Justin Robinson of Drizly and Lantern: 5 Things You Need To Know To Create A Highly Successful E-Commerce Business
An Interview With Jerome Knyszewski
Continue to invest in our consumer-facing experience and our delivery technology, which is our first priority. While brands may not be able to beat Amazon or Walmart on speed of delivery, or emerging international competitors on price, they can compete on delivery and win on the depth and quality of experience through personalization.
As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing Justin Robinson, Co-Founder of Drizly, North America’s largest e-commerce alcohol marketplace, as well as the Co-Founder of Lantern, the leading on-demand cannabis e-commerce marketplace and home delivery platform in the U.S.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Eight years ago, Drizly started as a simple text from one friend to another: “Why can’t you get alcohol delivered?” When we realized that alcohol delivery was, in fact, legal, we set out with a little bit of luck and a lotta bit of determination to build a three-tier compliant technology company that would change the way we shop for beer, wine, and spirits.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
We started Drizly in 2012 to make alcohol delivery a reality. As state-by-state cannabis legalization became increasingly normalized, we found that people started to ask us about entering the category. At that time, the answer was always no.
However, in July 2017 when the law legalizing recreational cannabis in Massachusetts (our home state) was signed into effect, we began to reconsider. In 2018 and 2019, we really started looking at data for consumer crossover and regulatory crossover. There are plenty of regulations on the cannabis side, especially with delivery, that are the same as alcohol regulations. We also looked at data around consumer crossover in states where recreational cannabis is legal.
Those two things helped us decide that it was time to enter the cannabis market. In May 2020, we launched Lantern as the first on-demand cannabis e-commerce company in the state of Massachusetts, and we now operate in additional states such as Michigan and Colorado. Lantern is a separate company that operates independently under the Drizly umbrella.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
The early days were tough for sure. To start, everyone (friends and family included) were doubtful that we could pull it off. When we started Drizly, we didn’t have a retailer onboard for the first nine months. It was extremely difficult to not have one side of the marketplace say “yes.”
Once we officially launched, I can’t count the number of days we went without an order for the first six months. We’d be in the store or at the Starbucks down the street working, hoping and praying for orders. The hope came from our early customers — they were small but mighty. The ones that were repeat customers, who would put up with our suboptimal app and sometimes suboptimal delivery experience, kept us going. It wasn’t a group of people congregated in one place. They were dispersed, but we knew when we showed up at their house, we saw their smiles, we saw them repeat for date night and then for a party with friends or at work. That always kept us going.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Today, Drizly is the largest online marketplace for alcohol in North America. Our purpose is to be there when it matters — committed to life’s moments and the people who create them. We partner with thousands of retailers in more than 1,400 cities to empower them to grow their businesses and make our customers’ good times better. Drizly is available to 100M+ customers and counting across the U.S. and Canada, offering a rich e-commerce shopping experience with personalized content, competitive and transparent pricing, and an unrivaled selection.
Drizly’s leadership in alcohol e-commerce delivery and 350% YoY growth in 2020, paired with Lantern’s launch in two markets and anticipated expansion to serve adult-use consumers in MA, MI and CO, positions us among the leading cannabis delivery services in the U.S.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
We used the walls of our first $150/month office as a whiteboard — sharpy everywhere. We learned that one coat of white paint doesn’t cover sharpy. For Lantern, we were teed up to launch around the second week of March 2020. That didn’t happen, but wow did we learn a lot about cannabis delivery through the pandemic.
What do you think makes your company stand out? Can you share a story?
Backed by Drizly, Lantern is able to leverage seven years’ worth of delivery technology and operational expertise. We’re now able to apply this expertise and advanced, innovative delivery technology together with licensed dispensaries to the cannabis industry. What sets Lantern apart is how we’re able to empower dispensaries to implement efficient and scalable delivery operations, which allows for flexibility across markets with regard to regulations.
Lantern is 100% focused on providing a best-in-class technology platform and service that connects consumers to dispensaries. From a consumer perspective, this allows us to be very concentrated on the front-end consumer experience. Lantern brings a familiar, intuitive, frictionless e-commerce shopping experience to the consumer that they already know and love, similar to the shopping experiences they have in any other category. What sets Lantern apart is customer-led, product-first shopping and discovery — customers discover the product that is right for them by browsing strains, reading reviews, and being matched to products via our Discovery Tool. Cannabis can be complicated but shopping for it doesn’t have to be. In this way, Lantern is positioned to bring both dispensaries and brands closer to their consumers online.
As we work closely with dispensaries and regulatory bodies, what also sets Lantern apart is our deep commitment to and involvement in social equity work. This includes advocacy with state and local governments, our delivery incubator program in MA, industry partnerships, and Lantern team member time spent volunteering to mentor social equity entrepreneurs. It’s a reason why we’re excited to be in this space.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
See the forest through the trees and everyone around you will be way more motivated — that’s a big one for us personally and anyone involved in Lantern. If you’re working for more than just profit, to truly help people build their own businesses, there is nothing more rewarding.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?
In the cannabis industry, the pandemic accelerated the shift to e-commerce and delivery. Delivery saw an incredible uptick in the wake of the COVID-19 pandemic. In the states where we operate, curbside pickup or delivery were the only ways to purchase, with delivery being the much easier and more convenient way to shop.
We saw average order size increase significantly in March and April as people stocked up due to the uncertainty of whether dispensaries would be allowed to stay open. In Massachusetts, when recreational dispensaries were closed for a few months, the rate of medical cards being issued also grew dramatically.
Even in emerging markets, consumers’ delivery expectations are influenced by Amazon, Instacart, and meal delivery services. What’s exciting to us is how quickly delivery is pushing the industry to evolve, becoming more mainstream and improving accessibility to a wider range of consumers.
Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
Continue to invest in our consumer-facing experience and our delivery technology, which is our first priority. While brands may not be able to beat Amazon or Walmart on speed of delivery, or emerging international competitors on price, they can compete on delivery and win on the depth and quality of experience through personalization.
Today, every business needs to offer some additional consumer value proposition beyond their core service in order to compete. Emerging industries, like cannabis, are at a precipice as legalization opens up the avenues for innovation, and as technology and access accelerate market maturity. The evolution, though, is the same as other industries: consumer-focused companies that evolve from industries that are commodity-driven (cannabis), using personalization as a means to streamline their operations and understand their customers, will ultimately deliver experiences that are more in-tune with their needs.
Never has there ever been a winner take all market. The opportunity is to build a best-in-class experience in your vertical, go above and beyond. Cannabis is different from Nerf Guns, dental floss, and dart boards. It’s a consumable, it’s a new category folks are unfamiliar with, and the regulation is appropriately exhausting. It deserves it’s own marketplace to really scream authority and safety, and that’s what Lantern is here for.
In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?
Creating the referral flywheel is much harder than people expect. Getting trial is very hard, but then getting that customer to refer 2 new customers is what will a) kick your ecommerce business into high gear and b) help to acquire customers profitably. It requires the product being so good that the customer has to tell other people. That’s hard for any business, but especially one designed to exist without any human interaction.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?
The benefit of Lantern’s marketplace model is that it puts the power in consumers’ hands to choose what they prioritize on their cannabis journey: effects, product, price, availability, retailer, brand. The challenges facing the cannabis industry are unlike those of any traditional industry. Today, dispensaries (retailers) are the core customer interaction moments in understanding products and effects, but there’s little to no consistency in recommendations or service. This is only made more complicated by the fact that the product itself is always changing, and the ways that a product impacts a customer is unique to their DNA.
It’s so important for us to understand consumers’ preferences to develop an intuitive, personalized front-end and education-rich ecommerce experience. Notably lacking in cannabis, as with many other industries, is the ability to understand, at an individual level, what products are right for each customer. Because of this, the quality of product information is imperative to our customers’ ability to understand what products are right for them. We believe in the value of ratings and reviews to increase conversion rates, which allow consumers to have a sense of how someone likes a product with similar preferences and needs.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?
To start, by being a trusted brand and earning that consumer confidence. For instance, cannabis is still an emerging market — there’s still little standardization and consumers don’t have brand affinity (yet) for cannabis brands in the way they do in alcohol. The cannabis consumer shops differently and needs to know a lot more about the products, consumption methods, and the effects in order to make an informed purchase decision.
Cannabis is also an industry that’s been politically weaponized for so long, and those stigmas and stereotypes still exist today. Our role as a brand is to help customers navigate their cannabis journey with transparency and knowledge they can have confidence in. As well, to change these perceptions, and to empower our customers with the knowledge they need to understand what type of cannabis products are best suited for their needs.
At Lantern, We have an incredible opportunity to connect our customers’ personal needs through technology and elevate service in a way that allows us to understand and deliver on those needs in a personal and responsible manner.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?
All reviews, good or critical, are equally important and can be equally positive or negative moments for a brand. That feedback loop is critical to building consumer trust and credibility. However, it’s how a brand responds to consumer feedback that ultimately determines how elevated or damaged its reputation becomes. It’s always important that a brand is transparent, prompt, sincere and accountable in its response to positive and negative feedback.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Find ways to start for-profit companies that genuinely help people and balance purpose with profit. I believe that B Corps are the present and future. The economic model isn’t broken, it just needs more thoughtful, better intentioned leaders and a better educated consumer base. We are getting there, but balancing profit with purpose has a pretty good chance of doing the most good.
How can our readers further follow you online?
This was very inspiring. Thank you so much for the time you spent with this!
