What’s so Odd about Oddbins?

March 9, 2011 in marketing with 14 Comments

 

Oddbins is in trouble, and it needs a new lease of life, and probably a new investor, to survive, but brands CAN survive repeated near-death experiences if they have something to live for.

Newspapers and the wine media are full of doom and gloom stories about the future of Oddbins, once the UK’s coolest wine retailer. This week they announced that they were closing 39 shops, losing around 200 staff, and that this was probably just the start. The reality is that once the financial situation reaches a state of crisis, trust evaporates and things only get worse. Of course many of us working in the wine business either grew up working or shopping there, so many people are very upset.

Yogi on Meditation.

What seems to be missing from the discussion are positive suggestions on the future for this brand.

I know nothing of the financial or management discussions going on at the moment, but I thought I’d say something that has been on my mind since the current owners, under the management of Simon Baile, bought the business from Castel in 2008.

Let’s face it, the future of mass wine retail on the high street is either finished, or extremely uncertain*. We don’t shop there as often and margins don’t cover extremely high rents and staff costs. This is not the full story though. The Telegraph points out that wine is not alone here:

Every bottle of wine we’ve bought in the supermarket over the last year has been a bottle we haven’t bought from Oddbins and its rapidly diminishing off-licence peers. … Oddbins’ troubles are exactly those that have hit booksellers and record shops nationwide. Let’s hope that there’s not about to be another casualty to add to the list.

We have not stopped buying music, books or films have we? We just stopped buying them on the high street.

I know, I KNOW! Books and music can be ‘consumed’ digitally, but that just made them the first to move the shopping experience online. Our lives are changing and a lot of our shopping is now online. I don’t know about you, but our household rarely visits supermarkets anymore and orders stuff with excellent companies such as Ocado.

Wine is no different. Can you imagine an investor buying into a chain of high street bookshops, music shops or video stores in 2008? I’m sorry, but why did Oddbins try to save hundreds of shops? While they were doing that, people like Rowan Gormley were doing the opposite and establishing businesses like Naked Wines.

Oddbins established its reputation because it made wine accessible to people when the only alternative was “stuffy old wine merchants” – even supermarkets were hardly in the game in those days. The reputation was not really built on “convenience” of high street retail but on the knowledge of staff, the quirkiness of the range, the “coolness” of the Ralph Steadman brand image and the general excitement of discovery. I think I’m right in daying, however, that despite this, even at its peak, Oddbins was never greatly profitable even then!

It’s not death, it is moving on to a better place

Where can you best make that happen today, and try and do it profitably? Not in shops, but online.

The future of the Oddbins brand is to “ascend to a higher plane” and move its MAIN business online and keep a small number of outlets as “experience stores” (in the way Apple & Nike have done so well, and Laithwaites is already doing in wine).

I know it will be a tough transition, and I’m sorry to the many fine folks that will lose their retail jobs, but this would also create a whole new category of online advisor jobs where staff could actually use their wine knowledge and spend less time stacking shelves and dusting bottles.

Threshers tried to cling on to its retail model, and after a protracted series of death throws, it eventually collapsed. That brand didn’t have much to live for. Oddbins is different. I believe, along with many others, that it deserves to continue, but it must go back to its ‘Odd’ roots and embrace the future, not cling to the past.

* Real local shops will survive, but big brands are unlikely to. Even Majestic avoids the actual ‘high street’ and their model is based on finding other local sites.

Related articles
Enhanced by Zemanta

About Robert: Robert McIntosh is a wine blogger and online communicator on WineConversation.com, a prolific twitterer (@thirstforwine) and an occasional contributor to wine magazines as well as speaking at wine events. Robert is co-organiser of the annual European Wine Bloggers Conference and Born Digital Wine Awards, promotes international online wine communication, and advises companies about how to engage through social media. Robert also has some trouble communicating in the third person.

All Posts by  |  Website  |  Twitter  |  Facebook  |  Share By Email
  • The Sediment Blog

    Let’s face it, Oddbins simply failed to keep up with its customers – with our growing wine knowledge, quality expectations, and willingness to buy in greater quantities (which favours the Majestic business model). The very notion of a “specialist off-licence” is now outdated – we buy our wine from wine merchants nowadays, and Oddbins can’t compete in that arena.

    • http://thirstforwine.co.uk thirstforwine

      Interesting position. I’m not sure I totally agree. I think consumers are still desperate for information and help when choosing, but maybe Oddbins were no longer doing it in the way we wanted/expected … at the price we were willing to pay.

      Costs on the high street are higher, so they became even less competitive and this becomes self-fulfilling as fewer people shop there.

      I’m also not convinced the mass of wine consumers are prepared to buy in volume. A growing number will do it at Majestic, which is great, but the supermarket buyer still buys a bottle at a time (except on BOGOF deals).

      We don’t buy from wine merchants (in the main). We buy off the shelf.

      However, if we can convince consumers to buy in greater volume, and be prepared to wait 24-48 hours for delivery, then the potential for variety, value and shopping support (aka ‘education’), then online is the way to go.

      • http://twitter.com/Jonthewine Jon Atkinson

        Hi Rob, like many of my trade brethren I did a stint at Oddbins during the Seagram years which I look back on with great fondness. I feel for their current situation, but can’t help but think that too much damage was done to ‘the brand’ under the ownership of Castel making it very difficult for the current administration. People started shopping elsewhere when they became disillusioned with their (Castel) proposition, & it was always going to be hard to win them back.

        The current management seem very much to have their hearts in the right place, but don’t appear to have the funds to back that up – whether that can be rectified remains to be seen.

        On-line certainly suits a growing number of consumers, but (I hope) there will always be a need for the bricks and mortar wine merchant for those of us that look to have a sociable & enjoyable shopping experience, which can only be achieved on a face to face basis. Quite aside from the value of having a friendly wine (or any other merchant) that will get to know you and your preferences, who hasn’t been ‘caught short’ on the “odd” occasion?

        • http://thirstforwine.co.uk thirstforwine

          I agree with the need for merchants, but I suspect that as others point out, maybe the local merchant might need to be either an ‘independent’ for quality, or a real mass convenience store pushing for lowest market. There isn’t enough money for anything in-between

        • https://worldofbooze.wordpress.com/ Henrycastigione

          I agree with this. I worked for Oddbins just before Castel takeover and the difference in price, range and staff morale afterwards was very sad. What was worse was when the shops became branches of Nicolas and special staff were shipped in from France who could do superciliousness and ignorance at the same time. It’s a mystery to me how those shops stay in business. They’re the Aberdeen Angus Steak Houses of the wine world.

  • http://www.facebook.com/peterwood.thetastingnote Peter Wood

    As an ex Oddbinite, and now as an indy high street retailer, it is sad that it appears that the chain is on a slippery slope to oblivion. Oddbins, like Threshers, appears to be following the trend in chains. In the 70s and 80s they grew, swallowing up independent retailers, then the 90′s they thrived and in the 21st century they die.

    The cost of a high street property is huge, but it doesn’t mean you can’t be competitive. You just have to buy well and work with your suppliers in a way that it is of mutual benefit to you, them and your customer.

    The problem for any chain is if you have a standard shop model you cannot ever maximise every shops potential, as what works in Bristol won’t necessarily work in Bradford. Local shops, run by local people, can change as and when the local customer taste does, but chains cannot offer this flexibility to its outlets. That was one of the problems with Oddbins in the Seagrams days, it allowed its managers too much influence and they had horrific stock level problems and an uncontrollable wine range. Majestic works because they have lower overheads and people have the choice of buy from them by their rules or don’t.

    Online is certainly a way to go for this once great brand and leave high street wine retailing to independent merchants.

    • http://thirstforwine.co.uk thirstforwine

      amen!

  • Nick Stephens

    I agree with you Robert – from a wine merchant’s perspective customers are rightly demanding more knowledge about their wines – which can be more accessible online in an ecommerce wine shop. They can discover info on grapes, regions, wine makers, food and wine pairing etc so that they can then make an informed choice.

    However buying a case of 6 or 12 bottles can sometimes be off putting for customers due to cost . . . you can pick up a bottle or two with your weekly shop at the supermarket. I find that more and more people are turning to wine merchants on the web as the bottles at the supermarket are sub standard to the quality and choice offered online.

    Cheers

    Nick

    • http://thirstforwine.co.uk thirstforwine

      yes, they are, and in time we will find ways around the issues of volume and delivery. For example, paying a small amount into your “wine account” on a regular basis spreads the cost of larger purchases, and deliveries planned ahead of time can be cheaper too, but this will take a change in attitude to wine in general – it means consumers will have to THINK about wine … and we have yet to crack that nut!

  • http://oldparn.com Billicatons

    I think the Apple Store analogy is a good (and rather inspired) one.

    My question is: would independents necessarily fill the vacuum, were Oddbins to close?

    I live in Oxford, which has several Oddbins stores, but is not well provided with independents. I’m sure it’s different in London, but in Oxford Oddbins is often the best option for a single-bottle purchase, say, on the way back from work. Apart from M&S, most in-town supermarket outlets are too small to carry much besides big brands.

    I’m too young to remember pre-Oddbins days, so wondering whether it’s just the case that independents are nonexistent here because they were put out of business, or whether smaller cities don’t necessarily have the demand to sustain them?

    • http://thirstforwine.co.uk thirstforwine

      Don’t know about Oxford specifically, but as so often in the UK, we struggle to keep just local shops. Retail brands seem to grow fast and fill every high street and make them all look the same. There was a period when Oddbins and a few others others (who have since also disappeared) either bought, merged with or knocked out the competition, meaning that there probably were more merchants.

      However, there were also lots of places with no decent merchants where they brought vinous enlightenment!

      Will more merchants fill the vacuum? Maybe, but as I say, the future is not on the high street, and there haven’t been THAT many new ones created from the demise of Threshers, so maybe not (at least not yet).

  • Mark

    To put some numbers on just badly how the high street wine retailer model is broken, I ran the Oddbins King’s Road Branch 4 or 5 years ago. My rent was £102,000 a year which meant I had to sell £750,000 of kit just to break even. I did it but it entailed an awful lot of running just to stand still.

  • http://www.seo-gers.com Bruno

    Moving to a better place…. online is a good opportunity to disseminate information about wine, however how to get people to taste it? (not licking your screen I hope). People who are drinking a “wine”, rarely change! Here (in France) were I live, I have the opportunity to meet winemakers everyday, and talking about the “internet and wine” there is the question popping-up all the time: “how do you make people know your wine? Because knowledge is assimilated to taste – taste buds memory can be increase by tasting different wines – it is important to educate people’s taste buds.
    In a survey made by Winefair.com (in french) it comes out that “knowledgeable people” have tried many different wines, however people who are “gulping wine” are biased to one sort and will not try another wine.
    So Oddbins go the net way with “experiences store” I hope they can really use this to create a real experience for the consumer. Here for the consumer experience we have more and more independent that create small group of winemakers – not co-op!!! This, hopefully, will bring consumer awareness about some of the great wine that the country produces.
    You can see on the 3Dtour at http://www.winefair.com/2011/?lang=En
    if you look at Java Sud Ouest for exemple.

  • http://twitter.com/eclectic_tastes Roger Sleigh

    Couple of issues here for Oddbins I think. Firstly to get value you had to buy volume and thats not convenient from a high street location. Secondly, and I fear this is true for most food retailers, the margins are low compared to other High St goods and so the burden of rents and rates in those locations means that few are viable.