commerce landscape, ensuring your brand's distinct presence and deepening customer relationships. Schedule a demo to see how it works!