DRIZLY SPECIALTY STORE – CASE STUDY

Dec 18, 2018

MINUTE READ

Dec 18, 2018

4 MINUTE READ

Background: Drizly has always had a problem with how to get craft beer stores more orders and volume. As a store that typically has inventory issues, limited or no wine/spirits inventory and limited capacity they do not fit the typical “Drizly store”. We know they have a great selection and we have a customer base looking for these items so why haven’t we had a store that is successful?

Question: How can we improve sales for craft beer stores?

Recommendation: We will treat craft beer stores as complimentary stores. They are a “add-on” service. People will order from a craft store in addition to another store. Our Account Management team came to this conclusion when they saw that a popular craft beer specialty store’s ATC rate was high, but their conversion rate was low. This high ATC rate and low conversion rate is most likely due to the fact that customers would add the items to their cart and then realize they had to pay an extra $5 delivery fee and decide to just get all of the items they needed from the other store they were ordering from. The AM team communicated to the specialty store that customers see them as a complimentary store,  and they understood. They were willing to try something different and see if it would work. After some recommendations they decided to lower their delivery fee to $0, raise their minimum to $40 and focus on adding 4 packs in their inventory in addition to their single cans.

In addition to these changes they also gained some traction because they were a very popular store on Buttery. They communicated they didn’t want to lose that customer base since they had loyal customers through Buttery. With this in mind I also expanded their zone to cover the Buttery customers (before the acquisition). The combination of these things helped increase their orders immensely.

 

Results: The changes were made on July 19th and the results were clear.

 

TPV went up:

Orders went up:

Sessions, ATC and Conversion went up. In this graph you can also see the high ATC rate they had with the low conversion rate prior to removing their delivery fee:

Conclusion: There is a clear conclusion here that if we treat craft beer stores as a complimentary store (no delivery fee) that we should start to see an increase in sales/orders. There were some other things that helped as well (larger zone, better inventory) but I would also believe the higher minimum ($20 to $40) could have caused a negative effect. Overall if we push craft beer stores to add 4-packs to their inventory (or work on a “create your own 4 pack” option) and have them remove their delivery fee they should start to see an uptick in orders and sales.

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