Future of wine retail is face-to-face but not ‘necessarily’ bricks-and-mortar, Majestic boss claims

The future of UK wine retail is a mixture of face-to-face and experiential events such as pop-ups at festivals rather than bricks and mortar, the boss of Majestic Wines has claimed as the company looks to divest of its UK retail business arm to focus on its expanding internet and international business, Naked Wines.

Speaking to the drinks business today, Majestic CEO Rowan Gormley argued that in future, bricks and mortar estates would be “less important” to retailers than face-to-face events, in whatever form that took.

There’s lots of speculation about what stores will look like in future, but I think it’s entirely feasible it will be pop-up and concessions and tasting cards at festivals rather than a 3,000 sq ft [on an] industrial estate,” he told db.

As a result of the fundamental reason behind the company’s dramatic change of business strategy which was announced this week was the change in customers’ behaviour.

“People will shop online if they want convenience, and if they come in store they want an experience,” he told db.

“That means a 3,000 sq. ft. warehouses piled to the roof filled with wine ain’t [sic] the future – but the people in those stores [are]. I firmly believe face-to-face has an important future, and to deliver that you need the right people.

“People inside the stores have an important future, four walls and a roof, not necessarily,” he said.

It was increasingly about “an experience rather than flogging wine” he argued, which required a more imaginative approach.

“I’m quite sure that it is doable but it does require original thinking,” he said.

As an example he pointed to Majestic’s Summertown store, in which only half the store contains wine, the other half consisting of a tasting area. Wines are grouped by taste style rather than grape or country to make it easier for customers to be matched to their ideal style and expand their repertoire of wines they might not otherwise try.

“The number of people who turn up and we find that they love Californian wine, but wouldn’t ask for it in a million years as they think it’s sweet and over-alcoholed – but when they blind taste it, they realise they like that style of wine. We’re also selling a lot of Grüner Veltliner to people who like Sauvignon Blanc, but they wouldn’t have come in and asked for Grüner Veltliner,” he noted.

The company has already revealed it will launch a new ‘face-to-face recruitment channel” for Naked, and also ‘migrate’ some Majestic consumers to the Naked brand, and Gormley argued that the customer bases were not as far apart as some analysts believed.

“If you go back five years, the traditional Majestic customer was quite different to who it is today – the received wisdom was that people wanted supermarket brands, but we’ve proved pretty conclusively that they are much more interested in genuine, authentic wines. The received wisdom was that they wouldn’t go online – that’s also proved to be completely untrue. So whereas four years ago the received wisdom said there were two very different customer-bases [for Majestic and Naked], over the four years, actually the proposition have become much closer than they were.”

 

Click here for our interview with Gormley and for our analysis of the changing direction of the company, see here.

2 Responses to “Future of wine retail is face-to-face but not ‘necessarily’ bricks-and-mortar, Majestic boss claims”

  1. Charles Crawfurd says:

    If they plan to hold tastings and other ‘experiences’ you are still going to need some bricks and mortar, albeit maybe different size and format as well and numbers. On line is certainly convenient but for urban dwellers and/or people with limited storage place, the convenience of being able to buy the wine they want at the time they need it is also a necessary convenience.
    The more upmarket shopper is possibly more likely to be interested in ‘genuine authentic wines’ (which begs the question what the others are selling!) but I can’t see the major supermarkets losing too many of their target market either.
    Time will tell if this is a good decision but for the moment if I was an investor (which I am not) I would need a lot more convincing than what I have heard thus far.

  2. Robert Smith says:

    Seriously a terrinle idea there is a reason Majestic has survived so long its what the market wants! Mr Gormley is basically asset stripping Majestic to fund his failed pet project Naked Wines, everyone I talk to will not and do not want to buy wine via a subscription listen to your customers and stop this vanity project and do what Majestic do well sell wine in store.

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