Majestic Wine situation provides opportunity for retailers to fill the void
This coming Saturday is annual Record Store Day. It’s an event when independent record shops get access to (almost exclusively vinyl) special editions of classic and not-so-classic albums that are, initially at least, sold only over the counter. The whole thing is pepped up by in-store performances and signings.
In theory, Record Store Day takes digital out of the equation, celebrating the shop and the physical object as the quintessential elements of pleasure in shopping for music. In practice, a handful of special editions sell out to queuing punters at opening time, and the remainder go online a few weeks later, before a few real dregs are flogged at discount prices the following January. In some cases, Record Store Day special items are even sold by the big companies on their own websites, making a mockery of the whole idea of giving independent shops an edge over Amazon and streaming services.
The unforeseen growth in vinyl record sales in recent years has given many independent record shops a renewed reason to exist. The best have become places not too dissimilar to the cream of independent wine retailing, with listening posts instead of Enomatics, visiting artists in place of winemakers and friendly, approachable staff, who are happy to make recommendations, instead of the grumpy, stuffy, snobby employees of yesteryear.
In the case of both, the digital world has had a massive impact on their operations and viability. Like bottles of wine, vinyl records are bulky, heavy things to lug home, which makes getting them online an attractive proposition. The relative ease of inclusion of product descriptions, customer reviews and “if you like…” links all help to make the digital experience appealing.
Shops, therefore, have to give people a reason to visit beyond just bunging stuff on a shelf with a price stuck to it as they did in the 20th century.
Rowan Gormley seems to think this is an increasingly futile ambition, which is why, just four years after Majestic bought his Naked Wines business and installed him as chief executive, he’s looking to scale down or sell the bricks-and-mortar part of the chain to focus on the company’s digital experience.
Any stores that do remain, it appears, will be rebranded Naked Wines and become mere showrooms for the online business, rather than the sharp end of the business itself. We’ll find out more in June, but store sell-offs and closures are on the cards – perhaps even a sale of the Majestic brand, though realistic prospective buyers seem thin on the ground given the current carnage on the high street and with full-on Brexit still to come.
It will free Naked from ghastly things like business rates and shop team wages to provide Gormley’s online baby with the cash for marketing and customer recruitment, particularly to fund the ambition to crack the US. With Oddbins on its way down the pan again too, the Majestic announcement has led to lots of hand-wringing among observers to the effect that high street wine retailing is heading towards oblivion.
I don’t believe that’s the case, but I do think the successful bricks-and-mortar wine retailer of the future will be a very different beast to what it has been before and that’s going to involve a bit of out-of-the box thinking, even by some of the better operators out there already.
Though none would like to admit it, many of them play to an audience of mid to top-end wine consumers, creating “the sort of shop I’d like to go into”, when really they need to be thinking about the sort of shop the people who buy wine in Waitrose, Tesco or Aldi would like to go into.
Lots of shops have ticketed tastings, but the chance to meet the winemaker or hear the thoughts of the most eloquent member of the shop team appeals only to a very narrow demographic. It may appal some wine shops to think so, but most people aren’t interested, even if they do drink wine on a regular basis. What about in-store tastings with free samples during shop hours? Great, but I wonder how often the reality of delivering such a service matches with the claims that many shops make about doing so.
Enomatics and the like are another way of getting samples to customers, but charging people because of the need to cover the considerable costs of investing in the technology means, like ticketed events, that they mostly appeal to a particular type of hardcore wine enthusiast.
I know what you’re thinking: he’s going to suggest everyone starts selling Hardys and Echo Falls and dropping their pants on price. But appealing to a broader audience doesn’t have to mean that – though there’s nothing wrong with selling wines for £6 or £7 if that’s what some customers want to buy. Any retailer can buy good wine at £20 a bottle, but real specialists should be able to deliver something desirable at under £10 without resorting to supermarket brands. And when shops do, why not have a display of them – “wines for under a tenner” or something like that – near the door or in the window, so people can see that “specialist” doesn’t mean “expensive”.
I’m amazed at how many specialists have fixtures dedicated to niche interests such as “natural” wines, yet don’t highlight simple things that might have broader appeal such as “this week’s top 10 sellers” or “new in”. I know, I know, it takes a lot of work to keep redoing shelves on a regular basis, but no one ever said this was going to be easy. It may not be as personally appealing to a geeky retailer as organising a masterclass on biodynamics in the Languedoc or a food pairing evening with the local artisanal butcher, but it might just be better for business. What’s the point of constantly refreshing your range if you never tell anyone you’re doing it?
Shelf-edge tasting notes: they’re a pain too, right? But they are a boon to under-confident shoppers who don’t want to expose their lack of knowledge in a conversation with someone studying for a WSET Diploma. I’ve often been told they’re too much trouble by retailers who already feature them for all their online stock, though transferring them into the shop seems only to need a printer, a pair of scissors and some card.
Get someone to taste a wine and they’re more likely to buy it – that seems a common sense proposition. But instead of talking about in-store tastings, more wine shops need to actually do them on a more regular basis – not just when the suppliers bung them a couple of bottles to cover the cost. Choose wines you really believe in to promote and take the hit on £20 or so in stock in the knowledge that it could be worth it if you sell £200 worth.
Finally, marketing. If I had a pound for every time I’d been told by a specialist wine shop that “we don’t do marketing” I’d be able to buy the 2019 Record Store Day, 180g, two-LP edition of Captain Beefheart’s Trout Mask Replica. Sometimes there’s a cost issue, of course, but more often it’s said as if marketing is something that carries a stigma, that somehow people will think less – not more – of them for doing so.
The first thing to note is that half the time they are doing marketing anyway, through social media or their email database. The second is that even when they are doing those, they’re only really reaching out to existing customers. Getting them to spend more is one way of building business but getting more people through the door is something else. It might mean biting the bullet and doing local leaflets, press vouchers, bus-stop posters, whatever. “Advertising doesn’t work,” I hear from shops all the time, but try telling that to Sky with its £200 million UK ad spend. What they often mean is that they don’t believe it works because they have no way of measuring it, compared to, say, the number of likes on an Instagram post. But Instagram likes are not footfall and they’re not sales. For all its digital world view, Naked Wines recruits customers by putting a piece of actual paper with a discount on it in book deliveries from Amazon and its marketplace sellers.
Which brings us to word of mouth, which some retailers say is “the only marketing we do”. To which the flippant answer is, it’s not marketing and you don’t do it. But it is certainly a powerful tool: people talk to friends and family and trust in their experiences. But I often wonder whether word of mouth is the chicken or the egg. Is it really a substitute for marketing or just an unintended by-product of good service and a rewarding shopping experience? How do you generate word of mouth until you’ve encouraged people to shop with you in the first place? See above.
Sticking with eggs, apologies if this all sounds a bit like teaching grandma to suck them, but I’m convinced these are some of the – relatively minor – fault lines and barriers that stand between failure/moderate success and, well, a bit more success: “small margins”, as excuse-seeking football managers are prone to saying these days. Some of these things are in such plain sight that I’m convinced some wine retailers don’t even notice them. Others, while claiming that their “philosophy” or “ethos” is not to be too stuffy, probably think they’re beneath them. But they’re all things that the very best in wine retailing are already engaged in – and they all have parallels in selling physical copies of music that the best participants in Record Store Day use to bring their shops to life.
Majestic and Oddbins’ demises are sad for customers and employees but there’s a massive opportunity for retailers with flair and energy to fill the void.