Major retailers of beer, wine, or spirits that don’t have a mobile sales app connected to their store for customer orders and delivery may be missing out on significant revenue opportunities. While many alcohol industry retailers have online e-commerce platforms, these rarely account for consumers looking for instant gratification. That’s where mobile apps such as Drizly, Boxed, Minibar Delivery, Swill, and Instacart come in—they connect consumers with wine, spirits, and beer retailers, and have the capability of delivering orders in less than an hour.
Total U.S. e-commerce estimated sales, including alcoholic beverages, increased 15.2% for the second quarter of 2018 from the same period in 2017 and accounted for 9.6% of total U.S. retail sales, according to the U.S. Department of Commerce. The total e-commerce share of the retail market has more than doubled in the U.S. since 2009, when it accounted for about 4%. Historically, e-commerce peaks in the fourth-quarter; this year, it’s on pace to reach a 10% retail share.
Chicago-based Urban Pantry, which has three stores in the Windy City and another seven in the metropolitan area, once had its own mobile app for e-commerce consumer purchases, but began using Drizly in January 2017. “Our e-commerce sales have been really good this year as compared to 2017,” says Urban Pantry owner and president Kunal Desai, who notes that the segment has yielded an additional 30% in sales for his store.
Urban Pantry’s immediate market has expanded from three or four blocks around each store to three to five miles, and delivery staff has grown from 15 employees to 22. The store’s mobile customers include millennials, corporations, and gift buyers. “We’re getting customers that we wouldn’t normally have,” Desai says, adding that the app has brought in an additional 700-800 orders a month out of his overall sales. “A lot of people are gifting Champagne, rare whisk(e)y, or luxury wine through the app.”
Steve Sloan, owner and vice president of Morton Williams Wine & Spirits in New York City, agrees that mobile apps are helping retailers reach new customers and thus increasing sales. “Today’s consumer is different—if they want something, they’re going to find a way to get it online,” he says. “They don’t want have to walk to a store and carry something. They like having things delivered to them.”
Like Desai, Sloan—who began using Drizly four years ago—says the two main demographic groups using apps to order alcoholic beverages are millennials and corporations. In addition to its two wine and spirits stores, Morton Williams has 15 supermarkets in New York City where customers can also order beer, albeit as a separate order, through the app. “We have a large variety of beers,” Sloan says. “Our stores are nice venues for people to try new beers, too, and through Drizly they get descriptions, links, and other features that aren’t available in-store.”
Sloan adds that mobile apps are likely to continue furthering sales. “App sales are going to grow tremendously year over year for many years to come,” he says.