Nearly 80% of US households already shop on Amazon, meaning it's about as penetrated into the marketplace as it's going to be. As a result, their growth is coming from getting their existing consumers to visit more often, according to shopper insight provider InfoScout.
In fact, the main growth driver for the e-commerce giant is trip frequency. The typical Amazon shopper makes about 2.4 trips per month to the website with a basket size of about $38. Amazon's membership programs drive up frequency. Amazon Prime members visit about 3.4 times per month with a similar basket size of $38.50. Subscribe & Save members visit even more frequently at an average of nearly 6 visits per month, and the basket size is still fairly large at $33.69.
"Our total spend doesn't change much, but the number of trips goes up and up," said InfoScout senior director Bob Jennings at the recent WSD Summit. Year-over-year, those trips stole another one trip per month from brick-and-mortar retailers.
In the future, trip frequency will still be important, but more growth will stem from consumers buying more categories from Amazon and increasing share of category spend, according to InfoScout.
A typical household buys more than 150 categories in-store on a yearly basis, but only purchased 15 categories from Amazon in 2017. But that number is growing in the double digits, up 31% from 2016. And once they pull shoppers into a category, nearly 40% of what a consumer typically spends in that category (in-store and online) shifts to Amazon.
TARGETING ONLINE WINE SHOPPERS. Currently, Amazon only captures about 2% of online alcohol sales, so they've still got a ways to go in that category. Capturing the consumer that buys wine both in-store and online is a big opportunity, according to Bob.
Consumers who buy wine in-store only have a total buy rate of about $130 a year, spend about $17 per trip with a frequency of about 7.6 trips. While consumers who buy their wine in-store and online, spend doubt $355 a year, with an average spend of $23 per trip and make about 15.3 trips total.
He noted that in-store/online wine shoppers only account for about 0.5% of all households, but "our prediction is that [Amazon] will continue to try to find ways to drive that number up because they know that it's just a very valuable household to try to get."
FIRST BEVERAGE FINANCIAL MERGES WITH CASCADIA CAPITAL
First Beverage Group's investment banking division First Beverage Financial has merged with Seattle-based Cascadia Capital. The transaction closed yesterday, per a release.
This merger helps middle market investment banking firm Cascadia get into financing and advising more brewers, distillers and winemakers. For instance, First Beverage executed more than 25 beverage deals in the past four years, 18 of which were in the craft beer industry.
"This partnership provides the ability to deepen the level of service offered to our existing client base and enables us to continue our purposeful expansion into additional beverage industry segments," says First Beverage founder and ceo Bill Anderson.
"The combination unites two highly-successful and specialized investment banking practices, accelerating our shared strategic growth initiatives and enhancing Cascadia's coverage of the consumer landscape," says Cascadia chairman and ceo Michael Butler.
Bill will join Cascadia's board of directors and all other First Beverage Financial employees will also join the Cascadia team.
DIAGEO NAMES NEW GM FOR CASCADE HOLLOW DISTILLING CO. Nicole Austin has been named the gm and distiller for Cascade Hollow Distilling Co., formerly called the George Dickel Distillery. Cascade Hollow is now the home of George Dickel Tennessee whisky and future innovation spirits. Nicole previously worked at The Oak View Spirits consulting firm with Dave Pickerell and most recently worked for William Grant & Sons at the Tullamore distillery in Ireland.
NEW ZEALAND'S VILLA MARIA NAMES NEW CEO. Abe Salt has been named the new ceo of Villa Maria, which is imported to the US by Ste. Michelle Wine Estates. Villa Maria founder and current ceo Sir George Fistonich is stepping down but will continue to have a hands-on role as president, per a release. "This will allow me to concentrate on my global brand ambassadorial role and drive other large projects such as the development of our new winery and retail center in Hawkes Bay," says George. Abe joins the company with more than 15 years of industry experience, most recently he worked as principal at Iron Gate Consulting and before that worked at Treasury Wine Estates. In his new role he will manage the day-to-day operations and strategic priorities for the company. Abe will report directly to George.
LUXCO DEBUTS TWO NEW FLAVORS TO RTD LINE, AND ARROW SCHNAPPS. Luxco is launching two new margarita flavors to Salvador's, its line of ready-to-drink margaritas: Spicy Lime and Top Shelf Strawberry. The margaritas are bottled at 30 proof. In addition, Luxco is also launching Arrow Super Cinnamon Schnapps. The schnapps is bottled at 100 proof and available in 50 ml, 200 ml, 375 ml and 750 ml offerings.
WAL-MART MEAL KITS NOW AVAILABLE FOR ONLINE SHOPPERS. Wal-mart customers can now order meal kits through its online grocery pickup service, per TechCrunch. Consumers can order online for pickup or delivery, where available. The meal kits are meant to serve two people and range from $8 to $15. They are currently available at 250 stores, but the company plans to expand the service to 2,000 locations by the end of this year.
STARBUCKS OPENS FIRST RESERVE STORE IN HOMETOWN. Last week Starbucks opened the first of its Reserve stores inside its headquarters in Seattle, per CNN Money. You may recall, the Starbucks Reserve stores are a high-end concept selling beer, wine and spirits [see WSD 01-06-2017]. The plan is to open another 1,000 locations.
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