Ecommerce is growing rapidly. Consumers increasingly purchase products online and expect prompt deliveries to their doorsteps. And while the world of alcohol might be slow in digitizing sales — whether due to legal hurdles or outdated thinking — modern customers still want to buy beer, wine and spirits online.
The ecommerce genie is out of the bottle for the beverage alcohol industry. Companies like Drizly deliver products to customers who order alcohol on their apps. Some retailers have created websites that excel, while other businesses ship directly to consumers. And with landmark cases like Tennessee vs. Blair, alcohol ecommerce will assuredly expand in 2020 and beyond.
For a deeper dive into this topic, and a look at where Drizly fits into the evolving ecommerce landscape, we recently spoke with Co-Founder Cory Rellas. Drizly currently delivers to 31 of the privatized states, and has a partnership with the Wine & Spirits Wholesalers of America.
Beverage Dynamics: Regarding ecommerce, we keep hearing the phrase, ‘Meeting customers where they are.’ Why has that become such an important talking point?
Cory Rellas: Look at the trends. Ecommerce is growing. Digital is growing. Extrapolate that out five years and we will see 10 percent of alcohol sales happening online. Pretty soon, the fastest-growing and most-profitable customer will no longer be shopping in your physical store, but online.
BD: Why do you consider the ecommerce customer to be the ‘most profitable’?
CR: Our largest demo is ordering significantly bigger basket sizes than people do when they’re in the stores. This is because many people use Drizly when they are hosting and having parties with friends and family. Think: NFL parties, or Game of Thrones-watching parties. They’re getting supplies for the party, and like the pricing and the convenience of getting something delivered.
Overall, our demo really does skew 50/50 male/female. And they’re largely social mavens.
BD: What products do you see bought most often online?
CR: It depends on the market. The interesting thing is that the big trends, you tend to see them a year or so ahead through ecommerce before they hit the brick-and-mortar. We had rosé and hard seltzers boom here ahead of the curve. Our orders are a strong indicator of where consumer trends are going. This is another reason that retailers who choose to ignore ecommerce are missing out.
Right now, we see that the health trend is the real deal. We’re seeing spikes in low-cal and no-alcohol products. And we’re seeing more local and small brands excelling versus macro.
BD: What are you seeing right now in terms of alcohol retailers using ecommerce?
CR: We’re starting to see a real benefit for those retailers who embraced ecommerce and are meeting the customer where they are, versus those retailers who have maintained the status quo. We’re seeing a real difference between the retailers who succeed and those who don’t.
The independent retailer needs to embrace ecommerce. Because when they do, the competing forces in the physical world really do get swept away. Suddenly you’re better equipped to compete with the grocery stores and big chain stores in a way that you were not before.
BD: The biggest criticism we’ve heard from retailers about Drizly is that the service — specifically making deliveries — takes up too much staff and time.
CR: It does take time. We get it: You’ll have customers ordering on the software on Friday night right when you’re the busiest. It can be a bit overwhelming. But we’re building our software to be even more seamless with your business so that you don’t get disrupted.
For instance, we’re trying to allow it so that when you do not have the staff or time for a delivery, it puts you in contact with third-party companies who can do the delivery for you.
Retailers are our primary customer. We’ve worked hard to build them a suite of software so they can build their own business through ecommerce. We want to have retailers succeed.
BD: What are your thoughts on the Tennessee vs. Blair ruling as it affects alcohol retailing?
CR: It raises more questions than it answers. You’re definitely going to have more states shipping across other states’ lines. And it’s going to chip away a lot at the legislation that protects independent retailers.
On-the-shelf retail has had a good run, but it has got to start thinking differently because the world is going to be different.
This interview was edited and condensed.
Kyle Swartz is editor of Beverage Dynamics magazine. Reach him at email@example.com or on Twitter @kswartzz. Read his recent piece When Will Consumers Understand American Single Malt?