Drizly isn’t here to disrupt the three-tier system. Rather, as Cory Rellas, the COO of the booze-to-your door delivery app tells it, the company operates in the name of “accelerating the status quo.”
Drizly works like this: a legal drinking age consumer pulls up the app on their smartphone or computer, places an order for alcohol, and one of the company’s retail partners delivers it directly.
“We don’t touch money and we don’t touch alcohol, so at the end of the day we can say we’re not part of the alcohol industry,” said Rellas during a talk at the Brewbound Session in Chicago last week. “We don’t take a percentage of sales. It’s all about not being a part of that transaction.”
Instead, Drizly aims to add value to the space by propagating mobile e-commerce, a digital marketplace that has become entrenched in other industries but has yet to take root in the alcohol category, according to Rellas. It’s a simple enough model, though Rellas sees it adding tremendous value to all three tiers of the industry.
For retailers, Rellas told the Brewbound Session audience of nearly 200 that the proposition is an easy one.
“We’re bringing incremental profit, incremental consumers of a kind they wouldn’t get in the store,” he said. “The mix of product selection due to who we’re attracting, the average order size is three to four times higher – these are profitable consumers that any store would want to have.”
Rellas added that distributors could take solace in the fact that the company seeks to open up a new lane to the consumer.
“We’re three-tier compliant,” he said. “You’re in a $100 billion off-premise alcohol industry and only 1 percent of that, maybe 2 percent is e-commerce related. I’d like to think that’s going to 10 to 12 percent.”
For suppliers, Drizly presents many opportunities. “One, we know a lot about our consumers,” he said. “For the first time, you can control how your product is merchandised on a digital shelf. For the first time, you have the ability to influence the consumer at the point of sale in a three-tier compliant way.”
To date, he said the company has been most simpatico with craft brands on the beer side because they launch in new markets similarly.
“We are fighting to establish capacity, distribution and consumer awareness in a way that makes sense for all parties involved,” he said.
He did add, however, that it could make sense for Drizly to eventually partner with the likes of a Anheuser-Busch InBev or a MillerCoors-type supplier on future consumer engagement initiatives.
Drizly is currently only available in 17 cities, works with nearly 200 retail partners and is boasting around 30,000 downloads a month, according to Rellas.
Looking ahead, he said the company plans to build out “the largest and most sophisticated” retail partner network of any e-commerce booze delivery service, continue to improve the app’s technological function to make delivery “efficient, reliable, and profitable,” and drive consumer awareness through marketing.
To that end, Rellas noted that there has been a shift from physical to digital advertising, with some of the heavy hitters in the beer industry allocating more and more of their resources to developing a digital platform.
That nexus between a digital shift in attitude and open roads ahead leaves Rellas optimistic about the future of e-commerce as it relates to alcohol.
“I don’t know exactly where that can take us, but I can tell you I’m optimistic it’s big enough to continue trudging along.”
Video of Rellas’ talk can be played above. Complete video playback from every Brewbound Session Chicago presentation can be found on the Brewbound Youtube channel in the coming days.