For a $5 delivery fee, the beer will arrive within the hour thanks to Drizly, an app that links liquor retailers with customers. On-demand customers pay the same amount as walk-ins, except for the delivery charge.
“They are trying to make buying their beer as easy as possible, and Alexa is one way to do that,” said Bart Watson, chief economist with the Brewers Association, a trade association that represents small and independent craft brewers.
The Miller Lite beer button is available to a test group of 500 of its most loyal drinkers who had bought through Drizly. The Alexa group is much wider and available an the Amazon devices Echo, Echo Dot and Tap. The Alexa device owners can summon the beer-delivery option with the words, “Start Miller time.”
MillerCoors launched the tests in December as a way to gauge interest from its customers. The company will not know the results until the tests end next month. Companies are piling in to the on-demand space for fear they may miss the next big business opportunity. According to the Harvard Business Review in April 2016, the on-demand economy accounts for $57.6 billion in spending.
“With the on-demand economy growing, and the need for convenience, we think providing a more frictionless shopping experience is the wave of the future,” said Jorie Sax, a marketer at Chicago-based MillerCoors who is working on the project. “This is very, very new technology, so we had to work out the kinks.”
The U.S. e-commerce market for alcohol is around $1.2 billion, a Drizly spokesman said. On-demand is a fraction of that.
Amazon, maker of Alexa, is also using its voice activated helper to deliver alcohol to the home. (Amazon founder Jeffrey P. Bezos is the owner of The Washington Post.) It announced last week that its Prime subscribers can tap into the voice assistant and receive a delivery within two hours.
As a facilitator, Drizly finds and connects consumers to local beer, wine and liquor retailers. The stores, who pay Drizly a license fee based on sales, are responsible for making the deliveries.
“We provide retailers with online customers in their local market,” Drizly spokesman Malcolm Faulds said. “We also provide software that helps retailers sell their products online.”
Andy Desai, owner of Sherry’s Wine & Spirits in Woodley Park, D.C., said Drizly’s share of total sales is around 15 percent of his business.
“They are mostly young,” Desai said. “But basically, they are customers who would not typically be my customer. Now I can reach them.”
He said sales of Drizly-delivered products have tripled in the past two-plus years that he has been using the service.
Drizly was founded in 2012 by two Nick Rellas and Justin Robinson, two Boston College business students who were still in school at the time. The privately held company is based in Boston and serves hundreds of stores in 40 cities, including Washington, Baltimore, New York, Los Angeles, San Francisco and Boston. It has had two venture capital funding rounds, which brought in more than $35 million.
Delivery drivers are equipped with a Drizly-produced driver app that helps them keep track of what was ordered and to check orders as they are packed and fulfilled.
The driver app also includes technology that checks a customer’s driver’s license to ensure they are of legal age to buy alcohol. Drizly and its competitors also must navigate the many different state and municipal laws regarding alcohol sales.
“We have an army of lawyers around the country making sure we adhere to all local and state regulations,” Rellas said. “That’s the cost of doing business in a highly regulated industry.”
“Right now, there is a three-tier system to delivering alcohol to the consumer,” Watson said. “Producer, distributor, retailer. Drizly’s business model tacks on a fourth tier, adding an additional cost to the retailer prices and taking that cut. They are adding another middle man between the producer and consumer. People who see value in the convenience may be willing to pay that.”