According to the International Wine and Spirits Research (IWSR), data shows that online alcohol sales grew by 80% in 2020 to $5.5 billion in the U.S. But while the alcohol category continues to grow at a faster-than-expected rate, the growth rate lags behind other consumption categories due to a mix of regulatory restrictions and limited consumer awareness.
It is estimated that $1.5 billion of online alcohol sales were lost in 2019 due to category under penetration, leaving brands plenty of opportunities to start optimizing their eCommerce channels and build brand awareness online.
With more people shopping online, now is the time for brands to shift to online marketplaces and new forms of advertising to reach customers.
Current Look at the Alcohol eCommerce Landscape
“The year shopping changed forever – When we look back at 2020 in the business world, we’ll remember it as the year online shopping stopped being the future of retail and became the present.” Jason Del Rey – December 29, 2020
The beverage eCommerce industry saw a 42% increase in 2020 compared to 11% growth in 2019. The “growth is largely being driven by the omnichannel segment as supermarkets and traditional retailers seek to rapidly enhance their online offering. On-demand players are also expected to gain significant share” according to IWSR. And there’s no sign that this trend will be slowing down any time soon, as the U.S. is forecasted to be the biggest alcohol eCommerce market, taking over China, by the end of 2021.
Content Best Practices
Yes, the market is accelerating and won’t be slowing down anytime soon. Have you invested in Instacart ads or are you thinking about doing so? Before you go and spend budget to make sure you’re showing up in consumer searches, it’s very important to take a step back and consider what you’re putting in front of your consumers. We know that complete and detailed content is a significant driver in what most shoppers consider to be the most important reason they’re adding a certain product into their basket.
- 67% of shoppers consider product images “very important” when making a buying decision.
- 73% of shoppers say that detailed product content is the number one reason they click “Buy”.
- 34% of shoppers buy from a different company than expected because of information they found online.
A Product Detail Page (PDP) is where all the data about a product comes together on a retailer’s website, including:
- Technical Specifications (Weight, Packaging)
- Pack Shots & Gallery Images
- Enhanced Content
- Product Codes
- Ratings & Reviews
- User Q&As
Fine tuning the nuts and bolts of your PDP matters because the primary goal is to drive consumers to add your product to their cart. Your PDP shares many of the same purposes as your shopper marketing efforts and packaging, and directly impacts relevancy, search engagement and conversion. Optimized content provides a significant opportunity for you to successfully merchandise your product to new and old customers alike.
You should care about, and invest in, your content because brands that focus on meeting Category Best Seller standards tend to see a 45-58% average lift in sales.
Key Optimization Tactics
- Maximize Visibility with Keywords – Include the right keywords in your titles and descriptions. Some places to get keywords are advertising tech platforms like Pacvue or you can search suggested terms directly through retailers’ sites. Then, be sure to incorporate those keywords into your content.
- Stand Out with Hero Images – Win the click by enhancing your main product image that displays on a search results page. Product labels can be hard to read, especially on mobile. You can optimize by adding size/flavor/varietal call outs.
- Merchandise with Your Carousel – Use the remaining image slots to highlight product features and benefits. Make every image count for maximum conversion by optimizing all your carousel images.
- Capitalize on Seasonal Moments – Try adding seasonal content to inspire shoppers during key periods of the year.
Advertising Opportunities and Rules Alcohol Brands Need to Know
The following are eligible retailers where you can advertise your alcoholic beverage products:
Beer & Wine – Paid Retail Media
- ShopRite (Wakefern)
- Mariano's (Kroger)
- Harris Teeter (Kroger)
- United (Albertsons)
Spirits – Paid Retail Media
With regards to beer and wine opportunities, CitrusAd recently reported that the alcohol category has seen 35% average Conversion Rate with a 300 - 400% average ROAS. While on Instacart, a leading wine company saw a 26% increase in total sales after they started advertising with Instacart featured products.
Spirits are a little more limited in terms of which platforms to find and purchase them from; however, the scaling opportunities for spirits are very promising on Instacart in particular. A leading spirits company saw a 77% increase in total sales after they started advertising with Instacart featured products. In terms of cost, advertising spirits are very affordable on Drizly ads with CPCs averaging $1.45 to $2.60.
How do you make sure that your brands are visible? Ensure your products are displayed where customers are looking! From an advertising perspective, you want to show up at the Top of Search. Top Rows = Prime Shelf Space. On Instacart, the first row is going to be featured and this means it’s a pay-to-play position. The way you get this prime shelf space is by bidding on a per click basis. On Instacart, 90% of purchases begin with search. And 80% of clicks are from the first page of search results, so if your products are not being shown on the first page then it’s extremely important to conduct pay-to-play bidding by paying to increase sales for a specific keyword, particularly when your products first launch or if they’re showing up on page 2 of search results. This is crucial for improving your organic ranking, as well.
Overview of Instacart Product Offerings
From a promotional standpoint:
- Featured Products (FP) is self-service
- Hero Banner - self-service is coming in October
- Coupons/Delivery promotions are owned by the retailers
How to Get Started on Instacart
It’s important to understand the Instacart ad model and what makes it so unique. Instacart has what we call “Dual-function Targeting”, which means that campaigns are simultaneously run as auto and manual campaigns. Campaigns surface ads based on bids at both the ad group and keyword level. It is also a 2nd Price Auction. From an advertiser’s perspective, this is very favorable and allows you to bid what you’re willing to pay, but your cost will be just above the next highest bidder. And finally, Instacart uses Exact Match Keywords only. Use your specific search queries, not just generic keywords, since Instacart uses exact match targeting only. Make sure you account for common misspellings and any variants of keywords.
Structure Campaigns by Product Segment
- Create Tiered Campaign Structures – There is a keyword limit of 1,000 keywords per ad group, but you can have multiple ad groups in a single campaign.
- Create Product Segments by Price Tiers – Create campaign structures around tiered pricing, so you can be more efficient with spend and maximize ROAS.
- Separate Campaigns for Club SKUs – Most manufacturers will have a unique assortment, enabling advertisers to have more visibility into the overall spend mix flowing into the Club channel.
Identify Appropriate Bid Levels
Set a Default Bid – Set a small default bid of $0.15 at the ad group level to minimize spend on auto-targeting and use higher bids on specific terms for manual targeting.
Bid Strength – Observe how the bid strength may change throughout the day and use those observations to help develop a dayparting strategy for your campaigns.
Minimum Bid – Enter minimum bid values of $0.15 for unwanted or low-performing keywords that show up from auto-targeting to minimize spend on those keywords.
Branded Traffic – Employ the same strategy for search queries with your brand terms if you want to primarily focus on non-branded traffic in your paid campaigns.
Optimize Frequently and Get Granular
- Create a set of rules – Set campaign-level goals to either maximize ROAS or total sales and adjust bids weekly or more to boost top-performing keywords.
- Employ bid modifiers – Use daypart bidding and platform bid modifiers to boost bids for the highest conversion rate.
- Set up alerts – Get notified if campaigns run out of budget, drop below your target ranking, or miss your ROAS goals.
- Keep an always-on strategy – Use dayparting and budget pacing to stay live, even after your competitors run out of budget.
Maximize Reach of Share of Voice
Uncover Gaps – Find gaps in your competitors’ bidding strategies that you can own with low competition.
Competitive Conquesting – Bid on competitor's brand terms; high conversion rates on Instacart make this tactic profitable.
Harvest Long-Tail Keywords – Use your segmented campaign structure to continuously add new, relevant keywords based on similar searches and likely conversions.
Win Top Placements – Save budget where you’re already ranking organically and spend to show up in top-of-search for your must-win keywords.
Win the online grocery surge and increase your sales with Pacvue, the leading platform to manage Instacart Advertising campaigns. Request a demo today!