Online Alcohol Marketplaces

Online Alcohol Marketplaces Use KYC and Age Verification to Keep Sales Up, While Keeping Minors Out

The magic of innovation means that once a technology, product or tool becomes mainstream, it’s difficult for people to remember a time without it. E-commerce and same-day delivery options are to be expected whether you’re buying clothing, household items, electronics, and now even groceries. While the online grocery store market has seen steady growth, COVID-19—as it did with many industries—dramatically shifted consumer behavior and, seemingly overnight, became the new norm. And yet, even for those grocery stores who were already operating online, there is one item on their shelves that presents a unique problem: alcohol. 

According to a RaboResearch report, online alcohol sales reached $2.6 billion in the US in 2019, up 22 percent. Despite this growth, the same report predicts that alcohol brands are losing billions of dollars in online sales opportunities and missing out on building digital relationships with their consumers.

The physical sale of alcohol is one area where the legislation is very clear. A legal purchasing limit is set. Age verification is required. Fines are actively enforced. In Europe and the US, alcohol can be purchased in grocery stores, corner stores, specialty shops, and even in some pharmacies. These purchases require a face to face interaction solely because of the age verification step. But while good innovation can feel like magic, legislation often lags behind, as is the case with online alcohol sales. Add in a global pandemic, social distancing, and isolation, and suddenly what felt more like an exception becomes the rule.

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In Germany, a system has been honed over the years that have in fact included the online purchase of alcohol. Wine or beer can be ordered and delivered to a private residence, but to receive the alcohol, a government-issued ID needs to be provided by the purchasing party and verified by the delivery person. Before COVID-19 hit, there were issues with deliveries being sent to locations like DHL boxes which meant the identity verification step could not be completed. However, by and large, the system was working, and it was working well.  

As COVID-19 spread, Germans, and citizens around the world for that matter, needed more space and less interaction. E-commerce and shipping providers began offering zero contact delivery in response. With no human exchange taking place at all anymore, what does this mean for alcohol sales? In the absence of updated nationwide regulations, the onus of how to navigate increased online alcohol sales has been left up to the individual shops. As it turns out, ensuring that alcohol is not being purchased and consumed by minors is much harder to regulate during a global pandemic.

More than money 

Underage drinking poses a number of risks. In the US, alcohol plays a role in over 180,000 injuries and 4,000 deaths annually. Selling alcohol online is more than a matter of profit or meeting economic demands, it is also a matter of corporate social responsibility. For any company that values protecting minors online, selling any product or service that could be classified within the vice industry—that is alcohol, tobacco, gaming and betting, adult websites—proper age and identity verification absolutely needs to be baked in. 

Retailers across Europe and the US, both large multinationals and smaller brick and mortar shops, can easily integrate a KYC solution into their online systems. Rather than implementing a basic age checkbox, an automated identity and age verification system can protect your business and your customers.

Authenteq allows you to verify your customers and their identity through any channel without compromising their privacy or security. The omnichannel solution is fully automated and provides verification within minutes. With desktop and mobile solutions, it can be easily integrated into the sales process without channel breakage to keep your customer retention and completion rates high. Of course, a KYC tool with manual verification of online sales is better than no KYC at all, but with the expected immediacy of online purchases, manual intervention is both costly and lengthy.

By implementing an identity and age verification process like Authenteq’s into your own solution, you can unlock new growth potential in a safe and secure way for all.

Looking ahead

COVID-19 has taught us many things, but perhaps one of the biggest lessons so far is how adaptable companies and consumers must be. Consumer buying behavior evolves over time, but it can also change overnight.

As e-commerce sales continue to grow across all sectors, the barriers to entry are, for now, harder for alcohol marketplaces. Those that see these barriers as a reason to not enter the space at all, will see profound consequences. Participating in the online ecosystem is necessary for brands to stay connected to their customers, but brands that also consider and incorporate their own corporate social responsibility goals into that online presence are much better poised to respond to changes, and flourish while doing so.

Are you ready to incorporate KYC into your own corporate social responsibility goals? Connect with one of our sales experts today to learn how Authenteq can help you reach them.