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Evolving Retail Tech Strategies in the US Alcoholic Beverages Market

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As of 2023, the revenue of the US Alcoholic Beverages market amounts to US$283.80 billion. The segment already comprises a massive portion of the overall $331 billion US beverage market. Going forward, it is expected to grow annually at a CAGR of 5.55% between 2023-27. Displaying steady growth, it is estimated that by the end of this year, online sales will contribute 1.6% to total revenue in the category- with a projected overall volume growth of 1.5% in 2024. 

Today, malt beverages and wine and spirits products divide the market in nearly equal proportions. Distilled spirits account for 35% of sales. Vodka is the largest sub-category of spirits, making up 33% of cases sold, followed by whiskey with 23% and rum with 13%. Wines make up around 14% of the market- 71% of cases are domestically produced and 21% are imported. 

The Alcoholic Beverages market is a growing industry set to evolve rapidly to cater to changing tastes, trends, and digital-first retail environments. With this blog, we will delve deeper into the trends and factors driving this market and provide insights on how to stay profitable, relevant, and distinct in this competitive industry.

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In 2023, Millennials accounted for almost 45% of the legal drinking age population in the USA. By 2030, this number will increase to nearly 54%. Younger generations will soon dominate the alcoholic beverages industry in America, especially as Gen-Z enters the market. This necessitates development not only within eCommerce but also product innovation. Brands must constantly refresh their image to align with the values, trends, and priorities of the next generations of consumers. While efficient digital shopping channels, optimized website and product page features, and excellent visibility are a major boost to modern retail- they will soon be the bare minimum. 

The proliferation of social media and countless product varieties has led to niche categories finding their way into the mainstream. This is largely due to effective market analyses and a close eye on consumer trends. This has been empowering brands to enter high-potential markets with product innovations that appeal to untapped demographics. 

Decoding Market Shifts With Data

The alcoholic beverages industry in the USA has over 300,000 regional and international players. These brands operate across DTC, eCommerce marketplaces, physical stores, and even digital embellishments and products in the metaverse.

As manufacturers take over greater control of their retail and sales strategies, the scope for promotional prices and modernized strategies increases. Leveraging data-driven decision-making empowers retailers to optimize discounting decisions and manage inventory. Brands that neglect modern technology such as personalization, data analytics, and automation are at a significant disadvantage, slowing the growth of platform development, marketing, and product innovation with antiquated strategies.

Developing Cross-channel Retail Experiences

Robust digital capabilities must develop at pace with eCommerce as a whole, as 81% of shoppers expect frictionless omnichannel retail experiences. This includes not only smooth operations but seamless personalization: saved addresses and delivery details, accurate recommendations, and pre-set payment methods. Further, market shifts are most prominent on digital channels. Accurate, updated consumer data best informs relevant product development and effective retail strategy. Without effective digital analytics, major brands could miss out on trends and sales opportunities.

Leveraging Digital Marketing

Maintaining a consistent online presence and digital marketing efforts can not only boost the visibility of brand storefronts, but provide retailers with modern, accurate data regarding share of search and on-site conversions. Tracking and monitoring sales data in real-time builds a directory of historic data, spending trends, and bestselling products automatically, empowering retailers to refine and strengthen their digital operations to grow margins.

Investing in Data-driven Product Innovation

Some key strategies utilized by major brands in the US market are new product development, mergers & acquisitions, and expansions. With reports and data regarding the rise of RTD (ready-to-drink) cocktails, for example, Diageo announced the acquisition of Loyal 9 Cocktails from Sons of Liberty Spirits company. Absorbing this high-growth RTD brand was an effective means of leveraging search and sales data. It enabled them to quickly enter the expanding market. Similarly, the growing preference for premium liquor has encouraged top brands to expand their product portfolios for the years ahead. Diageo recently acquired Don Papa Rum, a super-premium dark dum, and Balcones Distilling a super-premium whisky distiller. Further, the development and testing of new product categories are in progress, expanding leading brands’ reach into fresh markets.

With AI-powered solutions, brands may track competitor activity and sales data. This enables them to make informed decisions regarding sales strategy and brand experiences to entice customers to their digital storefronts. This allows retailers to protect the price points of premium products while maintaining steady sales. It also empowers stores to take charge of discounting decisions for mid-tier products to push inventory. 

Technology and data are going to be paramount to the success of the ever-evolving alcohol industry in America. The next few years are a critical window for brands to adapt to digital and develop long-term strategies for success. To help build your online sales channels with modern strategy and optimized features, turn to advanced retail solutions. And with automated, proprietary algorithms guaranteed to generate 99% accurate data in real-time, Intelligence Node’s 360’ solutions suite is the way to go. Intelligence Node is equipped with the state of the art technology and advanced retail analytics solutions are designed to boost your brand to profitability and beyond- book a demo today to learn more!

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