Pernod Ricard primes plan to dominate drinks ecommerce space
Pernod Ricard is to focus on growing its ecommerce presence for its UK business over the coming months, a space the drinks business said has yet to be dominated by its competitors.
The maker of Absolut and Chivas, is “in discussion” with various ecommerce partners to bolster its existing nascent ties with Amazon alongside partnerships with retailers such as Tesco and Asda.
Speaking to The Drum at a media event in London today (2 September) managing director of Pernod Ricard UK Denis O’Flynn said ecommerce will act as a key strategy for the drinks company over the coming years.
“We see a shift from what I would call standard bricks and mortar to online purchase,” he said. “We don’t believe that anybody else has taken lead in this particular sector and there is the opportunity for us to get into that area.”
Pernod Ricard currently has two of its own standalone ecommerce platforms – Sipstor and Bar Premium – but believes working with partners will stimulate sales growth and help it own the sector.
“We are talking to a couple of potential partners to see how we can progress,” continued O’Flynn. “The key thing that I’m noticing is that you are going to have to do things differently to be looked at in a more collaborative approach.”
To battle the challenges involved with attracting consumers to buy products online rather than in-store, Pernod Ricard will focus on producing content to generate an ongoing conversation and educating consumers about its ecommerce presence to deliver clicks.
Consumption moments
A new approach around consumption moments is about to be rolled out across 80 per cent of the business, which will see the market segregated by occasions rather than category which chief financial officer Gilles Bogaert said will bring new opportunities for Pernod Ricard’s brands.
“We used to break up the markets by category but I think it’s more powerful to do it by occasions because at the end of the day a consumer can drink an Absolut or a Ballantine’s in the same day but what is important is, is it at home, is it in a bar, is it in a nightclub?
The strategy has already paid off in Spain where Pernod Ricard has managed to shift the focus of some brands from one occasion consumption to another. “Some occasions were too crowded by too many brands or we were not selling the right occasion,” added Bogaert. “This new segregation of the markets will highlight new opportunities for us.”
Despite missing forecasts for its 2014/2015 full year results, Pernod Ricard pulled in sales of €8.56bn, a 2 per cent rise from the year before. In terms of categories, growth was driven by whiskies with a continued strong performance of Jameson, The Glenlivet, Ballantine’s and its Indian whiskies.
However, it continued to struggle with its Absolut vodka brand in the US, with Pernod Ricard admitting it needs to improve its marketing efforts to communicate the brands provenance to millennials.