StateWays - May/June 2016

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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StateWays n n May/June 2016 52 the ADVISORY COMMITTEE WEIGHS IN pinpoint precisely when it started, for convenience and to frame it gener- ally, we look at the time the iPhone was launched. Many would say that mo- bile is the biggest techno- logical shift the world has witnessed since the indus- trial revolution. While we still do not know the full extent of how this technology is going to evolve and influence even greater change, we do know for sure that smart phones – mobile devices – have fundamentally changed the dynamic between consumers and the entire consumer goods supply chain. What is so significant for business is how cen- tral people's mobile devices are in their lives. For one, these phones are connected strongly to their social lives. Consumers proactively share details about themselves on social media. And each day around the world, people use their mobile phones 100 bil- lion times to check in with friends and to plan their daily lives. People are also fi nding love through their devices, by downloading an app and swiping across their phones to see if there are any suitable matches nearby. Consumers are also using their devices to live more spontaneously. Apps like WingIt and Yplan can uncover cool events in your city in one thumbprint. Events like a brunch and terrarium class, an interactive art party with drinks, a superhero tour and a Brooklyn graffi ti tour are just a few examples of the types of activities available in New York City during a recent weekend, which someone could quickly fi nd and plan to socialize around. This kind of click-of-a-phone reliance has implications for how we market our products and how trends are started. Consumers raised in a culture of perpetual connection are accustomed to having information at their fi ngertips and, increasingly, are demanding convenience in every aspect of their lives. This growing cohort of consumers – 70 million LDA Millennials – behave differently, purchase differently and seek different experiences from their choice in brands than previous generations. There are 6.6 billion searches for alcohol per year on Google alone. Consumers are there – and we should be, too. E-commerce is currently less than 1% of off-premise alcohol sales and, if we use grocery e-commerce as a proxy, it is pro- jected to be 13% by 2020. Innovation in digital functionality will offer ease and im- mediacy, and consumers have come to expect this. This con- sumer evolution — or revolution — is real. It is exciting. And it's moving at warp speed. ADAPTING TO THE DIGITAL CONSUMER How does our industry adapt accordingly? We have two choices: wait to see how things evolve and look to optimize our position, effectively hoping we can keep up, or shape how our industry and our brands participate in the brave new world of commerce and convenience. As an industry, we have shown that we can adapt, change and prevail. We have changed a lot in recent years and, as an industry, we have had major successes. This moment of revolutionary change among consumers is another moment for us to show how we can continue to adapt and win. We must be creative, authentic and (of course) re- sponsible in how we access consumers in the digital space. While we will always oper- ate within the parameters of our three-tier system, we must think fundamentally differently about e-commerce. We need to be thoughtful of the changing consumer demographics. We have an opportunity to show that our industry is a dynamic and innovative par- ticipant in consumers' lives, de- livering the most relevant and exciting propositions for con- sumers at the right places, at the right times and at the right price points. The mobile trend is already making its way into the con- trol states. The Pennsylvania Liquor Control Board's (PLCB) Fine Wine & Good Spirits app, initially launched in 2011, has helped Pennsylvanians make consumer choices for several years now. Other examples of control markets adapting mobile technology can be found as well, and NABCA is no stranger to mobile either. From Diageo, you can expect to see changes in the way we engage with consumers in digital through new platforms and content. We are evolving our marketing to cre- ate fi t-for-purpose content and investing ahead in capabilities and consumer understanding. This consumer change is ours to seize or ignore. We have all seen what happens to businesses that have chosen to stay stuck in the past, rather than reach for the future – businesses such as Blackberry, Kodak and others, and we must learn from them. If we don't – well, consider Charles Darwin's words of wis- dom: "It is not the strongest of species that survives, nor the most intelligent. It is the one that is more adaptable to change." Here's to the future of mobile technology and our industry's role in it! "It is not the strongest of species that survives, nor the most intelligent. It is the one that is more adaptable to change." —Charles Darwin (English Naturalist 1809-1882)

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