5 Online Alcohol Delivery Mistakes — And How to Avoid Them
From underestimating tech needs to rushing through trainings, these are the key pitfalls to watch for
Offering delivery service can be a way to add an additional revenue stream and expand the reach of your wine, liquor, or beer store beyond its four walls. Coming out of the Covid-19 pandemic, when customers are unable or unwilling to make in-person shop visits, delivery is even more important, offering a lifeline for many businesses.
While services like Drizly make it easier to quickly ramp up your delivery business, these five common mistakes have the potential to slow you down. The tips below will help you avoid pitfalls and ensure that your customers can beat a path to your virtual door.
1. Not Knowing the Costs of Doing Delivery
Adding delivery to your store’s service options will almost certainly increase your top-line revenue. You’ll reach new customers who have never been through your door and — with the right offers — drive higher purchase levels with your existing customers. However, it’s important to realize that these incremental sales will come at a higher cost than your in-store business.
“Stores need to truly understand the full costs of running an on-demand delivery service, and price their products accordingly,” says Patrick Brady of Brady’s Wine Warehouse in New Orleans, adding that customer-paid delivery fees are not enough to cover costs. Other costs will go up, as well. “Insurance costs will increase, packaging and printing costs will increase, and staffing costs will increase.”
Before flipping the switch, make sure you estimate these costs and build your delivery program and pricing strategy around them, including delivery minimums, fees, prices and discount offers. Set separate profitability targets for delivery sales and in-store sales, and review them periodically to make sure you’re on track. This step takes time but it’s crucial to ensure that your delivery service is driving profitability as well as sales.
2. Underestimating Technology Needs
Most shop owners know that they’ll need vans, bicycles, or foot power to support their delivery businesses, either in-house or outsourced to a third party, where legal. However, the technology needs, from POS integration, to GPS mapping, to signature capture also need to be considered.
Inventory management is always important, but online, it’s crucial. Incorrect inventory is one of the most common customer complaints, and communicating out-of-stock items after an order has been placed can slow down your fulfillment process considerably. If your shop’s POS system doesn’t automatically integrate with your e-commerce platform, you’ll need to put a process in place to ensure that frequent manual reconciliation takes place.
Correct inventory is just the starting point for a smooth-running delivery business. “Drizly Retail Partners all have access to the Drizly Retailer app which allows them to really easily process an order through each stage,” says Kathryn Lehman, Drizly’s director of account management. When an order arrives, store staff are pinged with product details and any specific delivery instructions. Integration with various map platforms then allow your delivery people to find the fastest way to a customer’s door. The Drizly app also allows for easy collection of a customer’s signature, and can scan their ID for age verification.
Technology can also streamline the reporting process. Lehman describes Drizly Retailer as a dedicated resource hub. “Our partners can access things like snapshots of their activity on Drizly, data and trend reports to help them maximize the amount of business they do both on Drizly and in-store, and reconciliation reports to help make payments to their employees a breeze.”
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3. Not Taking Delivery Team Hiring and Training Seriously
Your delivery team is an extension of your shop. Often, they are the only store employee that your customers will meet in person, so it’s important that you take as much care hiring and training this team as you do your in-store sales staff. They should be up-to-speed on store policies, trained to make customers feel comfortable and well-assisted, and empowered to address issues that could arise during delivery.
Training should also not be seen as a one-time activity. Process adjustments should be made as you and your team determine steps that could make the process more efficient or effective.
In a time when state and local guidelines for retailers are rapidly changing, adjusting your process and clearly communicating these changes to your team is especially important. According to Drizly’s Lehman, “Early on in March, we implemented a new set of safety guidelines to help our Retail Partners execute contactless deliveries. That includes outdoors meeting points, suggestions to forego signatures, wearing PPE, and keeping a safe distance. Unlike food deliveries, alcohol deliveries do legally need to take place in person, so the key is ensuring that it’s done in a way that follows CDC and local guidelines.”
As policies and processes continue to change, having a well-trained delivery team that understands the what and why behind them will help keep them — and your customers — safe and satisfied.
4. Being Too Hesitant to Allow for Growth
While an unexpected rain storm is almost guaranteed to result in a spike in delivery requests, you won’t be able to staff based on the daily weather report. However, you can easily staff for peak delivery times, which tend to mirror your in-store rushes. According to Kathryn Lehman, Drizly’s director of account management, “Your employee schedule should likely look dramatically different on Friday and Saturday nights than on a Monday morning.”
In addition to ramping up your delivery staff for peak times, use slower periods to prep top-selling items and packing materials. Something as simple as a staging table and a pre-rush checklist can go a long way to making high-volume delivery periods go more smoothly.
Drizly’s Lehman suggests that stores adding delivery service to their offerings resist the urge to test the waters, opening for only a few days or hours to get a sense for volume. Her advice is “to go all in” because initially offering a limited set of delivery hours “ends up working against their favor.” Because Drizly notifies customers in a new Retail Partner’s delivery zone as soon as they come on board, offering delivery for the same, or similar, time frames that your physical shop is open will help you capitalize on this initial burst of free marketing and retain those customers for the long term.
5. Stocking the Wrong Products
For your online offerings, consider a mix of top-selling national brands and smaller, quirky wines and spirits that communicate what is unique about your shop. Drizly’s Lehman notes that “there are approximately 150 products that are top sellers on Drizly across the nation. We strongly recommend to our partners that they carry those top products to increase their conversion rate on the platform.”
Depending on the pricing structure and purchasing terms within your marketing, your shop may not have the capital to invest in all of these top-selling items and offer them at a competitive price. However, choosing a selection from among them will help bring new customers to your shop, while balancing them with higher-margin, lesser-known products that will help communicate your brand and increase your profitability.