Technology shapes the present and the future, creating an ever-evolving landscape of change. As we all turn to our devices that keep us connected in an increasingly hectic world, business continues to advance alongside us. This is no different for the beverage alcohol industry. But trends come and go, certainly at an accelerated rate these days, and only time will tell which will become mainstays.
Which trends can you trust? We at Beverage Dynamics know that retailers are eager to try out the newest advancements. So we spoke to some of the galvanizing forces behind all these advancements to see how the industry is changing, and what the future for beverage alcohol retail technology may hold.
The move to mobile has crossed all industry lines. Thirstie is one company we spoke to that is taking full advantage of this migration.
“Consumers are central to driving trends within tech,” says Devaraj Southworth, CEO and cofounder of Thirstie. “Now, on the heels of a two-and-a-half-year pandemic, they are more mobile than ever. With that, consumers are purchasing almost everything Ôon the go’ through their mobile devices. This has fueled the need for an improved and optimized checkout flow.”
While the move towards mobile has been years in the making, like many other modern trends, it has been hypercharged by the Covid-19 crisis.
“The pandemic accelerated the modernization of a historically old-school, sleepy industry, resulting in retailers more willing to adopt new technologies to help them solve age-old retail problems,” says Cort Ouzts, president of POS Nation, a company dedicated to point-of-sales solutions for small businesses. “One trend we’ve seen is an increasing desire for retail owners to connect with their customers. The small retailers that survived the pandemic were able to effectively communicate with their customers and humanize their business.”
“It’s the exact same mentality as the shop local movement that we’ve seen for the past several years,” Ouzts adds. “Retailers are embracing technology and new mediums to expand their presence and voice.”
Technology has facilitated the rise of mobile purchasing, with even sales at bars and restaurants now utilizing digitization.
“Digital payment has become a baseline expectation in hospitality,” says Nancy Trigg, president of the POS provider Arryved. “Whether via QR codes, a mobile payment app or a virtual wallet like Apple Pay, today’s guests expect their on-premise experience to be tech-enabled. Bonus if they can order to their table, bar seat or lounge area via their own devices. Folks who didn’t sell online or to-go now do, and as some businesses closed their doors, others seized the opportunity to purchase turnkey businesses to expand.”
Digital payment doesn’t just apply to the customer experience. As B2B purchasing grows within the industry, new digital solutions are cropping up to address potential pitfalls.
Igor Ostrovsky founder and CEO of Koverly, highlights some of the trends he’s seen. “B2B commerce for beverage alcohol has started to take root. Progress is being led by technology companies that simplify operations to allow businesses to work faster and buy smarter. Conversely, there is also a trend among beverage alcohol businesses to create their own proprietary or ‘offÐthe-shelf’ B2B ecommerce and payment solutions, and this is taking efficiency backwards.”
These days, it feels like all we can talk about is the pandemic when it comes to discussing novel challenges. Obviously, the pandemic itself has been the largest hardship the world has had to confront in recent years. But the health crisis has also created many smaller hurdles in the alcohol industry.
“Two of our biggest challenges have been supply-chain obstacles and market awareness,” says Ouzts. “Like seemingly everyone else in the world, we have, at times, been simply unable to deliver our product to our customers as quickly as we’d like.”
“The second challenge we’re facing is market awareness of our product,” Ouzts adds. “There are a few extremely large point-of-sale companies in the industry that possess significant brand awareness in a variety of markets. These solutions tend to be more generic so they can serve a wide range of industries — rather than specializing in specific business types and understanding those customers’ specific needs.”
Market awareness is perhaps a bit more unique to the digital solutions and ecommerce side of the alcohol industry. Businesses understand how to launch and advertise a new spirit, wine or beer option. But companies such as Thirstie need first to educate the industry before marketing their product.
Southworth acknowledges this, commenting, “The challenges we have faced stem from a lack of industry knowledge around what ecommerce is and how it can best be utilized to grow a brand. For a long time, there has been a notion around e-commerce in beverage alcohol that ‘if you build it, they will come.’ However, as any marketer will tell you, there is a level of effort that is required from brands to drive consumers to their webstores.”
All the companies we interviewed are working to solve problems that retailers face on a daily basis. These include a host of issues, such as building a digital presence, measuring consumer data in real time, optimizing stocking levels and enhancing customer service.
Point-of-sale companies POS Nation and Arryved have carved out niches for themselves within the industry.
“POS companies have earned a reputation for manipulative sales tactics, disappointing support and costly, slow-to-innovate technology. They put their own bottom-line ahead of the best interest of merchants and guests,” says Trigg. “Arryved set out to reset expectations on what a POS partner could be. We’re community builders who prioritize relationships over transactions. We build features designed to improve the guest and staff experience — eliminating admin tasks for staff that give them more time to get to know their guests. Our pricing model is designed to support customers in building the best possible business.”
“The issues POS Nation is solving are directly related to the trends we’re seeing in the industry,” says Ouzts. “We’re automating many of the old, manual processes of running a beverage retail store. Our software integrates with most beverage distributors and automatically updates stock levels when products are delivered. Our software also uses artificial intelligence to optimize stock levels. It will automatically identify the increase in sales volume and suggest ordering more. The common theme in all these process improvements is that we are eliminating the need for extra staff through automation.”
This automation is in service of facilitating communication, according to Ouzts. “We’re helping business owners communicate with their customers. Our software has a built-in loyalty program and allows businesses to tailor the text messages they send an individual customer based on that customer’s buying behavior. This personalization of highly customized messages helps small businesses humanize themselves.”
Thirstie works to help retailers expand their online presence and get products into the hands of eager customers, even in the era of social distancing and shutdowns.
“Thirstie’s network of licensed retailers are fully integrated through our proprietary technology, and our platform helps increase revenue for retailers without having to perform any marketing services for their stores,” says Southworth.
Thirstie also provides valuable insights to retailers. “Consumer data is at the forefront of what Thirstie offers. Historically, given the three-tiered system, brands did not have access to data. We provide brands with user data (who is purchasing, what they are purchasing, how they are purchasing) attribution data (where consumers are coming from) and behavioral data (how consumers are interacting with products and the overall digital experience).”
“Thirstie also provides our brand partners with persona-level data, essentially creating profiles for each consumer type and breaking down where they live, how much money they make and what type of shopping experience they prefer,” he adds. “This allows brands to not only more effectively reach new consumers, but the right type of customers and the opportunity to re-target consumers with new offerings and products.”
City Hive is another company making full use of customer data. They provide full package ecommerce solutions to businesses. “In many cases, beverage retail owners do not have the time or expertise around implementing ecommerce and marketing experiences into their day-to-day workflow,” says Monika Figura, Director of Customers Success. “City Hive has been able to solve this problem by offering website and app builds, automated weekly marketing programs that highlight the stores best sellers and an easy way to implement online promotions and loyalty programs with minimal effort. In the near future, professional design, marketing and advertising services executed by experts of our platforms will be available to add on as a feature of the platform.”
Koverly targets necessary B2B transactions within the industry. “Koverly saves businesses time managing bills and increases profits and cash flow with more time to pay,” Ostrovsky says. “[The company] also reduces the time businesses spend paying bills with streamlined accounting automation.”
We have only touched on the beginning of what technology is poised to change within the industry in the years ahead. So, what’s next?
According to Southworth, “The demand for branded ecommerce webstores will certainly continue to increase. While online marketplaces will always have a place in our industry, brands will more heavily invest in their own digital storefronts and experiences.”
Nothing will ever replace the in-person experience of going to your local beverage retailer to talk about different flavor profiles or hard-to-find bottles of whiskey. That experience is as much why local retailers exist as anything. But that doesn’t mean beverage retailers can ignore the changing landscape in front of them, cautions Ouzts. “The common denominator for successful solutions is that they must be easy to use for consumers,” he says.
Trigg puts it succinctly: “We see the future of ecommerce as being deeply connected to the onsite experience for merchants of all shapes and sizes.”