New research from the IWSR suggests ecommerce alcohol sales in the UK fell further in 2023, as post-Covid readjustments appear to be “nearing an end”.
According to the IWSR Ecommerce Strategic Study 2023, value sales have risen around 50% since 2019, but IWSR forecasts compound annual growth rate (CAGR) between 2022-2027 at -2% for the UK.
Guy Wolfe, head of ecommerce insights at IWSR said premiumisation will continue, but at a slower pace.
“Ecommerce is often used by drinkers in the UK to unearth premium and niche products, which should make higher-end spirits and wines most resilient in a depressed market,” he said. “Discovery segments such as tequila, Irish whiskey and premium rum are likely to be the hottest sub-categories over the coming years.”
Beer is widely purchased online, but spirits and wine are the main categories in ecommerce, the IWSR reported.
“As a more established category online, wine over-indexes versus the total trade,” added Wolfe. “Premium-and-above wines should prove most resilient over the forecast period, with standard-and-below wines expected to incur the heaviest losses, as drinkers drop out of the market due to financial constraints. Sparkling wine should prove more resilient than still wine as well.”
In terms of who is using ecommerce for alcohol, of those adopting the channel after the pandemic, LDA+ Gen Z is the largest age group. Millennials have increased their online buying frequency more than other consumer groups.
The main purpose of online shopping for older consumers is as an easy way to stock up and find special offers, especially for Boomers, the IWSR said. Purchases for special occasions/celebrations have increased, driven by LDA+ Gen Z using ecommerce.
“With cash-strapped shoppers facing double-digit price rises in many categories, ecommerce plays an important role in helping people seek out competitive prices,” said Wolfe. “But with discounters taking more share, this doesn’t necessarily translate to a direct boost in online sales. Consumers are becoming more selective, picking out deals and avoiding delivery charges. Loyalty card promotions are increasingly important.”