Tag Archive - business

The case of Majestic’s big small announcement

I just heard via two sources on Twitter (isn’t it great?) that Majestic are about to radically change their business model and potentially make them an even greater player in the world of wine retailing.

Now Majestic’s minimum purchase it to be halved to only 6 bottles

Until now, Majestic required consumers to buy a minimum of 12 bottles at a time. Their “warehouse” model of large stores, plenty parking and knowledgable staff had  made them a favourite of keen wine drinkers.

However, the vast majority of UK wine drinkers do not buy 12 bottles at a time. Most buy 1 bottle for a specific evening, or maybe 2-3 if on a promotion. This made them a ‘specialist’ as opposed to a regular ‘wine shop’ in the minds of most consumers.

The theory has been that by buying in larger quantities, you could take advantage of more volume deals and get a better price overall for your wine. In practice I wonder quite how much better that price was unless you were really picking the promoted lines, but …

Despite targeting a relatively small number of wine drinkers, Majestic has been enormously successful in the last few years, especially if you compare them to their peers; Oddbins, Wine Rack/Threshers and pretty much any other high street wine retail name. It makes a BIG difference to have 1 customer walk into your shop and buy 12 bottles with an average price around £6-£8 and therefore spending £70-£100 instead of them walking out with a single bottle, no matter how expensive.

… spare a thought for the independent wine merchant struggling to survive

Now Majestic’s minimum purchase it to be halved to only 6 bottles. Clever, or crazy?

  • On one side, getting consumers to move up to buying 6 bottles is easier than jumping from 3 to 12.
  • It means that the wine consumer on a budget who already buys at Majestic might feel less guilty about going back to the store to “only” buy 6
  • Many modern flats do not have space for storing 12 bottles at a time (sad to say)
  • Majestic is obviously hoping that their “£2 off per bottle if you buy 2 or more” type discounts will encourage shoppers to buy more than 6 anyway (I always seemed to buy more than 12 I admit)

However, it risks upsetting the delicate balance they have achieved that has made them successful.

12 bottles was not a ‘legal’ requirement, at least not once you could mix & match your own. It was simply the business saying “you will buy 12 bottles or we won’t sell to you”.

People accepted that, in part because 12 bottles was a psychologically significant number (as the number of bottles in a standard case measure). How will consumers react to this being changed? Happy that it is now “only” 6? Or will they wonder why they have to buy 6 at all, and why they can’t just buy 3, or 1?

Also, I’m certain there were those who bought extra bottles to fill their 12 bottle quota. What happens to those purchases?

It is a bold move that will hopefully attract some of those customers who like wine and knew of Majestic but for whom 12 bottles and the thought of £75-a-visit were a substantial barrier.

Let’s also hope it encourages more consumers to make wine drinking a more planned activity.  A little research can make the appreciation of the wine so much greater.

Finally, spare a thought for the independent wine merchant struggling to survive in your town, village or high street. This potentially makes their life even harder, but maybe you could learn about new wines with Majestic’s offers and education, then go exploring the wines of smaller wineries and regions with the help of your local merchant?

Good luck in your wine adventures!

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Open minds for troubled times

Chair
Come on in for an interview!
Image by tommy forbes via Flickr

I’ve reported, commented and complained before on this blog about how the UK government treats consumers and business when it comes to alcohol.

My position has usually been one of incredulity, cynicism and anger at the decisions being taken by politicians, in particular when it comes to taxation of alcohol.

I’d like to extend an offer to a politician or civil servant to explain to me, in person, what this country’s government is doing, and why.

I was prompted to write this post by the announcement that a UK parliamentary committee was to be set up to examine:

… alcohol-related health problems and the consequences of these for the NHS, plus the role of the alcohol industry, police and government departments in addressing alcohol-related harm. [as well as] … examine “whether the drinking culture in England should change, and, if so, how”. (from just-drinks)

Just my sort of question!

Governments and politicians like to be SEEN to be doing something, no matter how ineffective in practice. In general, I do believe that politicians are scared of talking sense about alcohol (or many matters of real personal choice for that matter) and governments are quite happy to continue to be able raise lots of money from a ‘sin tax‘.

The problem is that the government has become dependent on the money raised from Duty on alcohol. They couch their revenue generation as a “strategy” to combat alcohol abuse whilst damaging businesses that could help to change people’s attitudes to alcohol and still, in my opinion, not doing nearly enough to address the underlying causes of that abusive behaviour.

I think many in the wine business in particular would probably agree.

HOWEVER, I will also admit that my experience is limited. I work with great wines, wines made by people who care about their product and which is sold mainly to those who appreciate them. I don’t have much day to day experience of the front line of a binge-drinking culture that I admit does exist in places in this country.

So I’d like to extend an offer to a politician or civil servant to explain to me, in person, what this country’s government is doing, and why. I don’t want a press release, I want a discussion. I’m prepared to post the results on here, either as a new post or in the comments. I would even consider filming a meeting and putting it on the blog for others to view.

Is that you? Or maybe, you know someone who could come along to chat? Let them know!

I am not a campaigner with an agenda as such. I’m not promising those who agree with me to be the best prepared, most vocal champion of the alcohol business (there are people like the WSTA for that). I am not a politician, nor expert debater. However, the government needs to convince me, and people like me, if we are to support their current approach, and if they can’t, then listen to us about finding another way forward.

I’ll even give you an idea of the questions:

  1. What evidence is there that high duty rates stop young people from drinking too much?
  2. What meaningful dialogue can you point to that shows you admit that alcohol consumption is a perfectly acceptable part of our society & culture in moderation? Have  you ever done anything other than preach?
  3. By focusing on the price/cost mechanic, are you not damaging small, independent importers/retailers who might engender a respect/appreciation for alcohol, and instead driven people to the multiple grocers, with their massive purchasing power to offset that duty cost, where no such education takes place?
  4. Is the excess consumption of alcohol not more closely related to opportunity IN GENERAL, rather than opportunity to buy alcohol? Would fewer kids get blind drunk if you inspired them with alternatives for their time & effort, rather than chastising them?
  5. What about the law-abiding middle classes of moderate consumers who are being criticised for their alcohol consumption? Where is the data to back your 21 units safe limit campaign?

These are just some of the questions off the top of my head. If you have any others you’d like to ask, let me know.

So, then, who’s willing to try and convince me? There’s a chair waiting!

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Reaching the wine drinker

LIWF 2008
Image by RobWinton via Flickr

The UK wine trade has lots of events where we pour, taste, buy and sell wine, but the majority of the big events are “trade only” events where professional buyers, writers and winery representatives such as agents, importers and distributors, get together to do deals.

The great news is that the quality of wine being made is arguably as good as it has ever been, and the buyers themselves are also better qualified to choose wines for their businesses.

But someone is missing from the picture. The drinker.

Of course, the UK consumer is always on the mind of wine makers and importers, and certainly of the businesses that will ultimately sell them the wine. Yet, how often do these businesses make decisions based on feedback directly from their ultimate customers?

One of the reasons I bang on about Social Media for wine so much is that it allows all of us, whatever our role in the wine value chain, to hear directly from a whole range of consumers about their tastes in brands and products, including wine. Today, that audience is still somewhat limited to the more technically minded (i.e. geeky) but this is changing VERY fast.

I am very excited, therefore, about the possibilities offered by the combination of wine and Twitter‘s short, focused and public messaging as is being used by twittertastelive.com – in fact I like it so much I am involved in helping to bring this idea to a broader UK and European audience.

I used this in December as well, but this time we are giving consumers and influencers outside the wine trade the chance to give some feedback on wines during one of the most important UK trade events, Bibendum Wine Ltd’s Annual Tasting. I must state for the record that 1) Bibendum is the company that imports the wines I work for and 2) we will be tasting one of these wines as part of the event, namely the Dinastia Vivanco Crianza. However, no-one will be filtering the results or comments so I hope you’ll accept this minor potential conflict of interest.

From 4pm tomorrow (21st January 2009), there will be a group of food, wine and media bloggers gathered together at Bibendum’s physical event (at the Saatchi Gallery in London) and another 8 or more individuals and groups around the country particpating remotely. Each will taste the three wines and exchange tasting notes, comments, questions and desperate demands for refills using twitter. Click here to read more about “Beyond the Trade“.

Follow along on twitter by following me (@thirstforwine) and the others listed below, and look out for tweets with the code #ttl

I’ll report back on the success, or otherwise, later in the week.

The participants will include:

@bibendumwine
@thirstforwine
@documentally
@sizemore
@loudmouthman
@eatlikeagirl
@hollowlegs
@chrispople
@foodstories
@wmjohn
@bigbluemeanie
@jonthebeef
@mackney
@fraseredwards
@rjbirkin
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Brain Fail

Human brain - please add comment and fav this ...
Image by Gaetan Lee via Flickr

I’m sad to report that my Brain 1.0 crashed this morning.

I had crafted a beautiful post about Twitter and the business benefits of participating in it, including witty comparisons, links to all sorts of relevant articles, statistics and images, and even made a few quote-worthy inserts that would allow you to pass on the article to your friends.

Unfortunately, I sat down this morning to paste this article from Brain 1.0 into Worpress and I discovered that this well crafted article had been corrupted (possibly by tiredness or even the half bottle of wine I had last night). I even attempted to reopen the article in my now rather dated Pen-N-Paper interface, and the entire thing seems to have become one wordy, garbled, incoherent and unresearched mess.

Unfortunately it means I’m going to have to start again, and this post is an attempt to re-format those thoughts and find fresh inspiration.

For those of an impatient disposition, the gist of the article was:

Twitter is a worthy additional tool in any business communication plan, but there are several different ways to approach it, and you need to better understand not what twitter IS, but how it is USED before you prepare that plan.

You do not need to participate in it heavily to benefit. You can simply monitor conversations and use it to respond to questions, and most importantly, respond to any issues directly and in a timely way. This is customer service “gold dust” and creates a great opportunity for word of mouth benefits.

However, as with all social media, you can really benefit from the twitter platform by getting involved, interacting with other individuals and communicating your (personal and business) personality. This is something that takes time, honesty, and a degree of openness most businesses find hard at first. However, it could be transforming for the business by creating a truly loyal group of friends, much more than ‘just’ customers.

OK. I’m off to turn that into something a little more useful and rounded, and to see if anyone has yet brought out an upgrade or replacement for my unreliable Brain.

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London International Shaking Hands Fair

Having spent three days at what used to be called the LIWSF (London International Wine & Spirit Fair) I think it would be fair to say that the most important activity of the three days was not the popping of corks or even scratching of pens on paper (does anyone actually do that anymore?), but the shaking of hands.

Having said that, I have returned from the event feeling positive and excited about what is going on and far from the doom and gloom one might have expected in these troublesome economic and social times.

For the first time in many years I got a chance to get off my stand (more on that experience elsewhere) and attend several seminars, meet interesting people and also taste a couple of wines.

There are two ways to “work the show” – exhibitor and attendee. I have not been an attendee since 2002, and when I am exhibiting I get “in the zone” and struggle to feel comfortable if I am not doing what I came to the show to do – but maybe that is just me.

The good thing is that if you stand still in one place for long enough all those who are furiously running around the show looking for something (and often getting lost in the process) will come past you.

I am often asked whether I had “a good show”, and it is a difficult question to answer.

From a commercial point of view, I somehow doubt much wine is bought and sold at the show that would not be bought or sold anyway – but it does help to know that potential customers and suppliers are all in the same place at the same time. There are also so many innovations, new wines, redesigns, etc. that only the most driven, lucky or high spending will get any chance of getting noticed.

The most important element is “networking”, an old fashioned concept that has not been replaced by the newer “social networking”, which involves being in the right place at the right time, … and shaking hands.

I managed to shake hands with lots of existing customers, which makes me, and them better informed about each others needs and experiences. I shook hands with new customers who can now go away and think about whether they want to do more business with me. I shook hands with some very interesting new contacts at the WSTA, WRAP, Wine Intelligence (I will post about these meetings separately) and more. Last, but not least, I shook hands with a lot of friends I rarely get a chance to see, particularly if they now work in competitor businesses.

All in all, I must say that attending the show was a good experience, and I therefore had “A Good Show”.

Now, off to launch a wine called “handshake” so that every time someone meets up at next year’s event they think of my wine.

(Main photo Shake my Hands courtesy of framboise – some rights reserved)

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