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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Oddbins put up the “SOLD” sign yesterday (see here, and here). Really, for those who have been following this (including me), it was not a surprise. What might be a surprise was who bought it. Ex Cellar.

Who?

Well, I can’t claim to be clued up about all the businesses out there, but this one is pretty small, with only 2 outlets BUT … it has a particularly powerful motivator, the kind of thing that might be needed to turn around the performance of a business like Oddbins. The family name.

Ex cellar is run by the son of the founder of Oddbins, Simon Baille.

I come across a phenomenon regularly both in my professional life and my personal experiences. The businesses that impress me most are those where everyone I come into contact with are motivated to make the ‘relationship’ with me (the customer, or supplier) a success because it is good for the business, and for them personally.

I’m sure that seems like common sense, but how many times are you served in a restaurant by someone who obviously is there only for the money and really is only doing the bare minimum? Instead, think how you feel when you walk into a small business and are served by the owner who does everything to please you and make you feel important – because you are.

The best larger businesses manage to engender that feeling even when you are being served by an employee, not the owner, but that employee is fully committed to the business and to the relationship.

Oddbins USED to have this. There was a camaraderie, a pioneering spirit and a sense of fun that was shared amongst all stores. Even though they were not running a small, independent local store, you still felt like it was, but still got the benefit of great buyers sourcing interesting stuff from all around the world.

When it lost that sense of fun, that commitment, it lost its USP and it became just another retailer. Even the mightiest can fall at this hurdle (Starbucks is on the retreat, and McDonalds has been for some years too).

I hope that the new owners can use the family link to recreate that personal commitment from the staff to the business that will make Oddbins a great source of wine again. It is not going to be easy, but all of a sudden, there is at least the potential for this to happen.

If I could make a suggestion though, I would suggest that the developers of the ex cellar website do not get the job of redesigning the Oddbins site! If you need contacts, let me know!

I’ve been reading a fair bit recently about the change in the fortunes and the reputation of Oddbins. It made me think about where I got started with wine.

An important question came to my mind, which I believe is very important to The Wine Conversation.

“Where is it cool to buy wine?”

Plenty of places will sell you wine, but where do people WANT to go and buy it? Once upon a time, and one of the main reasons the wine culture in the UK became ‘cool’, that place was Oddbins. They may not have been everywhere yet, but anyone interested in wine, particularly if you were younger and wanting to know more about the wine world, would know the name ODDBINS.

It was a place to hang out and find all sorts of weird and wonderful, and just affordable, wine discoveries. Australia. Chile. South Africa. California. Exotic names and brands.

Not only were the wines available, but you could be certain that the person behind the counter, and very often not behind the counter but on the shop floor ready to talk to you, would know a great deal. They would have just tasted some “amazing new listing” that they could recommend.

My wife (girlfriend at the time of course) would know that if I went in “just to browse” I would certainly come out with a bottle of something.

Where are they, and their successors today?

Majestic is certainly one of the most successful. Their ‘by the case’ formula is very good for the bottom line, and profitability and confidence help to keep that success going. But 12 bottles is too much for a student or young person just starting out with wine. I was worried about spending £7, never mind £50.

I believe that when he moved to take charge of wine (amongst other things) at Tesco, Dan Jago said that his aim, and I paraphrase slightly, was to make it the kind of place even those in the wine trade would be happy to buy their wine. He has certainly overseen an interesting expansion of their range, I can’t fault that. Unfortunately, I personally can’t see Tesco or any supermarket being a ‘cool’ place to buy your wine, however good the range (he may well disagree).

Independent Merchants, small shops run by enthusiastic individuals, are certainly out there, but the market is very fragmented and their power to reach out to new consumers is limited. Many also find them quite daunting – an unknown quantity where one’s own lack of knowledge might be sneered at.

Can anyone step in? Threshers seem more intent on becoming convenience stores. Nicolas’ exclusive focus on French wines is insanity in the current climate.

One final alternative are the mail order and internet merchants – and here I’m mainly thinking of Direct Wines / Sunday Times Wine Club / Laithwaites / Virgin. This is a growing area for selling wine, but no-one has yet become THE place to go and buy wine. However, this is something to explore further. Many are vying to be the Amazon of wine retailing.

Maybe Oddbins will finally turn it around, who knows, but it will take a great effort, but who else is there?

So, where do you buy your wine?