The Drizly app connects users with the nearest participating retailer, displaying exactly what is available for purchase. A store employee then makes the delivery.

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About a week before wine went on sale in local Tennessee grocery stores on July 1, an on-demand alcohol delivery app, Drizly, launched for Nashville and Franklin residents.

The ability to connect consumers with alcohol through an app showcases technology’s ability to leapfrog over the status quo.

After all, the idea for Drizly came about in 2012 when the company’s Boston College-grad co-founders, Nick Rellas and Justin Robinson, began researching the viability of alcohol delivery in Massachusetts, a state with some of the strictest liquor laws in the country.

Used to having everything delivered to them through their phone, it seemed a six pack of beer should be part of the equation, too. Realizing technology hadn’t been able to integrate into regulated industries like alcohol, they found a way to legally work within the system and launched in 2013.

Since then Drizly has standardized the alcohol shopping experience and has been backed by a group of angel and institutional investors, raising $32.8 million.

Now Nashvillians can get their liquor, wine and beer of choice – at home, excluding Sundays and holidays – in less than an hour.

“The idea there was that if it’s legal in Boston, it’s going to be legal everywhere else,” says Kerin Horgan, senior manager of communications for Drizly. Drizly is currently on track to see 4.8 times year-over-year growth in users, orders and revenue.

By comparison, in 2013 Tennessee’s lawmakers and lobbyists were preparing to go toe-to-toe for yet another fight in the legislature over allowing wine to be sold at grocery stores, an annual legislative occurrence that dragged on for years. The move to allow wine to be sold in groceries is the biggest change made to the area liquor laws since Prohibition.

Navigating liquor laws

Horgan says Drizly works with area regulators and has general counsel in each of the cities where they operate to help navigate local liquor laws so they are already operating in the most compliant way upon launch.

And the laws vary greatly, not only from state to state, but county to county – and not just in Tennessee.

“In New York, their liquor is sold through one license and wine is sold through another, so you’ll never see all three in the same store,” Horgan explains.

“That obviously poses a little bit of an issue for us, but essentially a Drizly customer in New York is getting two deliveries if they order across all those categories.”

Nashville was the 23rd market for Drizly, and Horgan says they hope to be in 30 cities by year’s end as the technology company works to transform the way people buy alcohol, giving them the option to shop thousands of products right from their smartphone for delivery within the hour, though Horgan says it can come as soon as 20 minutes later.

Right now, Drizly services 20 Nashville and Franklin neighborhoods, including 12 South, East Nashville, Germantown and Green Hills.

Nick Rellas, CEO and co-founder of Drizly, says the company has had its sights set on launching Drizly in Nashville for quite some time given the young, tech-savvy population and the vibrant culture around music and drinking.

The new service can be a boon for liquor stores looking to counter the possible drop in sales they might see as consumers get their goods at the grocery store.

Delivery through Drizly would not be possible without partnerships with five local brick-and-mortar retailers, Grace’s Wine and Spirits, Midtown Corkdorks Wine and Spirits, Red Dog Wine and Spirits, Red Spirits and Wine and The Bottle Shop at McEwan.

“I think what also has helped us in growing is that alcohol delivery didn’t exist in Nashville until Drizly launched,” Horgan adds.

“Maybe there’s a few stores that you could call up and get delivery if you were spending over $100 or $150, but there was no seamless way until Drizly entered the market and you could order alcohol from your phone.”

Since the drivers all work for the retail partners, Drizly never touches a bottle of alcohol or money from the transaction. Instead, the Drizly retail partner fulfills the order with a delivery driver of their own and gets all the money from that order.

They also pay a monthly license fee to Drizly based on a variety of factors, including the value of the delivery zone served, and they also have access to the proprietary Forensic ID Verification System technology Drizly uses to determine the legality of a potential consumer.

“In a lot of cities it’s illegal for us to be couriers and deliver alcohol. We figured the common denominator was that if the liquor stores themselves delivered the alcohol, then we can roll out more broadly and more strategically,” Horgan says.

“It’s just interesting how many laws there are around the sale and purchase of alcohol.”

Extension of retailer

Customers logging into the Drizly app are connected with the closest retailer and will only be able to shop from its available inventory. The prices will always be the same online as in-store.

“Drizly doesn’t mark them up, and you’re never going to see anything from a Drizly warehouse or anything like that,” Horgan explains.

“We partner with the liquor stores so that we are compliant within the three tiers and that’s why industries support us, because we are a proponent of keeping the three-tier system intact.”

Tennessee’s liquor sales operate on a three-tier system of distribution in which producers can sell their products only to wholesale distributors who then sell to retailers. Then, retailers are the only ones allowed to sell to consumers.

The benefit to retailers who choose to use Drizly is the automation process of people being able to see available inventory without an employee dashing across the store to see what was in stock or not. Plus, Drizly turns them a $5 flat delivery fee no matter how much or how little is ordered.

“All the store has to do is take the order, go pick and pack the order and hit the road,” she says.

Paul Patel, owner of Midtown Wine and Spirits, says the service is a natural fit for their customers, who they knew used rideshare apps extensively to get around town.

Bard Quillman, owner of Red Dog Wine and Spirits, says he wants to be on the forefront of what customers want.

“The innovations Drizly brings to the market make us natural partners, and we’re excited to be able to serve customers in a new way by delivering our products directly to their door,” Quillman says.

What the driver app shows before a delivery is the customer’s information and what they ordered.

Upon delivery, drivers have to scan the person’s ID to ensure that they are of age and that their information matches their billing information.

“Really, the great thing about all these people being employees of the liquor store is they know how to identify a fake ID, they know how to identify someone that’s under 21 and this is the same technology,” Horgan says. “They’re just bringing it along with the delivery for them.”

Adding value for customers

Horgan says it is not just the delivery of alcohol that makes Drizly a hit with consumers, but the quality of the content they are producing onsite that adds value and aims to exceed consumer expectations.

“We actually have a chief cocktail officer on our team, and she’s doing a lot of recipe development and creation and sharing with people new ideas and recommendations,” Horgan adds.

“Maybe you’re typically a vodka soda drinker, but maybe you want to try something different. We have maybe 150 different recipes on the site, so just press this button and we’ll load everything into your cart for you.”

Drizly also lets consumers schedule alcohol deliveries when it is most convenient for them, earn referral rewards or send alcohol to legal-drinking age friends.

“If you’re planning a party for Saturday night, and you’re thinking about your menu and the wine you want, now you can create the order and have it delivered between 4 and 5 p.m. on Saturday and then you don’t have to think about it until then,” Horgan explains.

Chicago-based GrubHub is a food-focused company, so food will always be at the forefront of the services they offer says Kaitlyn Carl, media relations coordinator for GrubHub.

But beverages go right along with that, and could soon here in Nashville too.

“It depends on the market, and of course alcohol delivery laws, but in Chicago a restaurant can choose to offer beer or wine, and we are able to provide delivery for those items as well,” Carl says. “It just depends on the markets.”