Once an option reserved for the very lazy, ordering booze online and getting it delivered to your doorstep is now how many choose to stock their liquor cabinets.
For consumers, alcohol-delivery via an app is yet another convenience of our on-demand culture. It also widens the business opportunities in this industry considerably. Popular as the alcohol industry may be, the alcohol industry’s business model is one largely untouched since the end of Prohibition, especially in terms of technology. And when it comes to offering delivery services, the complexities involved usually outweigh any benefits of starting an ecommerce and/or operation.
Thanks to a bunch of apps, that’s changing.
Currently, Amazon is using Prime Now to experiment with delivery services in Ohio and Washington. Postmates has operations in California. And Saucey, who recently raised $5.4 million in Series A funding, is just one in a slew of startups now involved.
It works like this: the service processes the order and payment via its app. Some companies provide the actual drivers; others even handle licensing matters. All of them simplify the transaction process between consumer and retailer.
Why now? A number of factors provide the right backdrop for doing this kind of business:
- Consumers now demand choice as a right.
With brick-and-mortar liquor stores, consumer choice is at the mercy of those who stock the shelves. That’s fine if you live near BevMo. But many have to drive awhile to find selection, or rely on whatever the nearest store chooses or is able to stock.
Companies in the alcohol-delivery app space pretty much all tout brand selection as one of their benefits. Drizly does it especially well, offering local and rare brands as well as the mainstream ones, through thousands of retailers. In an age where most of us exit an app within seconds if we don’t see something we want, nothing sells like giving consumers choice to make them feel in control of the transaction. Drizly’s proof of that: the company is currently in over 70 U.S. markets and also moving its way through Canada.
- Millennials are of age, and they buy booze differently.
In the U.S. alone, there are over 75 million millennials, and all of them are now of age. That explains some of the growth in the alcohol sector.
But it’s not just that more of the population can legally order booze. Millennials, especially those on the younger end of the generation, have more or less grown up in this button-tapping, on-demand culture, and they expect to purchase most, if not all, of their goods this way. After all, if dinner arrives from Seamless and your movie is on Netflix, why wouldn’t you get the accompanying wine without ever having to leave the house?
- It’s a lower-risk way to do ecommerce.
With many alcohol-delivery services, the overhead is low and the risk much less than traditional hospitality businesses, especially for the retailers themselves.
Saucy handles everything from order processing and payments to couriers to scanning IDs upon delivery. Minibar, one of the bigger players on the market, doesn’t provide its own drivers, but it handles just about everything else. It will even deliver you a bartender, should you need one for your event. All the liquor store has to do is provide the booze and, occasionally, the drivers.
And, for both the liquor store and the service handling deliveries, this business doesn’t hang on the state of the economy. Alcohol-related industries may not be fully recession-proof, but they are generally “recession-resilient,” the 2008 recession being a prime example. If you want to dip even further back in history, part of the reason alcohol was legalized again in the 1930s was because many believed it would create jobs during the Great Depression.
- It’s an easy branding opportunity.
If you’ve gone anywhere near a marketing department in the last five years, you’ll know that everyone from Tesla to the local pet store is trying to figure out how to grow a brand using content. Beer, wine, and liquor brands are getting a boost here from many of the alcohol-delivery service apps, who offer users a kind of education about their drinks.
Thirstie, for example, has a slick blog full of features and interviews that sell a lifestyle as much as they sell vodka for the party. Liquor brands that partner with the company can do the same, without having to allocate budget towards their own content teams. Other apps include seasonal recipes, facts about making beer or spirits, and other information that educates customers and makes them more likely to return.
Sure, certain parts of the alcohol-delivery model are still complex, and no business is completely foolproof. Alcohol-related industries are heavily regulated, which means it takes more steps and organization to get a business off the ground in this area. Some states, like California, are pushing for more legislation around regulating alcohol-delivery services. In other states, it’s still illegal to ship any alcohol.
Solving those challenges should prove one of the more interesting moves these companies make over the next few years. Whether that’s through more apps or an entirely new process or technology remains to be seen. You can be sure of one thing, though. The ones who can offer selection, education, and convenience in one place will be the ones on constant demand, whether it’s to explore the latest tastes in whiskey or stock the house for that last-minute dinner party.