Booze Startup Challenging Amazon Adds Former Wal-Mart Executive to BoardBy
Bill Simon also helped launch Smirnoff Ice for Diageo
‘This is very much us versus Amazon,’ Drizly CEO Rellas says
Alcohol e-commerce platform Drizly has signed up the former head of Wal-Mart Stores Inc.’s U.S. unit as it competes against Amazon.com Inc. for dominance in the online drinks market.
Bill Simon, who served as chief executive officer of the retail giant’s U.S. operations from 2010 to 2014, was appointed to Drizly’s board of directors, according to the startup. Simon is no stranger to the alcohol industry. He worked at Diageo Plc, the world’s largest distiller, where he helped develop Smirnoff Ice. At Wal-Mart, he helped expand alcohol sales.
Drizly works with retail stores in more than 70 cities to fuel its online platform, which lets customers order booze and have it delivered to their door. The big opportunity lies in getting the app onto the screens of more consumers, Simon said.
“It’s important to become more of a household kind of commonplace thing,” he said in an interview. Once that happens, “you start being able to be ubiquitous and more able to generate momentum.”
Drizly, which is based in Boston, has raised $35 million since its inception in 2012, led by Polaris Partners.
Alcohol sold off-premise, or outside of restaurants and bars, is a $130 billion industry. Less than 1 percent of that purchasing happens online, said Drizly CEO Nick Rellas. Alcohol, like the market for groceries, has been slow to digitize, largely because of complicated regulations for selling booze. By partnering with local retailers, Drizly has solved that problem.
“We’re the largest liquor-store network in the country, in North America, frankly,” Rellas said. “Even in Amazon’s backyard we sell more alcohol than they do.”
When people do buy booze online, they tend to spend a lot of money. Even though the company’s products are limited to alcohol, some other beverages and garnishes, the average Drizly customer still spends about a third of what the average Amazon customer spends in a year, Rellas said.
“This is very much us versus Amazon in the way it’s Instacart versus Amazon in grocery,” Rellas said. “I like our odds.”