Among the bev/al companies with at least 1% market share, the median e-commerce team has grown to seven in 2022 from three in early 2020, according to Rabobank. Not surprisingly, the early movers rated themselves as more capable, but "as long as leadership doesn’t take their foot off the gas, late movers will close the gap with their more prescient counterparts," Rabobank analyst Bouchard Nesin writes in a new report.
While it's true that big companies can afford bigger teams, that doesn't mean that only big companies can win online. "Smaller brands don’t have to outspend larger competitors on their e-commerce teams to see the benefit of higher self-ratings. Instead, they only have to outspend or out-hire similarly sized businesses," Nesin writes, adding: "Smaller firms are often more nimble and have fewer institutional silos to navigate."
One place where additional e-commerce staffing really pays off appears to be a brand's consumer insights capabilities. "Smaller teams feel they simply cannot afford to hire someone to manage insights and instead have to dedicate all available resources to actively managing major accounts and marketing campaigns. If insights are the key to making smart decisions, then hiring an insights manager is a smart decision."
An insights manager is critical, the report says. Without one, e-commerce teams cannot improve their performance over time.
Beer and spirits suppliers attempts to build a direct-to-consumer capability are severely restricted, the report says, "essentially making it impossible for these companies to operate a large-scale DtC business." As a result, wineries believe they are better at managing DtC sales.
There are opportunities for beer and spirits brands – "if they are willing to get creative." The report notes that the maker of Tito's Vodka has never launched a seltzer or RtD brand extension. But in the summer of 2022, it did release "Tito's in a Can," a limited edition, insulated, refillable can poking fun at “the never-ending flood of seltzers and canned cocktails being introduced into the market.” The limited-release cans sold out in a week.
Rabobank recommends beer and spirits suppliers optimize their merchandise business to engage their most ardent fans, identify new ones and collect data to make other marketing efforts more effective.
One major problem for everyone, not just bev/al e-commerce teams, is legacy programs. "Updating them can take years and cost a lot of money, far more than it would cost to start from scratch. These additional costs of dismantling and updating legacy systems is called technology debt, and while e-commerce teams may feel these challenges more acutely, they are by no means a unique problem," the report says.
For example, many commercial airplanes are still receiving software updates and route planning with floppy disks. And a major cause for delays in the New York City Subway is a constantly failing network of signal systems built before World War II." Outdated technology was also blamed for the meltdown that afflicted Southwest Airlines during the Christmas-New Year's holiday period.
To solve this, Rabobank recommends embedding IT personnel in their e-commerce operation and beyond.