Delivery speed becomes key for online alcohol sales: IWSR

GLOBAL – The importance of delivery speed has risen as consumers increasingly expect, and show a willingness to pay for rapid fulfillment even though meeting this demand is also becoming a much greater challenge, according to Global alcohol market research firm, IWSR.

Across 16 focus markets researched by IWSR, consumers show a strong net willingness to pay more for delivery within one hour of ordering.

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This is particularly strong in markets including Brazil, the US, and Italy while in some markets, like the UK and Japan, delivery speed is less important currently, but demand for speed is increasing.

According to IWSR, in some countries, such as China, shoppers have become accustomed to rapid delivery for eCommerce in general and they expect the same offering for alcoholic beverages, even if it means less product choice or higher delivery costs.

Unlike China, consumers in countries such as the UK, where alcohol eCommerce is primarily bought from omnichannel retailers or specialist websites, there is likely to be some initial hesitance to adopt rapid delivery services if it comes with a higher cost and/or narrower range of products.

Guy Wolfe, Strategic Insights Manager at IWSR said:” Although consumers in different global markets place different levels of importance on delivery speed, one clear trend that we’ve identified is that speed is growing in importance everywhere.”

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Wolfe adds that speed is particularly important for younger consumers, including millennials and Gen Z consumers of the legal drinking age (LDA).

Interestingly, millennials in all markets are strongly willing to pay more for fast delivery while boomers, on the other hand, are currently unwilling in general, he stated.

The findings show that concerns around delivery continue to deter some consumers from eCommerce, considering that 21% of consumers said that waiting for delivery is a barrier to shopping for alcohol online, particularly the LDA Gen Z and millennial consumers.

IWSR pointed out that a growing number of on-demand delivery services have emerged to fulfill the need for fast delivery services, but this sector is not without challenges.

The research firm which specializes in data and analysis of the beverage alcohol market says that On-demand delivery services are capital intensive to start and maintain their operations.

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It added that as the number of providers rises, increased competition, coupled with a general slowdown in eCommerce post-pandemic, is proving to be problematic for some.

A case in point is GoPuff, an instant delivery firm with operations in both the US and Europe, which employs around 15,000 people across the two countries.

It recently announced plans to cut 3% of its global workforce, citing the importance of “balancing scaling the business with fiscal responsibility and long-term value creation”.

In addition, Doordash, a food delivery service, saw its share price drop considerably towards the end of 2021.

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