The Media Determines The Culture

My friend Matt Jones from Four Pillars gin sent me a recent episode of Seth Godin’s Akimbo podcast about distribution that I devoured in the span of twenty minutes, then listened to an additional three times before sending it to all my closest friends in the industry.

Granted, Godin is talking about the distribution of media and information—more specifically how do we get people to pay attention to the messaging we want them to focus on—not the distribution of alcohol, but the overarching point is this: the way we consume products is ultimately shaped by the way those products are distributed.  

“Distribution determines the media,” Godin states at one point; “and the media determines the culture.”

Using the example of independent bookstores (at one point the focus of publishing sales), Godin points out how the limited number of spots on the retail shelf determined the marketing. Before the internet, book stores were the only way to sell books. “If you can’t make the booksellers happy, you’re not going to get a slot,” he begins; “You don’t get a slot, you’re not going to sell.”

Because of the limited shelf space, the sales divisions of these publishing companies weren’t selling to the everyday reader, but rather the bookstore itself. Get it into the store, then allow the bookseller to handle the promotion of the book to the customer. It’s no different than how distributors continue to pitch independent wine and spirits retailers today. Historically, the sales focus has revolved around winning over the buyer, rather than the end consumer. Let the retailer handle the promotion.

While the internet eventually shifted the publishing industry away from brick-and-mortar bookstores, the booze business remains caught between those two worlds. The internet is converting more of its customers, but the laws governing the sale of alcohol prevent the ease of distribution. Those who understand the complicated legalities of interstate shipping also understand that establishing an Amazon-like national retailer with consistent pricing from state to state isn’t likely to happen anytime soon.

Yet, in an era when a movie can be streamed instantly, a book can be transferred to a Kindle in seconds, and groceries can be delivered within an hour, today’s alcohol consumer is transitioning away from in-person shopping, even if today’s market is still operating with those expectations. While a brick-and-mortar retail license is still required for the sale of alcohol, consumers are moving further away from the brick-and-mortar mindset. 

Talk to any distribution sales rep in the industry today and they’ll tell you the same thing: getting the product placement is the easy part. Enticing the consumer to purchase the product (or pull-through) is the challenge, and that’s partially because wine and spirits retailers no longer have the influence they once did. What good is a retail placement if the product doesn’t eventually sell?

Much like readers no longer rely on Barnes & Noble for their recommendations, modern wine and spirits consumers are getting their information online or via social media before heading over to the store to make a purchase—if they even enter the store at all. More and more are opting for curbside pickup and delivery, rather than perusing the aisles for their selections. The marketing call to action happens on their phone or laptop, not at the liquor store.

This decline in retail authority is partially due to what’s called “the long tail,” a term coined by Chris Anderson in 2004 referring to niche products with low demand and sales volume that can actually increase profitability by pulling customers away from mainstream markets. As Godin points out: “Half of the titles that Netflix has ever rented, Blockbuster never ever carried. Half of the books that Amazon has sold, Barnes & Noble has never ever carried. As shelfspace gets longer and longer, there are more hits, but there are plenty of titles out on the long tail that aren’t hits and that are appealing only to a small group.”

Those of us who work in the booze industry are well aware of its hyper-expansion over the last decade. With so many new wines, beers, spirits, and RTDs on a monthly basis, it’s impossible for any one store to carry everything, which is where curation becomes important. However, with so many new products flooding the market, quality becomes more difficult to manage and selection becomes overwhelming, far beyond the ability for a small independent store to manage, let alone afford. As Godin points out: Amazon will carry every book, no matter what it is.

Because of the bevy of alcohol available on the long tail of today’s market, consumers can no longer rely on independent retailers to carry every product or even know about the products in their inventory. As a result of this shift, they do their research online before shopping. 

Despite this evolution, many brands still rely on distribution sales teams to handle their day-to-day business, expecting those reps to proselytize to the retailer buyers who will then convert their customers into purchasers. For those companies, participating in the actual sale of their product can seem redundant—especially when they’re incentivizing multiple parties to handle that side of the transaction for them.

While advertising for awareness is nothing new, a heavy focus on direct-to-consumer marketing isn’t necessarily in their wheelhouse, especially considering that spirits brands cannot legally sell directly to consumers. Yet, in this instance the market has shifted even though the distribution has remained stagnant.

“As we go forward, what we’re going to be looking at is a dance between two things,” Godin adds: “Independent voices talking to audiences that want to listen to them…and a realization that the distributor is us.” We are the people who will have to spread our own ideas, and we are “as responsible for that as the network executive or bookstore owner was.”

In the case of the wine and spirits industry, brands can no longer rely on the traditional conduits to handle their messaging, even if they’re still required for distribution. Brands must also connect with consumers directly, convert the call to action online or via social, and drive consumers to their partners of choice with impactful messaging.

“We are the distribution now,” Godin summarizes; “and we need to own the outcome that comes with that responsibility.”

-David Driscoll