Six months after entering administration, Oddbins is back on the high street under new management and with a fresh strategy to take on the big supermarkets when it comes to wine selling.
In what represents a sea change from the previous regime, which collapsed in April when it ran out of money and failed to secure a company voluntary arrangement with its creditors, the old Oddbins policy of discounting has been scrapped in place of promoting the firm’s position as a wine specialist.
Managing Director (MD) Ayo Akintola, who was appointed by the business’s new owner European Food Brokers (EFB) to lead the retailer’s revised assault on the UK wine market, is confident that personalisation in the wine-selling business is essential if it is to be successful.
“We came to the conclusion that to be a successful and profitable business we have to have a frank and honest conversation with customers about price,” he told Retail Gazette.
“The whole point about three-for-two offers, or whatever the discount may be, is a complete nonsense because it is better to be honest.
“We need to say that a particular wine will cost a certain price Monday through to Sunday because that it what it is worth.
“People may say it’s suicidal but we thought it was about time not to focus on pricing points, which actually cause significant damage to a business.”
Since officially re-launching 37 stores on high streets across the UK last Wednesday, Oddbins has been inviting shoppers in for free blind tastings and asking them what they think the wine is worth.
In November, the wines will appear on shelves at customer-recommended prices, and this process will be repeated regularly in the coming months. It is a method that is sure to stimulate interest at a local level, and one that will form a key part of Oddbins’ proposition going forward.
“We’re looking for a two-way conversation with consumers,” Akintola explained.
“Often retailers just talk to the customer, but we want to ask them what they think of the wine.
“Given where we are in the economic cycle and given shoppers’ level of sophistication, without personalisation there is no point of difference between you and the big boys. This is true whatever sector of the retail industry you operate in.”
The “big boys” reference is of course the label given to the Tesco’s, Asdas and Sainsbury’s of this world, all of whom have expanded and improved their wine ranges in recent years to the detriment of the old Oddbins and its rivals such as Threshers, which collapsed in 2010.
As convenience has started playing a more prominent role in the shopping journey, the leading grocers have benefited through their capacity to offer everything under one roof, but Oddbins thinks its new approach to selling can make it stand out in a crowded market.
“The big boys are going into every sector, but they can’t replicate the knowledge of staff who are specialists in the area, who can make consumers feel at ease,” the MD argued.
“Oddbins needed to distinguish itself; it’s a zero sum game trying to do everything for everybody as you can’t outgun the supermarkets.
“You’ve got to change the rules and operate in a field where your strengths are, and our business proposition of talking to the customer about wine is very good.”
So good, in fact, that upmarket grocer Waitrose has recently introduced a wine advice service and cellar of its own in a number of its larger stores, including its flagship in London’s Canary Wharf.
A move such as this proves that Oddbins will have its work cut out in trying to become the voice of wine on the high street, especially as there are so many places – online and offline - where people can access information about the beverage these days.
To ensure it stands the best possible chance the retailer has spent the last six months selecting a new range of wines, with 375 of the 500 products new to Oddbins. In-store signage and navigational tools have also been improved, making it easier for customers to search for wines “without feeling intimidated”.
EFB chose high street stores, including 19 in London, ten in Scotland and the rest spread across England, that were profitable before April’s administration, and each of the shops has re-launched with fresh ideas just before retail’s busiest period of the year.
“We’re excited about Christmas – it’s always good in the wine trade,” said Akintola, who has been with the company since 1997, rising through the ranks to become Deputy MD at the start of 2011.
Further reasons to remain upbeat come from Oddbins’ parent company’s history.
The organisation snapped up a large percentage of Wine Cellar stores when that company went bust in 2009, and it is experienced in the wine trade with a strong supply chain and distribution facilities already in place, ensuring no further investment is needed in back-end operations.
So from front of house to back office, Oddbins is an altogether different operation from the one that collapsed in April, effectively starting a domino effect of well-know retailers going under, which included Habitat, Focus DIY and Homeform Group.
Indeed, Akintola is keen for the new Oddbins to disassociate itself with the old company, which although it gained a huge following in the 1980s and continued to operate 89 stores until this year, failed to freshen up its brand and adapt to changing consumer requirements in time to avert disaster.
“The easiest way to describe us now is as a start-up – over the last five months we’ve been putting the infrastructure together for a new company,” he said.
“EFB brought me in and the owner has tasked me with building a sustainable profitable business. And that is what I intend to do.”