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According to a detailed report issued by ModernRetail's Mitchell Parton, alcohol sales are in a bit of a slump right now -- at least partially driven by younger Americans drinking less than their predecessors -- and a slew of retailers have launched alcohol rebate programs to help shore up sales.
"In recent months, a flood of retailers have launched alcohol rebate programs, including Circle K, 7-Eleven, Speedway, Chevron/Texaco ExtraMile, Giant Eagle and EG America," Parton wrote.
"Many, if not all, of such announcements have been through partnerships with the retail technology company Swiftly. The company develops digital platforms for grocers, convenience stores and wholesale suppliers," he added.
With BofA data suggesting that spending at liquor, wine, and beer stores had tumbled by 5% YoY this past January, it may come as little surprise that Swifty -- over the course of the past half-year -- expanded its alcohol rebate programs from ~11,000 stores to over 33,000 locations spanning 44 states.
Gen Z Key Demographic Targeted by Digital Rebates on Alcohol Purchases
It appears that Gen Z consumers are the key demographic targeted by the expansion of digital rebates centered on alcohol spend, both because this is the age cohort which appears to be tuning out on alcoholic beverages compared to older Americans and also because they're less likely to engage with physical mail and coupons.
As a matter of fact, per Swiftly co-founder and CTO Sean Turner, the company refers to the rebate as "alcohol cashback" offers rather than "rebates," as younger buyers may be less familiar with the latter term.
“They haven’t experienced the world where you actually get a mail-in rebate, where it comes in a box and you find an envelope and you mail a letter,” Turner said.
“A lot of your Gen-Z customers rarely even open their own mail, let alone send mail-in rebates of their own. And so, having a digital-first solution for that shopper base is a really important key to being able to engage them," he added.
Other notable points pulled from the report:
- Rebates are funded by manufacturers rather than retailers, and come in all sizes -- from 50 cents to $10 off.
- Retailers are suggesting that there is an average 30% sales lift when a manufacturer puts forth a rebate. Basket sizes including an alcohol rebate offer are significantly larger -- to the tune of 62% larger -- than those without one.
- States vary in terms of laws allowing these sorts of rebates, with spirits, beer, and wine often being divided into discrete categories of eligibility.