What's Wrong With LCBO Home Delivery or: How I Learned to Stop Waiting and Walk Down the Street
By Vincent Lui
November 2, 2016The LCBO announced today that their alcohol delivery service, launched at the end of July, is only getting 80 orders a day… which has amounted to the equivalent of about 10 percent of what they lose to theft annually. This is quite surprising, as I actually expected the number of online orders to be lower and the cost of theft to be much higher. Pessimistic? Sure, but here is why it's just not generating sales:
Who LCBO’s home delivery is good for:- People looking for hard to find bottles of alcohol not carried in most stores.
- People who live in the middle of nowhere.
- People throwing a party who have the foresight to plan ahead and/or don’t want to carry a box of booze on the TTC.
- Everyone else.
If you live in the city, aren’t looking to get your hands on small batch bottles/vintages, and aren’t throwing a party where your guests don’t bring alcohol themselves cause they’re terrible/lazy people, you have no reason to use the LCBO delivery service.
Why? Cause the LCBO home delivery has a $50 order minimum, costs $12, and takes up to three days to get to you. Yes, three days. You can order a crate of diapers from Amazon and have it ship across the country cheaper and faster than a case of beer from down the street. Let’s break down each of the issues.
$50 minimum: If you are consistently spending $50 on alcohol every week, you’re probably running an underground bar. It's easy to run up a $50 bill at a bar or restaurant but you get a lot more bang for your buck buying alcohol retail and most people will buy a case of beer or a couple bottles of wine a week, which isn’t enough to even be eligible for this service. Sure, for special occasions you'll buy more, but banking on people who throw parties nonstop and alcoholics to be your regulars seems like a terrible business plan.
Delivery fee: The $12 fee is huge, considering you still have to hit the minimum. That’s the cost of an extra six-pack on top of the two-four you ordered, when all you really wanted was a couple beers. And it’s not even a flat $12, there’s tax on it.
Up to three day wait: Seriously, three days. If the $50 minimum and $12 fee haven’t swayed you from the impulse buy, this certain stops it cold. There have been times where I would have been more than willing to pay $12 extra for an extra bottle of alcohol because no one wants to leave a party for a booze run or, you know, put on pants to leave the house to get a few more beers. This three-day delay effectively cuts out the most lucrative market for alcohol sales -- people who are looking for alcohol now. Let’s be honest, most of us wouldn’t pass the marshmallow test sober on a good day and we continuously shell out good money for convenience. Three days later isn’t convenient for anybody.
Home delivery for booze isn’t a new thing. A quick google search will show a ridiculous amount of services. There’s even an app (Thirstie) that lets you order delivery from your phone. They charge around $10 and usually deliver within a couple hours. That's less than $12, no minimum prder, and not three days later. This is on top of all the food delivery places that can be talked into swinging by a liquor store on the way over for an extra fiver in tips. Is there any wonder why the LCBO home delivery sales are slow?
The main problem seems to be that the LCBO is modeling themselves after other e-com sites without realizing that they are not like other retailers. I do most of my shopping online because the closest Canadian Tire/Home Depot/clothing store is at least half an hour out of my way. However, I pass two liquor stores on my daily commute, and I only live a fifteen minute walk away. Add in the fact that grocery stores have started stocking beer and wine and there are now four places on my walk home from work where I can buy booze for $12 cheaper and have it three days sooner than this home delivery.
If the LCBO wants this to take off, they’ll need to cut the delivery time down to same-day delivery and eliminate either the $50 minimum or $12 delivery charge. I mean, even Walmart waives the shipping charges on $50+ orders. To make it worthwhile to use, you either have to have a wide range of exclusive items, a savings of sorts, or enough of a convenience to justify the cost, none of which is being offered right now for 99% of their target market. When you have less of a unique selling proposition than walking down the street, it's amazing that there are even 80 orders a day.
My advice for the LCBO: Get on Ritual. Seriously. If I could order my alcohol from my phone and be in and out of the LCBO in under five minutes, I would gladly pay a premium for not having to hunt around the aisles or deal with the 30 min+ line ups on weekends. A few beer stores are already doing it since it makes sense, and, you know, actually serves a need.
Three days. SMH.
Showing 4 Most Recent Comments
View allVincent: I just made up an article from no where, RFD, where is my cheque?
Very sweeping style of writing. Someone tells me what's wrong with making a claim like this: "but banking on people who throw parties nonstop and alcoholics to be your regulars seems like a terrible business plan."
SMH.
It's not for someone who wants a case of beer or bottle of domestic liquor, but to access one of the largest collections of wine/spirits available for regular consumers in the world. The LCBO is well aware of the services already available locally, this is not a competing service.
These deliveries will be made by Canada Post, I think $12 is more than reasonable to have something shipped to your door from who knows where in the province, let alone a large order.