High street future’s bright

28 May, 2010

Despite the difficulties faced by many wine retailers, the future of the high street is bright, according to a panel of experts at the LIWF.

OLN’s editor Rosie Davenport chaired a debate on the sector’s future, with Oddbins managing director Simon Baile, Butt Naked Drinks managing director Jonathan Butt, owner of Amps Fine Wines Philip Amps and Matthew Dickinson, commercial director at Thierry’s.

The panel agreed the key to success lay in exciting products, customer focus and a point of difference to the big boys.

Baile said it was important to remember that the simple things are the most vital to get right.

“For me, as an independent retailer, it’s flipping obvious – you should never forget your customers and recognise it’s them who pay the bills,” he said.

“Without great products, retailing on the high street doesn’t have a great future. In the past 18-20 months we have introduced nearly 800 new products. That’s a hell of a change. The average bottle price is up £1.50 to £8 – nearly double the supermarkets. We’re not frightening consumers off, quite the reverse – more are coming through the doors.

“Quality, confidence and diversity in the range can work and give you success.”?Baile added: “The other thing we feel is very important is customer service. A lot of retailers don’t do it particularly well because it’s not from the heart.

“My mantra at Oddbins is always treat customers as you wish to be treated – if you want a smiley face, free delivery, free glasses and so on you should do that. If you think your wine retailer should go the extra mile, perhaps you should do the same.

“Make sure what you do every day is fantastic and you’ll be successful. I have no fear of the future of the high street as a result. I think we have a bright future.”?Butt agreed: “Simon is right that the customer is king – in many respects First Quench lost sight of customers together with some wrong decisions being made. There was a bad allocation of funds – instead of going into wine and the estate they were going into the background of the infrastructure and stock replenishment system.”?Butt said if you have a high-street presence, you need a local relationship with customers.

“All the autonomy was taken away from branch managers. They became the end of the supply chain and, unfortunately, not a very good supply chain as they couldn’t get the stock they needed.

“If you go into a store that does a three-for-two and have to wait two weeks for enough stock to come in to furnish customers who want to buy, no one will put up with that behaviour.

“The stores were competitive on price but lost sight of what they were out there to do. After the recession they couldn’t get credit insurance on any stock so had to pay up front, which killed the cashflow,” Butt said.

“We think it’s an exciting time if you forget what the supermarkets are doing, because they are discounting alcohol and almost having an irresponsible approach to it,” said Amps.

“Heavy discounting isn’t the way forward. There are a lot of people who are interested in wine and you have to make your offering interesting and not intimidating. Give people what they are looking for.

“We always try to interact and have bottles open to taste wine.

“The independent sector is hugely exciting and we don’t have to sell on a price point, rather on personality.” Amps added that wines from smaller producers which provide boutique offerings don’t have to be more expensive. “We start at £4.50 and go upwards. Everyone can do it.”?Butt criticised some retailers for not tailoring their offerings. “When you walk into some specialist stores it can be intimidating and higher priced,” he added.

Point of difference?Dickinson pointed out that differentiation was an important factor. “If you’re stocking the same stuff as your competitors, what’s your point of difference? Innovation is about trial and error. You’ve got to try new stuff and keep trying if it doesn’t work. Passion, hand-selling and customer intimacy are crucial. It sounds old-fashioned but that is what drives customers into shops.”?Amps agreed: “First Quench almost had a convenience store offering along the route of what the supermarkets are doing in metro stores, which are always a bit cheaper.

“We saw the writing on the wall for First Quench because of that. It’s specialisation that’s important: decide what you are and find out what customers want without telling them what they want. And don’t try to chase the cash cow.”?Thierry’s Dickinson asked what drives consumer behaviour.

“They aren’t going to fall into the high street,” he said. “Take Romsey, where Thierry’s is based. It’s a posh suburb of Southampton, but if its high street had a face it would be a toothless old crone – a lot of places are boarded up, there are a lot of charity shops and it’s tragic.

“Councils have a responsibility – they don’t want to see high streets looking rubbish. If entrepreneurs are incentivised they will open up shops on the high street.”?Baile said being somewhere people were prepared to go out of their way for was key. “If you don’t have a true destination offering you’ll have a difficult future.

“The majority of First Quench was a convenience offering, not a destination offering. I want people to get in the car and drive five miles to come to our shops. Philip is successful because Amps is a destination and you seek it out. If you haven’t got that you’ve got a tough life ahead.”?Dickinson said: “When I was working at Thresher it was owned by Whitbread and some bright spark in marketing divvied up the business into two main areas: convenience and destination.

“Convenience is about a distress purchase – you’re there because you have to be rather than because you want to be, because you forgot to buy something at Tesco. Destination is about delight, it’s about range and quality.”?Butt said: “The problem child of the business was in the convenience offering, Thresher.

“Wine Rack was relaunched, and demographics and store locations were looked at in terms of which sites would be appropriate to turn into Wine Racks.

“Initially, 180 stores were highlighted as being part of the Wine Rack estate because they fitted the criteria. They took off very well and were in double-digit growth and operating as a separate part of the business.

“Ultimately the cream floated to the top, you got the best people in those stores, those shops had a facelift and received the best wines. Then the business looked at extending the concept because it was working and it was a car crash waiting to happen.

“Those stores were given a quick facelift and staff didn’t have the six months training. There wasn’t enough wine to make them viable.

“If you’re working with smaller producers the amount of wine you can get is finite and that ultimately led to the collapse of the business.”

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