DTC beverage brand Dirty Lemon unveils first cashierless store

Brief:

Dirty Lemon, the beverage brand that has developed recognition through Instagram, opened its first brick-and-mortar store last week. The new cashierless store in New York City is similar to Amazon Go in that shoppers sign up online and link their credit card to their smartphone, according to CNBC.
The direct-to-consumer company describes the store as a "walk-in vending machine" for its line of health-conscious, infused drinks that previously were only available for online ordering. Shoppers can order six-packs of the beverages by texting a special order code to the company, grabbing the pack from the store and walking out. RFID tech is installed in the coolers to track inventory being sold, and a heat map tracker will monitor customers in the store each day.
Later this fall, Dirty Lemon plans to open a special space for VIP customers behind the store's front retailing section. People who order at least one six-pack of beverages a month will gain access to the section, where they can try mixed drinks based on the brand's classic flavors and enjoy live events.

Insight:

Dirty Lemon's cashierless store was built with mobile in mind, stemming from its track record of 95% of sales taking place on mobile devices. This demonstrates that the beverage brand's customers are accustomed to purchasing products on smartphones, pointing to how they'll likely be responsive to high-tech stores.

The company last year opened a pop-up store in the Nolita neighborhood of Manhattan that let customers try out new concoctions, including two best-selling flavors that were later bottled, per Adweek. Dirty Lemon plans to take its store concept to three more locations next year: another in New York and one each in Chicago and Miami. This new focus on physical retail comes as the company announced that it is shifting its entire digital marketing budget to retail in 2019 in order to bring the products to more people and nurture deeper connections with customers.

The move into physical retail is generally contrary to trends of brick-and-mortar chains building up their online and mobile presence to compete with e-commerce companies like Amazon. While viral marketing has helped to spread the word about Dirty Lemon, such campaigns can be difficult to control and aren't guaranteed to reach new audiences. Dirty Lemon CEO Zak Normandin told Adweek that its mobile-focused concept shop is a cost-effective way to reach new customers and solidify the brand's place in their everyday lives as online ad prices continue to rise.

Dirty Lemon's plans to open a dedicated event space in the store comes as retailers seek to provide customers with immersive experiences that some online stores have tried to emulate with augmented and virtual reality. The beverage industry is highly dependent on distribution to get drinks into the hands of people, although Dirty Lemon's line of $10 infused drinks are marketed as a high-end, healthy alternative to soft drinks. A VIP area in the retail location offers a special space for loyal customers to explore what else Dirty Lemon has to offer beverage-wise, while also dipping the company's toes in the experiential marketing space that aims to foster stronger brand connections among its most valuable fans.