When Tanisha Diggs and Michele Jacobs were classmates at Howard University in Washington, DC, they shared a common aspiration: they would one day open a business.
So in 2022, when the opportunity arose to take over LA Liquors, a local liquor store just down the road from their alma mater, they decided to jump on it. Today, they claim to operate the only women-owned liquor store business in their city.
"Around the time we were going to school, there weren't very many options to buy alcohol from people that looked like us," recalls Diggs. "We wanted to create some diversity in the market, and we wanted to be unique. That's how we started."
A store rooted in the community
"Owning a business has definitely been something I've always wanted to do," says Diggs. "I think it was just a matter of opportunity. Getting the funding, getting the capital, getting everything together, and really just taking a risk. But that's always been in the cards for us."
Along with being a co-owner, Jacobs serves as manager of LA Liquors — using insights from her decade of experience in the beverage industry to run the liquor store.
After just one year in business, Diggs and Jacobs already have a lot to celebrate; LA Liquors is in the top 15 stores in the area in terms of sales volume. Located in the bustling U Street neighborhood — a vibrant stretch of shops, restaurants, and bars just a few blocks from Howard University — the store is particularly popular during celebrations like homecoming and graduation.
But what truly sets LA Liquors apart is its friendly atmosphere. "Our main priority has always been making everyone feel welcome," says Diggs. "That's really what we want to provide — elite customer service to everybody who walks in the door."
The growing importance of online ordering
While the store's location helps bring in steady foot traffic, Diggs and Jacobs knew that to expand their business, they'd need to grow their brand awareness beyond their neighborhood. "A big focus for us is getting our name out there, letting people know we're here," says Jacobs.
Online ordering and delivery can help liquor stores connect with customers who aren’t in the vicinity of the store — and it's becoming popular among consumers. The DoorDash 2023 Alcohol Online Ordering Trends report found that 60% of consumers used on-demand alcohol delivery more often than in the previous year, and one in 10 consumers had used it in the past six months.
The LA Liquors team knew that alcohol delivery could help them reach more customers, but they found that using their own staff to manage orders and make deliveries was time-consuming, costly and difficult to scale. They needed a partner to increase the efficiency of responsible alcohol delivery operations and drive impactful growth.
Opening a new revenue stream with DoorDash
Soon after taking over LA Liquors, Diggs and Jacobs decided to sign up for DoorDash to offer alcohol delivery to customers across Washington, DC. One particular advantage they've noted is DoorDash's built-in compliance with local alcohol delivery laws and regulations, as well as the safety guardrails that DoorDash has in place.
With DoorDash Marketplace, they've already seen impressive results — from 2022 to 2023, LA Liquors nearly doubled their DoorDash sales, and their total DoorDash orders grew by 219%. Over the last year, LA Liquors generated an average of more than $15,000 in sales each month on DoorDash, with an average order size of $30.74.
They also take advantage of DoorDash's suite of marketing tools, including Promotions and Sponsored Listings. In the last 12 months, LA Liquors ran a variety of marketing campaigns on DoorDash which resulted in more than $141,800 in sales and nearly 2,000 new customers.
"DoorDash is very unique in that it has its own marketing and ability to reach customers that quite frankly we wouldn't have been able to reach. So DoorDash has given us the ability to expand and have customers really experience us where we wouldn't have been able to before."
LA Liquors has tested many types of DoorDash promotions including First order, 15% off; Spend $50, get 15% off; First order, $0 delivery fee; and First order, 15% off. On average, the Promotions campaigns generated a 6.3X return on ad spend (ROAS) over the last 12 months.
"We actually talk with DoorDash once a month to go over promotions and see if they're working for us," says Jacobs. "If we feel like it's not doing well, then we try a different one."
Their Sponsored Listings campaign, which is an in-app ad to boost LA Liquors' visibility on DoorDash, achieved a 5.7X ROAS in the last 12 months.
These marketing campaigns help LA Liquors gain new customers and increase order size. The team is also hoping to boost order sizes by starting to offer non-alcoholic items for sale in-store and on DoorDash, such as snacks and pharmacy items.
$15,000+
Average monthly DoorDash sales in the last 12 months
1,947
New customers gained from DoorDash marketing campaigns in the last 12 months
6.3X
average return on ad spend (ROAS) of Promotions campaigns in the last 12 months
"DoorDash is really important for our store — it's one of the main sources of sales. I would go so far as to say it's close to our foot traffic, maybe more."
Increasing sales and profitability through alcohol delivery
Using DoorDash has unlocked a new revenue stream for LA Liquors, but not at the expense of the systems that were already working.
"The main thing is that DoorDash helps bring us revenue, but it doesn't take away from all the other things we're doing to bring in revenue. DoorDash is self-sufficient, which enables us to spread our attention in other ways."
LA Liquors is pleased with the accelerating growth of their DoorDash sales. "It's great that we have been able to see progression with DoorDash," says Diggs. "We started off with low numbers, but month after month, we've been able to increase the amount of orders and volume that we're doing — so we're definitely seeing growth."
As Diggs points out, margins for liquor stores tend to be very low, even when business is steady and product is moving. With the increase in order volume through DoorDash, LA Liquors has been able to get better deals with their suppliers, since they can now buy in bulk. "Instead of ordering a ten-case deal, now we can order a 20-case, which helps to bring our profits up by keeping costs down," says Diggs.
"In order to be profitable you have to do volume, and DoorDash has given us the ability to generate more volume. So when you marry that with our other sources of revenue, it's really helped in terms of increasing profit."
Delivering convenience to customers
The LA Liquors team adopted DoorDash with the goal of broadening their customer base — and that's precisely what they've done. "If we didn't have DoorDash, we would probably just supply the Howard University area that we're in," notes Jacobs. "Now our radius is about 2.8 miles, so we're reaching almost all of Washington, DC."
As Diggs observes, consumers today often opt for the convenience and familiarity of online ordering: "A lot of the time, people don't want to leave their house to get things, especially in nasty weather, and DoorDash definitely fills that need."
A bright future for LA Liquors — and responsible alcohol delivery
Due to its continuing success, the LA Liquors team has more capital to invest back into their liquor store business. That means plans are in the works for new signage, exterior lighting, and renovations to increase square footage — but they also hope to someday expand to new locations.
"Right now, we want to concentrate on what we're doing really well, and when we get to a certain point, we would love to own more stores," says Diggs.
But whether LA Liquors operates one location or many, safe alcohol delivery will remain a core part of its business model. "Personally, I love the concept of alcohol delivery. I like the convenience of having someone actually do my shopping for me," says Diggs. "So if I had to predict, I would say this is the way of the future, this is where we're going, and I think every liquor store should do alcohol delivery."
Jacobs agrees, and is optimistic about where the business is headed. "The sky's the limit," she says. "In any market, people are going to want to drink and have a good time, so we'll be there to serve every single need our customers have."
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