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There's an app for booze delivery coming to Indy

October 23, 2014

People can order just about anything through smartphone applications these days, from car rides to pizza.

Folks in Indianapolis can now add alcohol to that list.

Retailer Big Red Liquors is expected to announce a partnership Thurday with Boston-based startup Drizly to offer alcohol delivery service to consumers in the area, promising wait times of 20 to 40 minutes. All consumers need do is download its app and tap away.

Indianapolis will be the tech company’s eighth market, joining New York, L.A., Chicago and others.

“We see it as a great sports town, there’s sort of a revival with food culture, the population both in Indianapolis and in the surrounding area is fairly young,” Drizly co-founder Nicholas Rellas said in an interview with IBJ. “And when you combine all that, it just becomes a really attractive market for us.”

Indianapolis-based Big Red, which moved from Bloomington last year, is already permitted to deliver alcohol. But delivery accounts for less than 1 percent of the company's sales, officials said. They’re hoping to boost that percentage by capitalizing on consumer mobile habits.

Americans’ time spent on mobile apps grew by 52 percent between June 2013 and June 2014, according to analytics firm comScore, and apps accounted for 52 percent of all U.S. digital media time.

Instead of launching its own app to market delivery, Big Red has opted to partner with a firm that specializes in the niche. Under the deal, terms of which were not disclosed, Drizly will handle the marketing and app technology for a monthly license fee, and Big Red will handle the transactions and delivery.

“Every liquor store does delivery its own unique way,” said Matt Bell of Catalyst Public Affairs on behalf of Big Red. “What we believe we’ve found is a technology that allows us to standardize and streamline the way we do delivery of alcohol.”

The app is free but there’s a $5 delivery fee tied to orders. That fee will be waived for the first month, Rellas said. There’s no markup on the products sold.

Identification cards are verified through the app and by delivery drivers. Drivers will not deliver products to minors or an environment where use by minors is likely. The app also won’t facilitate deliveries to college campuses.

And ordering while under the influence may not be the best bet. If a driver deems the purchaser is too intoxicated, that person will be charged a $20 restocking fee.

Drizly has more than 100 retail partners and plans to announce a new West Coast market next week.

Rellas said the app, particularly in urban areas, has helped balloon delivery sales at some retailers to 15 percent of total sales from the low single-digit range.

“The average purchase on Drizly is close to three times higher than the average walk-in purchase,” Rellas said.

Rellas, 25, started Drizly with fellow Boston College alumnus Justin Robinson, also 25. The company launched in spring 2013 with about $5 million in seed funding from various sources and only had one market – Boston – at the end of 2013.

Big Red has about 50 outlets across central and southern Indiana. Rellas said the company is the largest retailer it works with, in part due to laws in other states that restrict retail size.

Drizly may opt to partner with Big Red and another retailer, but probably not anytime soon.

“Big Red is a fantastic partner and right now I see them as being able to fulfill all of our needs,” Rellas said.

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