The explosion of e-commerce and on-demand is training consumers to be brand-specific but channel-agnostic.
What if the lesson of the on-demand era is that finicky consumers don’t really care how they get stuff, as long as it’s the exact right stuff? Your pizza might get delivered by a zitty teenager from the pizzeria, an automated drone or a third-party delivery service. As long as it’s from the right place, it’s hot, and it has the right crust and toppings, who cares?
On-demand delivery channels are well on their way to commoditization, meaning they’re competing to get you the specific product you want the fastest, and for the lowest price.
Meanwhile, brands are moving in the opposite direction — consumers care more than ever about what brands they’re consuming. They won’t just eat any pizza — they want a specific pie from a specific place. And they won’t just buy any bottle of whiskey — it has to be their whiskey, and they’re proud about their attachment to their chosen brand. The explosion of e-commerce and on-demand is training consumers to be brand-specific but channel-agnostic.
That’s not such a bad thing for on-demand delivery services (including Thirstie, which I co-founded with Max Razmakhin), but it does represent a shift in the landscape. It means we’re moving from the on-demand era to the on-supply era.
Before you click away, let me explain.
It’s a natural evolution. Once you get past the novelty of buying something from an app and opening the door to the delivery guy 30 minutes later, you’ll use whatever app is convenient, reliable and has the product you need.
Case in point: The Tide button. A generic “detergent button” wouldn’t work for anyone with a detergent preference. They want Tide, and pushing a button to get it is the simplest possible path to purchase. “Press here, and Tide magically shows up.” Only it’s not magic at all. The retailer is working hard to figure out where to source it from and how to deliver it most efficiently.
In other words, the mission is to smoothly connect channel-agnostic consumers with the brands they love. That’s a challenge, whether you’re talking about detergent, clothing, the new Rihanna single or a burrito at lunchtime. How do companies get products to consumers quickly, easily and cost-effectively?
In the alcohol delivery game, the answer to that question is in partnering with suppliers of all kinds — local liquor stores, regional distributors, global brands, whichever can best address the consumer’s demand in the moment. A number of services have built networks of local liquor stores for short-distance deliveries. Think “Seamless for alcohol,” a smooth e-commerce layer for local shops. There are a lot of laws regulating this on a local level, and available brands will vary from shop to shop (especially for spirits and wines), but the four or five big players have shown that the business model is viable, even with the regulatory constraints.
For true wine and spirits snobs, the local liquor shops might not have the brand they want (and again, the brand is everything). Or they might live somewhere where local delivery isn’t feasible. But this is no problem when the partnership circle includes regional distributors, local retailers and the brands themselves. So if the local Moe’s doesn’t have that Usquaebach Old Rare Flagon you had once at a bachelor party in Scotland, no problem.
The next challenge is to build an e-commerce layer that can power the global brands’ own sales. They would love a way to sell premium products directly to their biggest fans, but e-commerce introduces all kinds of legal and logistical hurdles that they aren’t really set up to address. This includes navigating regional shipping laws, managing small consumers orders (just a bottle or two), capturing and handling consumer credit card info, setting up direct-to-consumer revenue streams that might be threatening to their regional distribution partners.
None of these challenges are insurmountable, they’re simply secondary to the brands’ core business, so there hasn’t been a push to address them. In the new world, though, on-supply delivery services will be motivated to provide that capability to the brands, and it’ll be a win-win for both the brands and for consumers. These partnerships are coming soon, and have the potential to transform how alcohol is bought and sold. Stay tuned.
Devaraj Southworth is the co-founder and CEO of Thirstie, a leading national on-demand liquor, wine and beer delivery company with a content-driven commerce platform. Prior to Thirstie, Southworth built a digital agency to over $10M in sales, sold the Creative Services BU to an Inc. 500 Company, was a VP of Mobile Strategy for Amex, and is a former Deloitte and Accenture Strategy consultant. He is is also the managing general partner of Tailfin Ventures, a LP and fund advisor to ENIAC Ventures, and vice-chair of the Second Chance Foundation. Reach him @devaraj1.