The world of alcohol ecommerce took another big step forwards this month with news that Uber bought Drizly. The largest ride-share platform on the planet now offers Drizly a fleet of opportunities in delivery and data.
What does this mean for the leading alcohol delivery company and its customers, and the broader trend of digital alcohol sales? For answers, we recently spoke with Dale Renner, founder and CEO of Redpoint Global, a specialist in customer engagement and data management.
Beverage Dynamics: What does this deal mean for Drizly’s customer base?
Dale Renner: It means more of becoming a one-stop shop. A lot of people see Uber as a ride-hailing service. But that business was down 50% in the past year. They’ve been changing their business into a delivery company.
Remember: Uber is not buying anything with inventory. It’s only the app. And underneath the app is all that data and consumer preferences.
That’s why Uber also bought Postmates. Uber is going to continue going down this path of only owning an app.
BD: So the key is data?
DR: They want the data about the individual, the person. They want to know your house, who lives there, what are your preferences, buying patterns, price points.
Drizly obviously also does this. Look left to right on their website, and you’ll have a hard time finding anything over $35. They can tell who they’re selling to. Those ads reflect back to the consumer base.
So these companies take all that data, and what they’re looking for is intent. If they can find out which household hosts the parties, then they have transactions with a lot of money. They’ll think about their relationship with that customer and make it more personalized, with the idea of creating sustainable profitable revenue growth. The data underpins that.
It’s all about the ease of use on the Uber app. The packing of that offer: if you’re buying beverages to be delivered, do you also need these foods? There’s cross-selling opportunities.
BD: What does this mean for beverage alcohol retailers?
DR: Like with all things, it means heightened ecommerce. After the pandemic, why would customers ever go back to buying things in-person, when they could just get everything delivered to them from the store?
From a retailer standpoint, you have to create an experience for people to come into your store. You have to create differentiation around your products and the social experience of customers. We at Redpoint Global have the tech to enable our clients to drive those personalized experiences. That’s what it’s all about: creating that perfect experience, frictionless, with relevancy. You have to be relevant to your customers on a consistent basis. We don’t want to shop at stores that don’t know us.
That’s why retailers should plug into Uber and Drizly to become the center of a customer’s buying universe.
BD: How does a smaller retailer accomplish all that?
DR: They’re going to have to figure out what they do about Amazon and Total Wine. Do retailers embrace and accept lower margins? Do they fight it?
Think about Total Wine versus a boutique shop. Nobody stops into Total Wine to see how the staff is doing, but they will do that for the boutique shop. And the boutique shop will help me find and learn about harder-to-find products.
I would replace my Total Wine experience with Drizly, because I’m buying commodity there. I won’t replace my boutique shop experience with Drizly, because I go there to get educated. It’s no different than with the boutique dress shop down the street from you. People still go there because of the buyer working there who’s in tune with what’s trending. And customers are going to pay a premium for that, too.
BD: Will direct-to-consumer trends continue after the pandemic?
DR: I don’t know where this tops out, but I do think it flattens a bit once we’re all released and can go out again. But this will definitely continue because it’s about the convenience of ordering online.
The pandemic has accelerated the digital transformation by a decade. We’ve turned a corner and it makes data and analytics all the more important. And companies today need singular control over their data. You can get very granular with how you talk to each customer. You always want to be informing that customer, and building that relationship.
BD: Where’s the DTC trend heading next?
DR: Think about digital sensors monitoring your wine cellar, or what’s in your fridge. Back in the day, the milkman came by and knew how much milk to leave at your doorstop by looking at how many empty bottles you had left to replace in the cooler. He would load up his truck ahead of time based on that usage pattern, and replace that number of bottles. That’s exactly what the digitally connected house will do. The more things change, the more they stay the same.
Digital connections will automatically manage your wine cellar, your booze cabinet and your refrigerator, because barcodes can be scanned. We’ll subscribe for deliveries, and place orders for special deliveries. This is the future for the entire industry.
This interview was edited and condensed for publication.