Software and Payments Give Digital Boost to Premium Spirits Brands

As the alcoholic beverage industry looks to catch up to the digital shift, ReserveBar is seizing on the opportunity that eCommerce presents brands with — to connect premium brands more directly with their customers rather than centering the retailer.

As Derek Correia, CEO of ReserveBar, noted in an interview with PYMNTS’ Karen Webster, much of the alcoholic beverage space’s digitization has been very retailer-centric in a way that mirrors the physical world, with stores standing in as intermediaries.

“Drizly started right around the same time as ReserveBar did, and Drizly said, … ‘The world needs a digital liquor store,’ and that’s what they built,” Correia noted.

“ReserveBar said, … ‘The brands in this business need a place to send their traffic where that brand’s story-tell is really optimized all the way through the path to purchase, because that doesn’t happen in brick-and-mortar, and it didn’t exist digitally,” he added.

The company’s platform connects brands with retailers and enables consumers to shop by brand and by product, showing them fulfillment options from various sellers, rather than having consumers shop by products available at a given retailer.

Breaking It Down

One of the key advantages of this approach for brands is that they can get better insight into their consumers, whereas traditional, retailer-centric models can stand in the way of their access to customer data.

Correia noted that the majority of brands “don’t actually know who their consumer is,” with little insight into when and where their customers are shopping, how various promotional offers perform, which specific ads in a campaign are the most effective and so on.

Additionally, eCommerce has provided the opportunity to begin collecting pre-orders to understand how a product is resonating with consumers before the launch. In turn, ReserveBar can offer insights to suppliers that can boost their logistical execution, such as equipping them for greater volumes in particular areas.

“Getting that information early actually improves the efficiency of everything, from supply chain management to marketing efficiencies,” Correia observed.

The Fine Print

There are constraints when it comes to centering brands, given the legal requirements for alcoholic beverage sales.

For more than 90 years in the United States, the industry has been governed by the three-tier system, which requires producers to sell to wholesale distributors, who then sell to retailers, who in turn sell to consumers. Regulations can vary from geography to geography, with one or more of these tiers controlled by the state government in some places.

ReserveBar, for its part, circumvents these challenges by focusing solely on the technology, connecting consumers to its network of thousands of retailers rather than selling anything themselves.

“We touch no alcohol. We store none of it. We don’t ship any of it. What we do is make products available in the digital world,” Correia noted.

The COVID Boost

The COVID-19 pandemic accelerated the adoption of eCommerce in the alcoholic beverages industry. With bars and restaurants closed or operating at limited capacity, consumers turned to online platforms to fulfill their alcohol needs. The shift in consumer behavior led to a significant increase in eCommerce sales, from which digital platforms such as ReserveBar benefitted.

“We would characterize it as probably about a three-year acceleration of the adoption curve in about three weeks,” Correia said.

Indeed, PYMNTS Intelligence bears this widespread increase in adoption out. A 2021 survey of nearly 2,000 consumers found that nearly half of all consumers who had been purchasing alcohol online for same-day delivery were doing so more often than before the pandemic, and a similar share said the same of buying alcohol online for delivery at a later date.

Plus, 70% to 80% of consumers who had increased their adoption reported that they intended to maintain some or all of their buying behaviors even as they returned to bars and restaurants.

The Connected Opportunity Ahead

Looking forward, ReserveBar has ambitious plans for the future. The company aims to expand its partnerships and enable commerce in various fashions beyond its own platform.

For example, the company is tapping connected commerce through other digital platforms. Correia highlighted an upcoming partnership with leading whisky publication Whisky Advocate to integrate purchasing into educational and entertainment content.

“We’re changing listicles and affiliate into purchasing right then and there in situ,” Correia said.

Plus, he cited the opportunity of additional kinds of content, such as mixology videos, to further these connected commerce goals.

Correia also cited the example of integrating commerce into consumers’ day-to-day routines through activations such as placing QR codes on products like coolers, such that, whenever it starts to get empty, shoppers can order products for delivery from the cooler itself.

By bringing the checkout experience to these different touchpoints, Reserve Bar aims to seize on more sales opportunities and shorten the path from intention to purchase.

“We see the future of commerce — and this isn’t just eCommerce, this is all commerce; even Amazon will be doing this — [as being about] how do you bring that checkout right to every single moment that you possibly can?” Correia said. “So that’s really what our focus is.”