A number of commentators predicted that Majestic Wine’s takeover of Naked Wines would enable it to supercharge its online growth, but new boss Rowan Gormley wants to end Majestic’s reporting of online sales.
Talking to The Grocer after Majestic announced its annual results yesterday, Gormley intends to focus getting Majestic’s in-store proposition right rather than ramping up online sales volumes.
“To be honest I think the proportion of sales that get placed on the website is not a useful statistic and is not one that I want to report or manage,” he said.
“A key driver for the online channel should be getting customers back into the stores where they can taste the wines, receive high quality service from our staff and explore a broader range,” he explained. “Therefore reporting the percentage of orders placed online seems to produce the wrong kind of behaviour – you end up trying to compete with the shops.”
While Gormley wants to pursue a multi-channel approach – designed to enable customers to order their wine in the way that’s most convenient for them – much of the focus on its ongoing strategic review is on improving the store proposition and profitability.
A key plank of this strategy is a plan to trial new customer-focussed store layouts and branding
“Customers are telling us that they find the warehouse format intimidating and are not sure if Majestic is a retailer or wholesaler,” Gormley said. “They love the staff, they love the tastings. So we’re looking at creating simple format stores which are easier to shop in and built around tastings and giving staff the opportunity to show off the brilliant service they can provide.”
Part of this is the headline grabbing trial of single bottle purchases – first broken in The Grocer last month.
Majestic is also trialling a smaller format store in London, that Gormley said could help it satisfy the demand for multi-channel shopping.
“In a world where people are more comfortable with home delivery, there are times when you want to be able to reverse a car open the boot and fill it with wine but there are also times it’s preferable for someone else to do heavy lifting and drop it off at your house for you,” he said. “So people can come into small format stores, make their buying decisions and get their wine delivered as we’ve got a number of other stores in London already with delivery capabilities.”
He said the smaller format stores could be a good route to expansion in key locations, given rising property prices and resultant scarcity of 3,000 sq. ft. sites with car-parking.
As part of this strategy reformulation, Majestic is cutting its maximum estate ambitions to 225-250 stores from its previously stated aim of 330. “We want more customers,” he said. “But we’d rather they came through our existing store network rather than building more stores to get them in.”
At the time of the Naked takeover in April, analysts pointed to the potential for Majestic to grow internationally, given Naked was already active in the US and Australian markets.
However, Gormley said there were currently no plans to expand Majestic’s international operations and growth in the US and Australia would continue to be solely via Naked’s existing operations.