How DRINKS is Using AI to Help Retailers Boost Wine Sales

Artificial Intelligence (AI) has been making headlines recently for all the wrong reasons: a study from Stanford University unleashed a firestorm of controversy recently when it showed that 73% of scientists surveyed believe AI will lead to revolutionary change, and 36% fear that robots could unleash an earth-shattering “nuclear-level catastrophe.”

Amid all of the scare-headlines and hysteria-laced morning news show rants, AI is also quietly changing our world for the better. AI, after all, helped us create a COVID vaccine in record time, is helping scientists tackle climate change and diagnosing life-threatening health problems in humans and plants.

And if DRINKS has its way, can go beyond the basic recommendation engines we know today, and ensure consumers end up with wines they will enjoy. DRINKS was founded about a decade ago, with the goal of enabling anyone in the online alcohol business—from established retailers to brands to new digital merchants—to easily sell wine without a massive overhead, while also ensuring wine lovers end up with the perfect bottle for them.

They do this, co-founder and CEO Zac Brandenberg explains, with the help of proprietary software and a unique AI suite dubbed PAIR (Predictive AI Retailing), only available to select merchants at this time. If your head is already spinning, hang on. We sat down with Brandenberg for a full download on how DRINKS is making happy hour better for all of us.

Tell us how DRINKS and PAIR works.

DRINKS is akin to being the operating system for alcohol e-commerce, with a platform that helps retailers, brands and marketplaces with regulatory technology and tax and compliance. And PAIR gives DRINKS clients a way to better tailor alcohol recommendations to shoppers and access customer insights through AI-powered technology that increases engagement, sales, and other core metrics. Taken together, DRINKS is a technology company that powers digital commerce for the U.S. alcohol industry.

How does the system work to help wine lovers make better choices?

We use a combination of AI, computer vision, and natural language processing to provide personalized shopping experiences and data-driven insights. We have deployed at scale, processing billions of privacy-protected data inputs gathered over five years across 6.1 million product recommendations.

PAIR can accurately predict which labels will resonate most with each shopper. Over time, as we analyze more data, our proprietary models will become even more effective.

A recent study based on data from online shoppers showed that your AI tools increased sales by 200%. Can you share insight into these findings?

The study included 275,000 impressions from online shoppers of an online wine retailer over a recent 90-day period. We implemented PAIR to serve recommendations that our technology predicted would better appeal to shoppers compared to a non-AI recommendation engine.

In addition to sales increasing by 200%, engagement grew by 113%, clickthrough rate by 117%, products added to the cart by 118%, and product favoriting by 133%. This data validates what we’ve been working on over the past five years and the eye-popping benefits it can offer.

Does PAIR encourage wine lovers to push beyond their typical choices and try new things?

PAIR is not engineered as a “discovery” platform, with the intended result of broadening the scope of a consumer’s palate. That said, PAIR processes vast amounts of data and can recommend products off the beaten path, so to speak, when it predicts a customer would appreciate seeing more variety.

How should retailers and online marketplaces be utilizing AI / PAIR? What would you say to company executives who are hesitant to use AI?

DRINKS’ goal is to bring the full benefits of relevant technology to the alcohol industry and, more directly, to alcohol e-commerce, which continues to capture more and more share of a $285 billion+, growing market. The results of our latest study make it clear that there’s a massive upside for retailers and online merchants who take advantage of this technology. Think about how people shop in brick-and-mortar stores. Studies show that label design can influence over 80% of such transactions. They choose a wine not just based on if it’s red or white or a certain varietal but by the label. DRINKS’ PAIR technology gives brands and merchants a way to harness this behavior and cater to it online, recommending products most likely to appeal to each individual shopper.

To reference two simple examples such as the application of statistics (sabermetrics) to baseball or ridesharing (Uber) to transportation, the potential impact of technology to be massively disruptive to an entrenched industry should never be underestimated by executives and operators. Simply put, inability or refusal to recognize the impact of technology is what puts companies or industries out of business or, vice versa, rewards adopters to the detriment of those who fight change.

Can you briefly explain the difference between your three products, and who should be using them and why?

DRINKS’ AI suite includes three products:

DRINKS Recommend – personalized wine recommendations based on how consumers subjectively feel about brands. Any company selling alcohol online can benefit from this tech.

DRINKS Predict – AI-driven forecasting of product reception across consumer demographics. Allows producers and retailers to fine tune new products for segments of their customer base.

DRINKS Discover – AI-generated reporting platform that identifies new market opportunities before they become mainstream. It enables producers to make smart investments at the R&D stage of product development.

Today, most producers only know high-level sales data, such as how many bottles they sold by any given account. But with PAIR, they can learn if consumers have added their product to the cart, hovered over it or engaged with it in other ways that may tell producers how effective their labels, bottles and other marketing efforts are. This granular detail can be game-changing in an industry that’s historically limited how much access producers have to shoppers.

PAIR can even go beyond serving up labels for maximum appeal. It can help producers design brands that precisely appeal to their target customers. Producers hesitant about leveraging this technology will miss the benefits of delivering a shopping experience that delights customers at scale and builds customer loyalty.

Who are some of your key partners?

DRINKS partners include Sam’s Club, Instacart, Thrive Market, Macy’s, Misfits Market and more. Via its regulatory technology app on Shopify, DRINKS powers over 300 alcohol producers and retailers just six months after launch.

Like other industries, we’re at the tip of the iceberg with AI. What particularly excites me about AI in beverage alcohol is that it can genuinely solve centuries-old problems for consumers, from “What wine should I buy?”, “What will this product taste like?” to “What should I drink this with?” With millions of choices available and vast differences between products, AI allows consumers to make more-confident purchases as they explore the delightful world of wine.

Wine, NewsKathleen WillcoxJuly 21, 2023AIComment