Minibar Delivery works with local liquor stores and brands to deliver wine, beer and spirits to busy, urban professionals unwilling to spend their time running errands. Its on-demand service, which aims to get online orders to a customer’s door within 30 to 60 minutes, has expanded operations to more than 40 U.S. markets.
Minibar, which doesn’t have a liquor license and operates as a marketplace, recently launched a cocktail hub on its site to provide inspiration and more event-oriented content to shoppers in advance of the holiday season. Consumers can browse the site to get ideas and then purchase all of the related ingredients for delivery. This keen understanding of the social nature of alcohol consumption and shoppers’ entertaining needs has served Minibar well, says company co-founder Lindsey Andrews, and positioned it for even more growth.
Party planning 101
After launching the alcohol delivery service in 2013, the marketplace noticed many customer calls were coming from shoppers who were throwing happy hours or parties and weren’t sure exactly what they needed. The Minibar team ended up building a tool internally to help respond to inquiries and ultimately decided to make it a customer-facing resource via an “Event Planner” page on the site, Andrews says.
“We thought we might as well bring it to our customers since it helps make their lives easier,” she says.
The “Party Planner” feature prompts shoppers to enter the number of hours for an event they’re hosting, the time of day (day/evening/night), the number of guests and what types of alcohol they’re offering (wine/liquor/beer or a combination). Once the Get Info button is clicked, the site spits out a drink menu analysis with the number of drinks that are likely to be consumed, a sliding scale to adjust the percentage of wine versus beer offered and a bottle summary with the number and size of beverages, as well as a breakdown of white versus red and domestic versus imported.
Tips are sprinkled across the bottom: “Summer and daytime events call for more white and rosé, while red may be better suited for winter and evening events. In the summer, it’s best to chill your wine—even your reds—if it’s over 90°. If you want a champagne toast (most weddings), we suggest you add four bottles to the total above.” Other words of wisdom include: “For summer or outdoor events, lighter beers are the way to go, whereas a nice dark ale or lager can do wonders for a winter or indoor party. Make sure to grab extra ice to chill your beer.”
Beneath the event proposal, buttons redirect users to the retailer’s inventory in a given category.
Co-founder Lara Crystal, who previously led marketing at Rent the Runway Inc., No. 252 in the 2018 Internet Retailer Top 1000, declines to disclose how much Minibar Delivery has invested in creating the interactive site tool but says the company is focused on delivering the best shopping experience for its customers. While most resources have been devoted to mechanisms that will more directly impact conversion rates—like a seamless checkout process—the team also has prioritized content and built out those areas, such as the recipe section.
Bevy of bartenders
The marketplace’s “Book a Bartender” function allows shoppers to schedule a professional mixologist to serve at their next event in more than 15 cities. Minibar Delivery’s top markets for this feature remain New York-centric with Manhattan and the Hamptons, but Dallas also is in the running, Andrews says.
Other urban service areas include: San Francisco; Los Angeles; Chicago; Miami; Houston; Austin, Texas; Denver; Boulder, Colorado; and Jersey City and Hoboken, both in New Jersey. But Andrews says the company will “expand where the demand takes us” and still fields inquiries from customers looking to hire a bartender in untapped markets, aiming to orchestrate the staffing for them anyway.
“This is another feature that came from customer requests,” says Andrews, who helped launch pet line Wag while at Amazon.com Inc. (No. 1) and previously worked at online grocer FreshDirect LLC (No. 81). “We started offering bartenders specifically for holiday parties and company happy hours, [and it took off].”
Through MinibarDelivery.com, hosts select the time frame for their event—from three to five hours—and receive advice on how many people to hire. Minibar recommends one bartender for every 50 guests. Alcohol and mixers aren’t included, and requests have to be submitted 24 hours in advance, although there is a section with contact information for a last-minute bartender. Minibar then reaches out for more details and to ask about any special requests. Customers who cancel a bartender within 24 hours of an event receive a refund minus an $80 cancellation fee.
To offer its customers the bartending amenity, Minibar Delivery partners with an events agency. The retailer has outsourced the recruiting and hiring of mixology talent, which is all handled by the external group. Bartenders arrive at an event with their own utensils and barware—ready to set up, serve and clean up afterward. According to Andrews, Minibar can even provide bartenders with specific backgrounds for special events such as whiskey tastings or cocktail-making classes.
Business model
The average Minibar shopper spends $70 per order, Crystal says, but customers who are entertaining and organizing events spend more than double what others shell out. The event-planner content can help guide clueless party hosts—which is especially important during the Super Bowl, Cinco de Mayo and the holiday season from Halloween through New Year’s. These are key times when traffic and sales spike for Minibar, Andrews adds.
E-commerce analytics firm Rakuten Intelligence puts Minibar’s revenue growth at 6.5% in 2017. While Crystal declines to disclose sales or growth since the company is private, she says growth was “much higher” than Rakuten’s estimate and that Minibar has seen “significant” growth year over year since the launch. Roughly 65% of the marketplace’s sales come via its mobile app, Crystal says.
Stores can use the Minibar platform with no upfront costs by sending the marketplace its inventory and confirming order alerts that come through via email, phone or the online supplier portal. Minibar provides a full-service customer care team and digital marketing to boost sales.
Minibar built technology to integrate directly with most of point-of-sale systems for its network of stores so that the marketplace’s back-end shows exactly what the in-store inventory is at any particular time, the company says. Customers browsing on MinibarDelivery.com are able to view their local stores’ prices and selections, with choices for delivery, three- to five-day in-state shipping or in-store pickup.
Minibar, which also works with hundreds of brands, ensures branded items have the correct product images and descriptions since not all labels are armed with those details. The marketplace’s brand collaborators—which include Stella Artois, Absolut, Bacardí, Heineken and Crown Royal—get a direct-to-consumer connection, advertising and custom programs out of the deal. Customers also can shop directly from wineries in Minibar’s Vineyard Select program, where 10 participating vineyards offer wholesale pricing and ship to 42 states.
The marketplace doesn’t collect any of the money from transactions on its site. When a customer places an order through Minibar, which requires a minimum purchase of $25, the sale goes directly to the local store fulfilling the order. Minibar says it makes money by charging partners a monthly marketing fee, which is usually a percentage of sales made through its marketplace.
A delivery fee is tacked onto most Minibar Delivery orders in markets outside of New York City, but that is set and collected by the fulfilling store. Typically, it’s a flat fee around $5. Minibar doesn’t facilitate deliveries itself. In most cases, the stores handle this final stretch, but some partnering retailers use third-party couriers to manage alcohol deliveries.
On the rocks
With delivery being a central element to Minibar’s business model, the company attempted to tackle fulfillment on its own at one point, trying it out with a partnering store. But the marketplace’s experiment didn’t pan out.
“Ultimately, we realized that’s not our core competency,” Crystal says. “We can provide great technology and marketing, but there’re so many specialized delivery companies that are doing delivery at scale that it doesn’t make sense for us. But it helped us learn more about the economics of delivery and the challenges—making us a better partner.”
Another difficulty plaguing Minibar is how to deal with regulations across the liquor industry. The founders say they try to combat the challenge by employing lawyers in every state where the company operates to stay on top of the nuances of requirements, which often differ by region.
An eye toward the future
Minibar constantly relies on data analytics to spot trends, tweak product offerings and evolve the business, Andrews says.
“As more customers drink wine, that affects how we approach partners—we’ll need more stores with great wine selection,” she says. “As craft beers and local liquors become more important, we try to find partners with strong selection there. It’s all about understanding our customer and what they are looking for.”
And, at the end of the day, this will help the marketplace grow online sales in the food and beverage segment, which has by far the lowest e-commerce penetration of all product categories tracked by Internet Retailer.
“Online sales are still only [about] 1% of total alcohol purchases in the U.S., so our biggest competition is existing retailers,” Crystal says. “We deliver an experience that’s more convenient, educational and enjoyable than offline retail. We aren’t trying to get rid of existing retailers—we’re just trying to bring more of the overall market online.”
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