P2PI LIVE: Technology, Challenges, Opportunities in the BevAlc Space
From technology to regulatory compliance, Derek Correia, president of ReserveBar, discussed the future and the challenges of working in the BevAlc category Wednesday during a keynote session at P2PI LIVE in Chicago.
Below is an abbreviated Q&A highlighting a few of the topics covered by Correia and Patrycja Malinowska, director of member content at the Path to Purchase Institute.
Q. Tell us about ReserveBar.
Correia: We’re an online platform. We are technically a marketplace, but we operate a little differently. We curate the products on the site, so we have a limited selection of mostly luxury and super premium products. We focus on spirits, champagne and wine – we don't really have beer – and we do all the work and make it simple for you to shop these products. But, behind ReserveBar.com, you've got a robust business in data analytics and business intelligence. We’ve got merchandising and marketing digital shelf business, but also a programmatic and marketing optimization business, because we have the benefit of having the data layer of who is actually buying what. We also can resolve all media down to a check out in the depletion.
We acquired Minibar Delivery in November of 2021, which is much more of a marketplace type endeavor. Then we have what we call our “powered by” business, which is really a software as a service business, and that's bringing the cart off of ReserveBar, and into all of the logical places in the digital world, and in real life, where there's a moment when somebody could want to be purchasing beverage alcohol.
Q. You mentioned the acquisition of Minibar. Tell us a little bit more about your high-speed and on-demand delivery ambitions.
Correia: The acquisition of Minibar Delivery was partially to acquire a business that lived in that everyday provisioning space in BevAlc. So, if you’re not familiar with Minibar Delivery, you might be familiar with Drizly. It's sort of a similar thing that does have all of the products available within the retail-network-to-cart build to generally get delivery in about an hour.
Minibar Delivery had [a network of about] 3,600 retail locations and had the technology that enabled seeing into an individual retailer’s point of sale, seeing what's in inventory, getting those prices and facilitating a local delivery. ReserveBar in the shipping modality didn't have to have nearly as many retailers because we could ship within a state. We only needed a couple of retailers and we didn't actually even need to know whether the product was in stock at that moment because in shipping, if it's not [in stock], they can get it from a distributor within a couple of days and still ship it. But, for on-demand delivery, you actually can’t sell somebody a product that's not there.
The other reason we bought Minibar Delivery is because we wanted to offer on-demand service from ReserveBar. And the reason isn't because we want to compete with Drizly and Minibar. The reason is when you think about the occasions that reserve our services. Many of those occasions are not best served by having to wait three to five, or even seven days, for product to be shipped. It doesn't work to send Mom a bottle of champagne from ReserveBar [for Mother’s Day] if it takes three, four or five days to ship.
What Minibar did for us is it allowed us to have the two sides of the two hands clapping you need. You need the technology that's integrated into the POS systems of retailers to facilitate that and you need many more nodes because every one of those nodes has a delivery polygon that they can cover with one- to two-hour delivery.
Q. What are some of the challenges that you face in terms of being in the BevAlc space?
Correia: Fifty different states regulating BevAlc and each one doing so differently. Doing it differently between spirits, wine and malt beverages, doing it differently year to year or month to month or minute to minute, and constantly changing those regulations.
Within the e-commerce, one of the biggest challenges is that the moment that a person buys beverage alcohol online, they have to be buying it from a licensed retailer. So, they're never buying a product from ReserveBar, or Minibar, or from a tech deployment or from a brand. They’re buying it from a licensed retailer. That technology has to actually facilitate you knowing the retailer, that's buying it, the price for that bottle and getting the money contemporaneously into that retailer’s bank account the moment the transaction occurs. All of this is just a massive complexity from a compliance, from a technology, from a retail partnership perspective. At the same time as it's frustrating, it's also the reason for our existence. If it wasn't for all of these challenges many of the world's biggest e-commerce companies would have had alcohol for a long time already and it would have been much farther up the adoption curve.