If you find yourself functioning in the world of startups, in really any capacity, you're probably about as sick and tired as I am with the litany of overused keywords and coined terms such as pivot, innovation and disruption -- they’ve all but lost their luster and intended meanings. There are, however, some circumstances that really just rely on their specificity, making their use unavoidable.
There is such a circumstance that exists in the newly expanded market of alcohol delivery, which is being pioneered by a number of tech startups that are making serious progress. One of those leading the race is a Los Angeles-based company called Saucey, which is said to be disrupting -- yep, I said it -- the retail liquor space based on the fact that it's delivering alcohol on demand to consumers and doing it quite well. So liquor stores are pissed, right? Well, no, but there’s more to the story than you think.
Let’s first take a look at Saucey and how it is that it came about. Unfortunately for me, I didn’t start the company. Fortunately for you, I know who did. Enter Chris Vaughn, the founder and CEO of Saucey, which launched in 2014 and has quickly gone from nothing to something.
The legal beginnings
When I first spoke with Chris, I was fascinated to learn about the surely long list of legal issues associated with starting a company that is dealing in a space as highly regulated as alcohol.
“The key was to keep the transaction between the customer and the licensed retailer in order to remain legally compliant in the many states that do allow alcohol delivery,” he says. “The other major issue is in the physical delivery of the alcohol. Our delivery experts carry scanning software and card everyone regardless of how old they appear to be, or how many times they have ordered in the past. We go above and beyond to ensure that we’re compliant.”
According to Chris, there are also legal issues that relate to the movement of the money, which even precludes the retailer from collecting at the point of delivery -- if they decide to deliver the goods themselves -- which in this case is solved by having the consumer pay the retailer directly via the mobile app.
Being that Saucey’s model is built around connecting the alcohol-needing consumer with the alcohol-selling retailer, which is made surprisingly simple through the mobile app, the first step beyond solving the legal issues was to find an open-minded liquor retailer to start and test the process.
“In the beginning, because this is such an new concept, speaking to some of the old-school liquor store owners was a challenge to explain the process and opportunity," he says. "These well-established liquor stores had not seen any sort of change in the liquor industry since prohibition, so the opportunity was foreign.”
The company found a brave store in West Hollywood, got moving and now stores all over the country are lining up to participate. Not bad.
A good business model is one that provides a substantial amount of value for all parties involved, which in this case includes the consumer, the retailer and Saucey. The consumer value is clear: They easily get the booze they’re in need of and it’s delivered in a timely fashion by friendly people. Saucey’s value is also clear: it generates revenue by managing the process, which starts with connecting the consumer to the retailer. The retailer value stands out just a bit further: they have the ability to generate upwards of $30,000 to $40,000 per month in additional revenue while expanding their customer base beyond their typical foot traffic with the use of Saucey’s technology and its dispatch and delivery service.
The term disrupt, at least as pertains to business, is defined by Dictionary.com as “to radically change an industry, business strategy, etc., as by introducing a new product or service that creates a new market.”
So, is on-demand alcohol delivery truly disruptive? At face value, no, because liquor stores already have the ability to deliver to their customers in the states that allow it. However, Saucey has created a considerably better and more efficient way for the retailer and their customers to interact, which results in an easier buying experience for the buyer and enhanced revenue for the seller.
In my view, the disruption that does occur happens when only the best alcohol retailers make the exclusive list to serve Saucey consumers -- due to limited capacity on their platform -- and the rest wallow in the muck and mire of old school, in-person, sales stagnation.
Now go be a responsible adult, avoid drinking and driving, and have your booze delivered.