As part of its strategy to reach merchants lacking the technology to support the sale of alcoholic beverages online, digital commerce platform provider Drinks Holdings Inc. has jettisoned its Wine Insiders direct-to-consumer ecommerce business for wine sales.
Earlier this month, Drinks sold Wine Insiders for an undisclosed sum to Full Glass Wine Co., which also owns the Winc retail wine ecommerce site. The sale opens the door for Drinks, or Drinks.com, to focus on selling its digital commerce technology stack, designed to enable any online merchant to add alcoholic beverages to product catalogs and such venues as “influencer” web storefronts.
Zac Brandenberg, CEO, Drinks Holdings Inc.
While ecommerce is a fast-growing channel for consumers to discover and purchase beverages, sales of alcoholic beverages through the digital channel are growing even faster, says Drinks chief executive and co-founder Zac Brandenberg.
“Consumers want to engage with brands/merchants at their convenience — where they want to, when they want to. That means from their laptop, their phone, their couch, etc.,” Brandenberg says. “As the alcohol category starts to come online, you’re going to see consumers rapidly adopt a digital shopping modality.”
To capitalize on consumers’ growing preference to purchase alcoholic beverages online, Drinks’s strategy is to focus on bridging the gap between consumers’ growing desire to purchase alcohol online and alcohol companies’ ability to scale online sales. The sale of alcoholic beverages in the United States totals about $250 billion, the company says.
“The growth in the sale of alcoholic beverages online increases the total addressable market opportunity because it expands consumer choice and access, particularly in markets where regulatory restrictions have limited shopping access points or SKUs available to consumers or created other impediments,” says Brandenberg, adding: “The growth in the sale of alcoholic beverages online is not being fueled exclusively by the shift away from brick-and-mortar shopping.”
At the core of Drinks’s business is its Drinks app for Shopify, which provides Shopify merchants of all sizes with an embedded, real-time alcohol tax and regulatory solution. In addition, the platform helps merchants that want to sell alcoholic beverages manage regulatory compliance, required disclosures, customer messaging, product catalog and inventory management, merchandising optimization, and product fulfillment.
An app for managing online alcoholic beverage sales
“Our vision is to provide an operating system for this industry — that means any business that wants to sell alcohol online,” Brandenberg says. “Our Drinks Shopify App provides the regulatory technology for alcohol producers and merchants to sell alcohol online.”
In addition to its core regulatory tax compliance platform, Drinks offers a wine-as-a-service (WaaS) platform to develop a branded nationwide wine program and offer omnichannel shopping experiences. As a result, ecommerce merchants that don’t carry a liquor license can add alcoholic beverages as a product category in a fully compliant manner directly to their storefront, Drinks says.
Retailers such as Macy’s Wine Shop, Thrive Market and Misfits Market use the Drinks platform.
Other apps offered by Drinks include its Pair platform, which uses data-driven insights with artificial intelligence and machine learning to create personalized shopping experiences. The company also operates a customer experience and retention agency called Electriq, which helps wineries take the tasting room experience online and increase customer loyalty through lifecycle strategies, email/SMS marketing, and web design and development.
“We have a lengthy waitlist of merchants who want to add beverage alcohol products into their storefronts, covering almost any audience,” Brandenberg says. “Drinks is enabling any business that sells something online to now be in the alcohol business. We are able to power online, direct-to-consumer alcohol commerce for bellwether retailers, digital-first commerce brands, and celebrities like Martha Stewart and Geoffrey Zakarian. As we scale our technology footprint, more merchant types, as well as experts, creators and influencers will follow suit.”
One merchant segment that looks especially promising is “creator” and influencer websites, which are not part of the alcohol ecosystem in the traditional sense. Tapping this merchant segment represents new distribution opportunities for alcoholic beverage brands.
“The early innings of creator/influencer-driven marketing have operated similar to an old-school affiliate model, where an endorsement led to a transaction on a brand/merchant site,” Brandenberg says. “That’s obviously evolving, and opportunities abound for the creators themselves to be the conduit for transactions, to maintain that one-to-one relationship they have with their audience. That presents an opportunity for us to enable an ever-increasing number of consumer-facing commerce sites or outlets.”
Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.
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