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“Right now there is the opportunity to really go digital, and I think brands are really figuring out ‘Can I be digitally native?’” said Duan on the Unpacking the Digital Shelf podcast, where he discussed the recent surge in ecommerce for alcoholic beverages.
Duan is the VP of ecommerce and digital commerce at Constellation Brands, and his emphasis on the importance of brands with a “digital DNA” has helped the company find success online.
“Whether you're an alcohol brand or a grocer, if you're not meeting the needs of the consumer — and you're kind of avoiding it, skipping it, or just sitting on your hands — you're going to miss out on this entire shift," said Duan.
Founded in 1945 as Canandaigua Industries, Constellation Brands became a Fortune 500 alcohol brand manufacturer of beer, wine, and spirits. Its brands include Corona Extra, Modelo Especial, SVEDKA Vodka, and Kim Crawford Wines.
As the market continues to shift amid COVID-19, Constellation Brands’ focus on digital transformation has helped them meet changing markets and buying behaviors with success — freeing its ecommerce team to focus on the future.
The three-tier system emerged after Prohibition was repealed. In the three-tier system, production, wholesaling, and retailing are separated. For example, a brewer, distiller, or winemaker sells to a distributor, who sells to a retailer, who sells to the end consumer. There’s a patchwork of rules to be navigated at the state and municipal level.
As an alcohol manufacturer in the U.S, Constellation Brands needed to scale an online alcohol business nationwide in the face of the three-tier system — complicated even further by COVID-19’s massive disruption of on-premise sales.
“It’s already difficult selling under the three-tier system, and now COVID-19 just exponentially raised the difficulty,” said Duan.
COVID-19 shut down on-premise sales leading consumers to buy off-premise. Together this presented a unique challenge for Constellation Brands. But despite these challenges, Constellation Brands was ready, as Duan understood the need for Constellation Brands to develop native digital DNA — and pushed for it across the organization.
Constellation Brands leverages the Salsify Product Information Management (PIM) system to organize their products for distribution on the digital shelf, which is an especially complicated task for alcohol brands. This helps ensure accurate product information is ready to go out all across its network of retailers and selling channels.
Salsify’s PIM system consolidates product information and digital assets from across the company into one easily accessible, trusted source of truth. This centralization can help teams focus on enhancing content and assets, instead of endlessly chasing the most accurate version.
Once product information and digital assets are loaded into a PIM system, teams can revise and edit content continually to meet shifting demand — an increasingly important feature for modern commerce.
In some ways, the opportunity has never been greater. As COVID-19 has forced so many people to shelter-in-place, there has been a dramatic surge in demand for alcohol — anywhere from 2X to 6X, according to Duan.
Salsify’s PIM platform helps Constellation Brands successfully meet these surges in demand.
Duan is now focusing on taking advantage of this uptick in consumers looking for alcohol online. For him, it’s all about gaining visibility for their brands when shoppers search. The in-store equivalent would be appearing at eye-level.
To that end, his team is looking ahead to the future by investing in new services like Instacart paid search and employing data intelligence. Understanding more about buying behaviors — such as the search volume for beer versus wine versus vodka — will equip his team with the information needed to optimize on the digital shelf to target their customers better.
Duan said “[pressure from COVID-19] has really ignited the leaders in the organization, and exposed and highlighted the ones that fear change versus the ones that fear not changing.”
The next generation of alcohol buyers are going to bring a digital-first mindset and lack of patience to their shopping. Brands must be prepared to meet these changing demands with a system equipped for modern commerce.
They must also evolve through better data intelligence, by experimenting with changes, and by accepting quick failure for being directionally accurate. These factors for success are what keeps Constellation Brands moving forward as they invest in digital.
Duan says COVID-19 has revealed which suppliers and retailers were prepared for this digital transformation and shift toward ecommerce, whether their fulfillment capabilities or how they think about the digital shelf and marketing. For their part, Constellation Brands is heavily investing in making sure they are ready.
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