eCommerce, Alcohol and Privacy: Spirits Companies Rush for Customer Data Despite Concerns Over Breaches
Uber-owned alcohol retailer Drizly recently got in trouble with the FTC over an alleged data breach that may have leaked millions of users’ data.
Purchased by Uber for $1.1 Billion in 2021, Drizly is a titan in the booming alcohol eCommerce industry, an industry that is projected to reach $42 billion in sales by 2025.
Unfortunately, Drizly’s alleged data breach is only the tip of the iceberg in a growing battle over user data within the spirits industry. That battle is currently being fought on two sides; by third-party retailers like Drizly, and by smaller alcohol brands hoping to capitalize on the direct-to-consumer (D2C) market.
Each side comes with pros and cons.
The True Cost of Delivery
In a recent interview with PYMNTS, the chief operating officer of OVO Vodka, Jon Dunnington, spoke to frustrations that the company is having with third-party eCommerce platforms.
It’s a bustling market occupied not only by Drizly but by competitors like DoorDash and Instacart as well. Dunnington says that these platforms don’t readily provide user data to alcohol producers unless they pay up through “advertising solutions” like the recently launched Drizly Ads.
“All we can really see is which of our vendors use the platform, and then we can update our own platform through Drizly,” Dunnington said, “but we can’t access sales figures and things like that. That’s something that only the store is able to see.”
Dunnington and others are hoping to shift gears into the D2C market, shipping bottles directly to customers without the need for a middleman. But it’s a costly game, one made all the more difficult by interstate shipping and curbside pickup laws.
For smaller retailers, having insight into consumer data would be a huge help in reducing costs and increasing efficiency. But for now, it appears that Drizly and its peers have control over the market.
The recently launched Drizly Ads program has already partnered with industry giants like Diageo, Pernod Ricard, Molson Coors, Campari, Moët Hennessy and more, offering not only user data but also direct advertising through the Drizly app and website.
If the news of Drizly’s recent alleged data breach is anything to go by, then the alcohol eCommerce industry might need to change, and fast. Not only for the sake of smaller spirits producers but for consumers as well.
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