Join us as we interview our distinguished speaker, Michael Boswell, who brings a wealth of expertise in Digital and eCommerce as a part of #BeyondBars.

Michael Boswell is the Vice President of Digital and eCommerce at Breakthru Beverage Group, a leading US beverage alcohol wholesaler. In his role, he is responsible for long-term digital strategy, the development and growth of Breakthru’s proprietary B2B eCommerce platform BREAKTHRU NOW, B2C eCommerce programming and growth, and digital marketing programming to the trade on behalf of Breakthru’s supplier partners.

#BeyondBars is an interview series started by USA Trade Tasting that covers challenges faced by the bar industry that go beyond the obvious. Let’s see what Mike has in store for us!

1. How has e-commerce changed the way consumers purchase beverage alcohol products?  

As of just a few years ago, buying beverage alcohol online was virtually unheard of. Those involved were early startups and some independents that would facilitate deliveries to local customers. Since then, accelerated by the pandemic, digital sales make up about 5% of total off-premise revenue for the US. With the advent of Drizly, Instacart, ReserveBar, Saucey, Wine.com and many others, consumers have many choices by which to purchase alcohol online. Even more so, up to 62% of total alcohol purchases are digitally influenced, which means that a consumer saw the product online but then purchased it in-store. So the digital presence of alcohol is now incredibly important to the overall industry and has changed the game with consumers.

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2. How do you see the future of retail evolving in the era of e-commerce and digital channels?  

I believe that as more retailers see the value of beverage alcohol, they will increase their focus on it, which is needed as there is a $1.4B gap between beverage alcohol’s share of grocery online vs. offline. Distributors and suppliers also have a role – ensuring that products are available, well-priced, and with high-quality digital content so consumers can purchase them online. I also believe that while eCommerce and digital channels will expand, most of those channels will remain 3-tier compliant both for regulatory reasons and because it’s simply smart business. It is not profitable to ship a <$20 bottle of wine or spirits to a consumer via a third-party shipper. Delivery from licensed retailers will ensure the product is legitimate and safe, that taxes are collected, and it’s far more efficient than intra or inter-state shipping.

3. What are some of the opportunities and challenges that local and regional craft brands face in the digital marketplace?  

Getting attention in the digital marketplace requires both organic messaging, such as high-quality content and messaging, as well as paid messaging across a variety of channels. Across the marketing funnel, early-stage or craft brands need to capture consumers, ensure they are aware of the product, and then get them to purchase it. Thus, in theory, a craft product could pay for a Meta ad to drive awareness, pay for email addresses to drive messaging to target consumers, and also pay for placement on a marketplace like Drizly or Instacart. Those investments can add up and it can make it difficult for small brands to break into the digital space. These brands need to find partners that can optimize their marketing spend in flexible, innovative ways to achieve success. At Breakthru, our Trident emerging brands team, alongside my digital marketing team, help smaller suppliers navigate these challenging waters.

4. Can you share how one should balance the needs of different stakeholders, such as suppliers, distributors, and retailers?  

As a distributor, we are a customer-focused company that is working to serve the needs of the end consumer on behalf of all of our partners. Our definition of “customer” could also include a supplier, as we serve their interests by selling and promoting their products. So as we build out our proprietary eCommerce platform, BREAKTHRU NOW, we need to think through all of those factors – we need to ensure the platform is relevant to the customer, helps them meet their end consumer, and meets the needs of our strategic supplier partners. It’s a nuanced exercise – we’re currently working on an AI solution to manage those diverse interests as we improve the merchandising of the site so that both revenue and previous orders and browsing history influence the customer experience.

5. How can digital marketing be used to drive engagement and sales for beverage alcohol products, given the industry's regulations?  

Honestly, there aren’t as many restrictions on digital marketing as many think, as long as you understand the regulations and restrictions. We leverage both B2B and B2C programming to bring our suppliers’ brands front and center to the trade AND consumers. From a B2B perspective, we leverage a 360 approach via eCommerce, email marketing, and social media while also amplifying our sales teams in the field. From a B2C perspective, we provide our sales teams with digital assets and goals to encourage their accounts to post on their consumer-facing channels and websites. We train our sales teams about the regulations, such as the regulation that supplier and distributor social media posts are considered advertising and need to conform to TTB requirements, so we remain compliant at all times.

6. Can you share an experience of an interesting or innovative digital marketing campaign that you were involved in executing for Breakthru's supplier partners?  

A recent whiskey-oriented digital program that Breakthru executed with one of our larger spirits suppliers. It was a 360-digital campaign we executed across our B2B and B2C channels to promote that supplier’s iconic lineup of whiskeys. On our owned B2B channels, we deployed customer-facing marketing content on BREAKTHRU NOW, email, and social. And our B2C teams were on the ground, in the markets, activating the program with our customers in the digital space and ensuring the product was in stock at marketplace retailers. The results were impressive—double-digit month-over-month sales increases for the supplier’s whiskey portfolio, significantly outpacing category trends.
 

7. What are some of the key trends and innovations that you are keeping an eye on in the e-commerce and digital space for beverage alcohol products?  

I think AI will have huge ramifications for the digital experience of beverage alcohol. The products customers and consumers see will be increasingly based on a more advanced algorithm that shows them the products that they are most likely to buy at that moment. Also, I’m seeing more B2C digital platforms that have stronger control of the customer experience when they are looking for luxury products – having a fancy bottle of champagne or bourbon delivered in a box with packing peanuts is not a luxury experience. Such models have regulatory challenges associated with them, but I believe they’ll figure those out to deliver an improved experience to the consumer.

8. How do you believe technology can improve the overall customer experience in the beverage alcohol industry, both in-store and online?  

Technology can make it easier to find what you want or even show you something that you didn’t even know that you wanted and present it compellingly. Technology allows us to collect actionable information about consumers and then act on that information to convert them to sales – whether it’s through geo-tagging, AI-driven recommendation engines, improved merchandising, or just product accessibility – technology is going to make a larger portfolio of products available to more consumers than ever before.

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