Why Consider Online Ordering | NBWA: America's Beer and Beverage Distributors

Even before the pandemic of 2020, beer distributors across the country had begun investing in and adopting online ordering platforms for their businesses. The onset of the pandemic amplified the need for online solutions as shutdown orders and the desire for contactless transactions grew across the country. As the beer industry looks to return to pre-pandemic growth, online ordering appears to be a fixture that is here to stay.

The adoption of e-commerce and online ordering platforms is certainly not unique to the beer industry. Young adults spend hours online every day, and online ordering has become the norm for consumers shopping for nearly any good or service imaginable. For businesses, business-to-business (B2B) e-commerce sales surpassed $1.3 trillion in sales in 2020, an 18% growth over 2019[1]. Additionally, more than 70% of all consumer purchases are now digitally influenced in some capacity.[2]

Fortunately for beer distributors and retailers, there are numerous benefits to using online ordering systems. Some of these benefits include:

  • By having an online platform available, distributors have an extension of their sales team available to retailers 24 hours a day.
  • Having an online tool frees up time for your sales personnel to sell more beer. With less time needed to count cases and take replenishment orders, sales representatives can use their time tasting and sampling products, driving brand awareness, sharing valuable data and promoting new offerings.
  • Online ordering systems can help with sales forecasts and order accuracy.
  • Orders placed online can seamlessly integrate into a distributors' backend Route Accounting System (RAS). Sales representatives still can review orders and catch mis-keyed order quantities, wrong items or over-orders before they are processed.
  • Retailers can view a distributor's complete item catalog, including new products, through online platforms. This means each time a retailer places an order, they increase their exposure to the distributor's portfolio.
  • Online platforms allow retailers to see discount levels and promotions as well as the current inventory status of items they want to order.
  • Customers will have access to product data, including images, brewery and brand names and product descriptions. As the BIECC is rolling out the beer industry Master Product Catalog (MPC), content for online platforms will be more consistent, accurate and widely available.
  • Having an online tool frees up time for your sales personnel to sell more beer. With less time needed to count cases and take replishment orders, sales representatives can use their time tasting and sampling products, driving brand awareness, sharing valueable data and promoting new offerings. 
  • For distributors, adding an online ordering option has the potential to save significant costs as well while driving top line revenue. The charts below show some examples of how much could be saved per account per month if sales representatives reduce the number of physical visits to an account by 50% because of the introduction of an online ordering option.

Pre-sell

Weekly Pre-Sell Monthly Visits
Salesman Stops 4
Total Time to Service 120 min
Time Spent Order Taking  108 min
Time Spent Selling 12 min
Cost to sell 4 x $45 = $180

VS.

✓5x More Time to Sell

✓50% Cost to Pre-sell

Online Ordering

Weekly Pre-Sell Monthly Visits
Salesman Stops 2
Total Time to Service 60 min
Time Spent Order Taking 0 min
Time Spent Selling 60 min
Cost to sell 2 x $45 = $90
Item Scenario 1 Scenario 2 Scenario 3
Salesperson annual loaded cost $65,000 $70,000 $75,000
Hourly cost $32.50 $35.00 $37.50
Stops per day 15 15 15
Cost per stop $17.33 $18.67 $20.00
Expense per stop saved (gas, maintenance, etc.) $1.00 $1.00 $1.00
Total savings per stop $18.33 $19.67 $21.00
Monthly savings per retailer $36.67 $39.33 $42.00

 

Over the years, beer distributors have expressed justifiable hesitation around some attempts at e-commerce growth. These hesitations include concerns about the perception of reduced service levels to retail customers as well as fears of marginalizing or even trying to eliminate the distributor's role in the overall distribution system. With so many examples of e-commerce negatively disrupting other businesses, it's essential for the beer industry to collectively work together to carefully consider the impact of any new business models on the industry. 

Thankfully, the adoption of online ordering platforms for retailers to utilize is the next advancement in a string of many industry innovations over the years. It's been more than twenty years since distributors started using Electronic Data Interchange (EDI) to simplify the invoice and paperwork process with retailers. Electronic Funds Transfer (EFT) has made the payment process quicker, easier and more reliable for thousands of retailers and Advanced Ship Notices (ASNs) have made the process at the backdoor more streamlined. Online ordering complements your existing sales and ordering processes, giving your retailers more options and making the entire process more efficient. 

In 2020, the BIECC hosted an education seminar focused on distributors building and expanding their online ordering capabilities. You can view the seminar here

 

This webtool is meant to serve as a follow-up to that seminar and a resource for distributors looking to implement or expand an online solution. The corresponding pages will focus on:

  • Which solutions are available to distributors, and what questions you need to ask before deciding on a solution?
  • What new responsibilities and preparations are needed internally within your business?
  • What retailers to target for online ordering, and how best to communicate with and onboard them?
  • Determining what analytics to measure and setting goals for your online sales

Special thanks to all of the BIECC brewers, distributors and associate members who contributed to this project. For more information about the BIECC, its' membership or current projects, please visit our website or contact the BIECC staff manager Dave Christman.

[1] https://www.digitalcommerce360.com/2020/12/01/gross-sales-on-b2b-marketplaces-will-finish-strong-in-2020/

[2] https://www.demandgenreport.com/resources/infographics/the-state-of-b2b-e-commerce-in-2020/

What Solutions are Available?
Retailer Interaction
Goal Setting & Analytics
Internal Distributor Onboarding