Spar (UK) regains top spot in Top 25 UK drinks retail websites

Brought to you by Retailinsider.com and Cookie Reports

It has been a very lively December for drinks retailers with significant movement in the table of the Top 25 UK’s leading drinks retailing websites compared with the very subdued November.

Six businesses held the same positions in the table this month compared with a hefty 12 last time, with Spar (UK) returning to the top spot after dislodging Aldi, according to the rankings of the top UK drinks retailers' websites, produced exclusively for Retailinsider.com by website testing specialist Sitemorse.

The convenience stores group improved on its score of 6.88 out of 10 last month to record a table-topping 7.44 whereas Aldi could only manage 7.08 versus the 7.62 it achieved in November. This resulted in its dropping two places into third spot, with The Whisky Shop also coming ahead of it as it scored 7.10.

This represents a strong performance at the head of the table with three retailers scoring more than seven out of 10 compared with only one in November. This is a score that Sitemorse believes should be the target for all retailers.

To produce the rankings Sitemorse runs automated software that page-by-page reads the first 125 pages of each website and analyses on the basis of six key criteria - function, code quality, user experience, accessibility, performance and SEO capability.

The one newcomer to the top five is Budgens with a creditable 6.22 that pushes Bargain Booze down into sixth spot, despite it scoring the same as last month – 6.12. Another strong performance came from this month’s biggest climber Marks & Spencer that recorded a score of 4.02 compared with 3.66 in November.

This puts it above some of the biggest food and drink retailers in the country, including Tesco in 17^th spot, Asda one place below it in 18^th position, and Waitrose in 20^th spot. This puts the latter only one place above this month’s biggest faller Selfridges, which slid four places into 21^st spot with a score of 2.30.

The three operators below it all remained in the same positions as last month, with Laithwaites, Sunday Times Wine Club and Naked Wines propping up the table with lowly scores. This is disappointing as all three are largely online-only operators.

Only one retailer was excluded from the Sitemorse testing this month, with Sainsbury’s not included in the Top 25 table because of its reliance on JavaScript. In contrast, as discussed, Budgens re-joined the table.

Top 25 Drinks Retail Websites – Dec 2012

Company Name                      +/-       Score out of 10

            Spar (UK)                     +1        7.44

            The Whisky Shop         +1        7.10

            Aldi                              -2         7.08    

            Fortnum & Mason       same   6.50

            Budgens                      new     6.22

            Bargain Booze             -1         6.12

            The Wine Society        -1         5.90

            Lidl                              -1         5.19

            Londis                          -1         4.90

            EH Booth & Co             -1         4.64

            Iceland                         -1         4.38

            Majestic Wine             +1        4.04

            Marks & Spencer        +2        4.02

            The Drink Shop            same   3.77

            BeerMerchants.com   -3         3.70                

            Slurp.co.uk                  +3        3.30

            Tesco                           -1         3.10

            Asda                            same   2.90

            Virgin Wines               +1        2.76

            Waitrose                     +1        2.64

            Selfridges                    -4         2.30

            Laithwaites                  same   2.14

            Sun Times Wine Club  same   1.78

            Naked Wines               same   1.52

Cookie Reports offers a unique level of automation and precision to map retailers' ‘cookie landscape’, producing reports that will help secure legal compliance, combat data leakage and improve site performance.

Insiders' View of the world of headhunting

‘Excerpts from the life of a head-hunter’ working in the leisure/hospitality/retail sectors.

[Unfortunately such is the sensitivity of the head-hunting profession that it is rarely possible that the names of the Insiders’ clients can be divulged]

Near the scene of unexpected meetings

June

Unexpected meeting request

An email came from a chief executive’s PA wishing to arrange a meeting with me in September. I’ve known him for 12 years as he’s progressed through the leisure industry to now run a £100 million turnover private equity-owned business.

September

Covert meeting in low-key venue

Had meeting with the chief executive in a grubby and shady cafe off Leicester Square - hiding from any potentially prying eyes - to discuss the recruitment of his successor. This would allow him to help develop them as the new CEO while allowing him to gradually step back from day-to-day management. We discussed people, what capabilities and quality he’d get for his money. He seemed pleased and wanted me to meet his chairman and to discuss the assignment further in October/November.

New assignment

I begin to arrange interviews for a business development director to sit on the board of a £600 million turnover UK hospitality business. Among the candidates I put forward was a curve ball. Although HR understood my arguments for including this candidate they decided to put them ‘on hold’ for a time.

October

Undertake first interviews

First interviews for the business development director job are completed and there is not a clear front-runner and the curve ball is still on hold. During the ‘feedback conversation’ with the company’s chief executive (at the ungodly hour of 9:30pm on a Friday) we discussed the on hold candidate and his interest in them increased by 100%.

End-October

All quiet from the £100 million chief executive

I emailed him as I’d still not heard back from him. He eventually responded by apologising and hoped all was well with me and that I was having fun! But there was no reference to our meeting, which I then queried with him but again I did not hear anything back.

Mid-November

Still all quiet from the £100 million chief executive

Frustratingly I called him again and still nothing back.

Delivering a curve ball

Curve Ball gets the thumbs-up

Meanwhile the £600 million chief executive calls. He’d just finished lunch with a friend who mentioned the curve ball candidate in terms that perfectly mirrored my views. He therefore proposed meeting them immediately. To my great surprise, following the meeting his decision was to put them on the company’s board – in a different role to what they’d been interviewed for. And the business development director’s job was given to another of the candidates I’d put forward.

End-November

Call from two job candidates

Out of the blue two candidates call for advice – both in the running for the elusive £100 million chief executive assignment that I’m still in the dark about. They’ve signed NDA’s, however they wanted my thoughts on whether the role was right for them. They wanted to get the inside track, which happens regularly in my job. At this point I ring the company’s HR director to see if she knows anything about the assignment and to find out where I’d gone wrong in not been awarded the task. Her words were ‘sounds like the chief executive forgot about your September meeting’! I’ve still not spoken to him about this odd episode. It highlights that recruitment is not without its frustrations.

The ups and downs of recruitment

Whereas the £100 million chief executive’s assignment was very disappointing the other task unexpectedly threw up a great result. We filled the business development director’s position and the curve ball is now up for a final interview and is likely to be appointed to a board position role at the £600 million business in early 2013.

Sponsored column by Nigel Sapsed, director of executive search specialist Sapsed Stevens

Innovative Retailer - Cook

Brought to you by Retailinsider.com and PCMS

The Name: Cook

The Place: 65 stores dotted around the country and its products stocked in lots of farm shops

The Story: Here’s a tip - don’t call co-founder Edward Perry’s headquarters in Kent a factory. He won’t like it. The place where his top of the range frozen meals are produced is a kitchen and that’s all there is to it. This business is pretty much unique in producing and retailing its own stuff – a perfectly vertically integrated model. They produce 80% of everything they sell, the remaining 20% being from other specialist producers.

Edward Perry

And where did it all begin? Back in 1996 he and chef Dale Penfold thought that it was a good idea to open a business selling ‘home made’ quality ready meals on a large scale and haven’t they been proved right because now, 16 odd years later, Cook is poised for greatness (sales up 20% in the first half of this year alone) and they have barely tapped into the great opportunity that is home delivery.  150 people now work in Cook’s kitchen and, rather like Burts chips, they all sign their dishes off individually.

Correct me if I’m wrong but isn’t there still an impression that frozen food is a bit, you know, infra dig? You’re so out of touch. This is the upper end of the market, these customers had mothers (like Perry’s) who cooked their own very good food from scratch in large quantities and then froze it in portions. The assumption is that this is food to be substituted for their own home made when they don’t have time to cook – the same quality is a given. It’s not a hundred party snacks for a fiver.

OK, OK. Now let’s get to the nub of this straight away. How many people are passing this food off as their own? Oh you are mean. Well, quite a few actually. Perry talks of a steady flow of letters asking for recipes from people who have cheated at a dinner party. He estimates 60% of purchases are for everyday use and the remainder for entertaining.

I’m getting the impression we have a high-end quality of customer here? Indeed. They split into two – the 30-40 year old mothers with families and the 55+ age group. Both of which have high disposable incomes, although Perry feels that his prices compare favourably with any luxury supermarket range.

Talking of supermarkets any chance of a listing? Absolutely none. The executives at Cook have been beating them off with a blunt stick for years and most have now got the message. As Mr P says he wants to own the relationship with the customer himself and ‘is not interested in being told how to sell his product by a 25 year old store manager’. Having said that he is very interested in what the supermarkets are doing as his only real competitors are the premium frozen meal ranges at Waitrose, M&S and Sainsbury’s. If you are determined to buy Cook products outside their own shops then try a farm shop. 20% of their turnover is wholesale and the farm shops love them because they are an independent.

Quite. Dare I ask about producing own label food for other retailers? The same applies. And the answer is no. And whilst we’re on the subject the same goes for external investment. The business is committed to staying private and family owned so it can govern its own pace of expansion. As Perry says manufacturing can only be ramped-up at a sensible pace otherwise the quality will be lost.

Well, it’s good to have that sorted out. What are the growth plans in that case? Cook intend to open eight stores per year of which five will be company owned and three franchised. Currently out of 65 stores 32 are franchised, and Cook run all the outlets in the south east where geographically it makes sense for them to have control. There has not been much representation within the M25 but that is all about to change with the arrival of a concept store.

Cook in Muswell Hill

Where? Leafy Muswell Hill, N10.  The shop has an urban feel to it in terms of lighting and décor, it’s on a very prime corner site and most importantly is catering for those who only want to purchase one or two items.

Is that different from the norm? Absolutely. The other shops have been in secondary sites because buying frozen ready meals is just not a spontaneous purchase. It is a planned trip with people spending around £20 on a visit to fill a freezer drawer. If Muswell Hill works then it’s the ticket in to affluent professionals buying dinner on the way home. Kerrching.

So, enlighten me as to the best sellers? Perry says he is often asked what are the summer favourites to which he answers lasagne, fish pie and beef bourguignon. And in winter? Err lasagne, fish pie and beef bourguignon. Still, Cook soldiers on developing new ranges all the time. Brit Pot is one of the latest (kedgeree; fish and chips; beef, tatties & neeps) and January 2013 heralds the new lunchpot range which can all be microwaved from frozen in about five minutes.

  

It’s all go isn’t it? Yup. And let me tell you about home delivery because they are all excited about this one. At the moment it’s 7% of their turnover but there is a very high minimum order level (£70) and it comes in a box delivered by a major carrier. Cook customers are good middle class citizens – lots of excess packaging is a no-no, uninformed van man is a no-no. So a new delivery model is being trialled where a van is attached to a specific shop’s delivery area, hopefully this brings down packaging and minimum order level plus a friendly Cook employee can answer any questions at the door.  Hurrah. The future looks rosy. Perry predicts turnover of around £31 million this year and they have just made some serious director level appointments. As he says ‘we’re going to grow quickly over the next 3-4 years and this is part of growing up’.

PCMS Group is a leading independent supplier of software and services to the retail industry; PCMS Store and Multi-channel solutions have been chosen by over 98 retailers including Arcadia, John Lewis and M&S. 

Movers & Shakers Q&A with Kevin Hanley

Brought to you by Retailinsider.com and K3 Retail

Kevin Hanley, operations director at Direct Wines Group (Laithwaite's)

1. What is the greatest opportunity for your business?

We’re incredibly fortunate to have a very loyal customer base. They value our total focus on making, sourcing and delivering the most exciting and affordable wine that we can. There are millions more wine lovers out there, who would value our passion and service, so we are working to build awareness and affinity of our business amongst these groups through strategic partnerships with the likes of the English Cricket Board and Classic FM.

2. What is the biggest challenge to your business?

From a personal point of view, delivery is a huge challenge. The UK carrier industry has been through a period of upheaval and many of the main players are still unprofitable. In this environment service can be patchy and innovation has been slow. It’s always going to be a big job, but we’re working closely with our partners and innovating with them to deliver on this front.

3. With the benefit of hindsight what would you have done differently so far?

We focused on streamlining our back office systems to make the wine buying process as slick as possible for customers. But with hindsight, we might have done more to make this clearer upfront so that they can see how the improvements are helping them.

4. What is the future of the physical store?

Apple has shown that if you get the retail experience right, stores can become physical embodiments of your brand values. There are numerous other examples across categories where retailers have done something slightly out of the ordinary to create these destination stores. Customers have the opportunity to interact with the products and talk to knowledgeable staff in a way that online retailers can find difficult to replicate. The Arch, our shop at Vinopolis in Borough Market, is a great example. There are always wines available to try, customers get to see the breadth of the range in a spectacular environment and the staff are great and friendly, with a real passion wine.  

5. What will the high street look like in a decade?

Hopefully less like the identikit high streets of the last 10 years as rents fall there are opportunities for new businesses to spring up. My local street has seen a number of small businesses including a fishmonger, and a cheese shop open in the last 12 months. On the main thoroughfares it is likely that brands we don’t currently associate with the high street will start to develop a physical retail presence. In a recent interview Amazon chief executive Jeff Bezos says that bricks and mortar stores are possibly the next step for his business. Virgin Money has started opening high street branches something which would have seemed inconceivable a couple of years ago.

6. Will mobile devices be the primary sales channel in the future?

Mobile is a small but rapidly growing channel for us; it is however, hard to see it being the dominant channel in the near future. It is all about choice and what is appropriate for the customer at that time. Personal service from a Wine Advisor via phone, web chat or in a store will always be a major part of the Laithwaite’s channel mix.

7. What other retail business do you admire?

As a keen cyclist, Wiggle is probably the first one that springs to mind as a pure-play online retailer. They have achieved phenomenal growth in a pretty competitive sector, admittedly on the back of a boom in the cycling market. The website is easy to navigate and buy from and they reward loyalty through improved discounts to their best customers. They have also used event sponsorship and TV advertising in a very targeted way to gain brand awareness.

8. If you hadn’t been a retailer what would you have liked to do?

A wine maker. I think everyone at Laithwaite’s dreams of being a wine buyer or wine maker. The punishing schedule our buyers follow on trips to far flung corners of the world make me think I might be better suited to making it.

9. What marks out of 10 do you give yourself so far for achievement?

There are things I’m proud of but the challenge of keeping the business thriving in what is probably the most intensively competitive wine market in the world means any score I give myself would be accompanied with the dreaded “could do better” of my school days.

10. Who would you place in the Top 20 Multi-channel/e-commerce Movers & Shakers?

As someone who’s always so modest, he might be horrified to read this, but Tony Laithwaite our founder and co-chairman. He created the world’s biggest direct to consumer wine business and is still innovating every day, blogging, tweeting and connecting with customers, producers and the team.

Taking up the challenge of building multi-channel model

German-based multi-channel electricals retailer Gravis is offering discounted prices to special interest groups and companies via password-accessed micro-sites in order to counter the low prices of its online-only rivals.

 

Germany's Gravis: stores only part of the mix

For this retailer of Apple products it is a key development in fighting the challenge from pure-play online merchants who are operating at prices that would deliver only a 4% margin for Gravis if it matched them. Its solution is to offer discounted prices to companies and groups such as students and non-profit organisations 

Dr David Hoeflmayr, chief operating officer at Gravis, says these groups are then given access to clone versions of the main Gravis site that their members or employees can enter to enjoy better prices than those available on the company’s core site and in-store. This enables Gravis to maintain consistent pricing on its main site and its stores.

It is a growing part of its business with 200 to 300 groups currently involved and year-on-year sales growth of 200%: “It is 5%-7% of our total revenues and is growing faster than the [main] website sales. Companies like offering this to their employees.” 

Although these sales generate lesser margin Hoeflmayr says they have the advantage of being zero cost as they require no online marketing and there are also no store rentals to eat into profitability.   

Regular online sales have also been growing fast - at 60% year-on-year - which has helped the top-line and offset the fact that group’s store sales are flat, but the margins remain a challenge.

However Hoeflmayr says help as come from the company’s click & collect-type service, which is very popular, and involves 28% of online customers choosing to pick up their goods in-store.

Once the customers are in-store to collect their goods then there is the opportunity for Gravis’ store teams to sell them other products and services: “They come into the store and we can then do the up-selling. The average basket size of these [click & collect] customers is Euros 600, compared with Euros 300 for in-store customers, and Euros 400 for online shoppers.”

The up-selling and in-store services aspects are vitally important to Gravis as it enables the company to boost the 10% margin it achieves on selling Apple products to an average of 18% per customer transaction.

Apple: takes a big slice of the pie

“We offer lots of services such as repairs in-store, telephone hotlines, and one-on-one training that make us more profits. This 30% of extra revenues doubles the profits of the company,” says Hoeflmayr, adding that the group’s two-year extended warranty is taken up by 80% of in-store customers.

This compares with only 20% online, which highlights the benefits that can be accrued from offering high levels of in-store service. “This is why we differentiate by our service. We’ve a branded environment and we help our customers. We’re positioned as a value-added retailer,” he says.

Another new development for Gravis is the use of customer data to gain insight, although Hoeflmayr admits that “we are just learning how to use it and we’re not sophisticated”. It has a good starting point as it has the addresses of 1.2 million customers, 80,000 subscribers to its online newsletter, and 30,000 people who have downloaded its app and receive regular email updates.

Communications to its customer base have to date included sending cards to celebrate the birthday of the ownership of a computer. But initially a more exciting development has been customer segmentation, with high school and University clubs created.

These groups have been offered discounts and this has generated sales of more than Euros 1 million per month and there are plans to further segment, with the company investigating adding a bargain shoppers club, despite the brand’s high-end positioning.

This interview first appeared on The Retail Bulletin and Hoeflmayr will be presenting at the 4^th Annual Retail Bulletin Multi-channel Summit 2012 in London on February 6.  

Small retailers bear brunt of payment card charges

Some interesting documents have fallen across the desk of Retailinsider.com this past couple of weeks that have highlighted how small retailers are being given an increasingly hard time by their banks.

The way the banks like to keep it

The first came from a small merchant, with annual revenues of less than £1 million, which listed the various fees the company is charged for each of the transaction types it accepts – debit card, credit card and cash etcetera.

The key figure in the document is the 28p it is charged by its bank for accepting debit cards, which is significantly higher than that of larger retailers who face an average charge of 11p per debit card transaction.

The banks have long argued that this differential is a result of them passing on the interchange fees - the charge administered between each of the banks for accepting card-based transactions.

However, this argument has been long flawed as the interchange charged is exactly the same irrespective of the size of the merchant. The banks should at the very least come clean and admit that they are charging small retailers three to four times more than for larger merchants.

It is clear they are making a lot more profits from their dealings with smaller operators. Taking the universal interchange fee of 8p for debit cards then the profit to the banks is 28p minus 8p, which equals a chunky 20p per debit transaction.

This is in contrast to only 3p of profit for a debit transaction accepted by a big retailer - 11p minus 8p.

If this sounds like a rough deal for small operators then things could be about to get a whole lot worse because the second letter to come into the hands of Retailinsider.com signals the fact interchange fee are to be significantly increased.

Most retailers will have received a copy of the letter, which highlights that for debit card transactions that the interchange fee will increase by a sizeable 37.5%.

The implication is that card transaction fees will go up because the banks will not want their margins eroded. Needless to say it wouldn't be any surprise to find the smaller merchants ultimately end up getting a much rawer deal than their larger counterparts.

Debit cards are the main substitute for cash, which retailers have long been sold the story that it is a much more costly payment method to handle than plastic. The reality is that this is untrue.

Cash: not the most expensive option 

Contained within the document from the small retailer is the interesting item that indicates it is charged 60p for every £100 of its cash that is handled by its bank. Performing a simple calculation for 10 debit card transactions valued at an average of £10 each (a total of £100) the transaction charges to the retailer would be £2.80.

This compares with only 60p of banking charges if this same £100 had been accepted by the retailer as 10 transactions accepted in the form of cash.

Based on this stark evidence it is clear that the banks and card schemes have been misleading retailers into thinking the cost of collection of cash is more expensive for retailers than the charges relating to debit cards.

The disappointing side of this is that the government has sought to promote small businesses but it has consistently done little to help in the case of unfair transaction charges for small retailers.

In fact it could be argued that they have actually done the complete opposite because they continue to promote the use of plastic – hence the drive by the government to transfer all benefits payments onto plastic cards.

This must be music to the ears of the banks but will no doubt result in yet more misery for the small retailer as accepting payment from such cards will again cost them more in fees than for the equivalent cash transaction.

Retail Species - The 'entrepreneur with friends'

The Person: Georgie Douthwaite

The Company: Vinnie & D

The Job Title:  Director

The Story: If starting a business with a friend was easy there would be no need for the hundreds of forums offering advice on the subject on the internet. But despite this an awful lot of people do it and among that number are Georgie Douthwaite and friend Becky White. And what’s more they were both pregnant when they made the decision. 

Ah, emotionally sensitive, craving weird sandwiches, that kind of thing? Well, quite. But also going for lots of long walks in the fresh air and debating how they might get back into business when junior arrived. And the result of all this is that in September 2012 Vinnie & D went live selling the British public interesting homewares and gifts for their homes.

So how does the friendship stack up so far? Douthwaite is something of a serial ‘business with friendship’ mixer as the second string to her bow for the last decade has been a company making bespoke granite furnishings for the home which she runs as a franchise in association with a good friend. They have remained so and her secret recipe for success is to involve a third individual.

Another friend? It doesn’t matter who it is. The point is that there is a decision making majority. It’s not two people battling over personal preferences, whichever side has two people ranged on it wins. Simple. They all meet once a week and try to be as open and honest as possible about any potential fallouts.

And who is Vinnie & D’s third party? Jules Stern who deals with the IT and legal side of things. This is the other point about friends working together. Try to be good at different things. Douthwaite is the retail guru, and White is the creative so with equal partnership in the company, which they have funded themselves there is no jostling for position. At the moment of course it’s all hands to the pump for the site launch and whilst being the only one with retail experience can be ‘frustrating’ Douthwaite maintains that all aspects of the business have retail attached in some way.

Pretty different from selling granite shelves. Absolutely but she has done it the right way around. She has learned about retail in a super hard category, literally. Selling high-end bespoke items in showrooms to very discerning customers makes offering greetings cards online look like a walk in the park. She is moving to the online world from a showroom-based scenario where there is a lot of mileage for the final creation not to remotely resemble what the customer had in their head, coupled with plenty of material wastage and the attached high costs.

Well, you only have to watch Grand Designs don’t you? Absolutely. It’s not surprising she describes the world of Vinnie & D as ‘lovely’ but there are also challenges. She says it’s not always easy to maintain a rapport with customers you never see (they send out an e-newsletter to keep in touch) and the photography absolutely has to be right otherwise you will sell precisely nada.

Heart Hottie: hot product on Vinnie & D

And who exactly is going to be buying the gifts on their site? It’s very specific. Thirty-something mums, probably in the London area with significant disposable income to buy something different especially for their men or their children.

Crikey, that is niche. But Mary Portas’ campaign to rejuvenate British manufacturing and design has given them a great entry point for their patriotic slant to attract other people too. Only British designers on the site, and most items made in the UK too, and in this Jubilee and Olympic year that has gone down well. Eventually Douthwaite wants Vinnie & D to be a starting point for up and coming UK student designers but originally it was lots of friends of theirs who had set up crafting businesses that needed a shop front. Now they have people approaching them of course, some from Not On The High Street (NOTHS).

Aha, I was wondering when we’d get to NOTHS.  OK, Douthwaite concedes the businesses are similar but Vinnie & D does not hold stock like NOTHS. And she would like to think that none of the products on her site have been seen anywhere else at all. In addition, she feels that the NOTHS site can feel very busy and one of the main things Vinnie & D wants to offer is ‘a calm and beautiful website’ which is easy to navigate with the photography constantly refreshed.

Super, that’s all settled then. And who may I ask is her own retailer of choice? Douthwaite lives on the south coast and is an online purchaser by nature now because the high street is sadly not where it’s at, but when she just has to get in there and rummage there is only one destination. She beetles up to London and straight in through the doors of Selfridges & Co.

Nice. Now if she can get her business that well known it’s a winner:  Early days but the founders are confident of a busy Christmas. Repeat business is starting to come through and Douthwaite is hopeful that her aim for the company to be at the forefront of people’s minds when buying gifts will be a reality. In terms of marketing there is a push to get celebrities to wear their products but Douthwaite is wary of going too early with a big marketing campaign in case it is ‘in one ear and out the other’ before the name is properly out there. In the meantime they have a huge database of three combined contacts lists to advertise to, and although she admits to being ‘amazed’ by the number of people who take note of social media they will obviously be using its free advertising aspect too.

And what do I need to order now before it runs out of stock? One of the best selling lines so far is the Elvis & Kresse fire-hose range. High-end accessories for men made from decommissioned fire hoses which were going straight to landfill, a share of each sale goes to a fire-fighters charity.

Ah, retail with a heart – Mary Portas would love it. 

Innovative Retailer - Unpackaged

Brought to you by Retailinsider.com and PCMS

The Name: Unpackaged

The Place: The Arthaus Building, Hackney, London E8

The Story: It all started on a market stall on Broadway Market  in 2006 where founder Catherine Conway had the idea of eliminating  packaging on food stuffs and encouraging her customers to bring their own containers. But market stalls only really deal in one thing and people started asking her to stock other stuff. So one thing led to another and a bit of social enterprise funding later and voila - a small but very stylish shop of 450 sq ft appeared in 2007 and was phenomenally successful. As Conway says ‘we were the solution that people were looking for’.  But that Amwell Street site has now closed to escape a restrictive lease.

Catherine Conway

Oh. What next then? A much larger unit of 1,700 sq ft has just opened (December 5) together with the café/bar that Conway always envisaged as being part of the deal. As she puts it people have gone to all this trouble to come laden down with containers, the nice thing to do is to give them somewhere good to relax and eat before the trip home. Unpackaged is moving up in the world.

So now I’m trying to think of something that you can’t refill just to spoil the party: I’ll help you out. Conway thinks that tinned tomatoes really do need a tin to keep them in. But there isn’t much else. Obviously all dry goods are fine and Unpackaged is experimenting with making their own soya milk and rice milk so you can avoid evil Tetrapak. Glass bottles and milk are another new addition. Her chef in the new premises, Kate de Syllas – another market staller – makes her own baked bean, which will be on sale in a bulk container. So there. It’s actually more about customer perception.

Meaning? Well, Unpackaged has come to the conclusion that it is easier for staff to dispense a lot of items. Yogurt for example, they tried buckets and pumps and all sorts but the customer perceived it as unhygienic so now staff will do it for you. In the bar area, although it will not be hidden from the customer that the wine is held in bulk containers, your actual glass of house red (certified anti-mafia no less) will be filled from a glass bottle. It’s a bridge too far to fill the glass from the big vat but as de Syllas points out Unpackaged always has to fight the idea that bulk means poor quality. Like I say, it’s all about perception.

Gravity drop bins in evidence at Unpackaged

And how are Unpackaged perceived by other retailers and suppliers? With a great deal of interest. There are a lot of ‘innovation visits’ going on. Plenty of work done with suppliers to encourage them to provide a packaging free solution and nice green points for companies like Sodastream who have been very helpful in the new bar. Obviously a lot of their suppliers are small independents like Faith In Nature where packaging is easy to control but the Holy Grail is getting the big boys on board. Conway is a real evangelist for this concept and does consultancy for interested parties however un-green they are – the more the merrier for her.

And are the customers of the lentil-eating sandal-wearing variety? Pah. You’re so yesterday. In her original business plan Conway defined three categories 1) the young and ethical 20-somethings 2) the ‘I’m protecting my children’ organic mum and 3) the older Radio 4 generation for whom it is a memory thing. However in reality anyone and everyone are walking through the door. Plenty of people buy portion-by-portion to save money. In geographical terms 40% of them lived within a half mile of the Amwell Street site, 20% were in the north of London and Islington, 20% in Hackney and the east and the last 20% all over the rest of London.

And what does that tell me? It tells you that in time Conway would like to open four outlets, north, south, east, and west London. But that’s mid-term. Long-term there could be concessions in other shops and community start-ups running their own Unpackaged formats. But for now she’s going to concentrate on the new Arthaus customers. She’d like refill rates to be 80% and expects turnover could quadruple from the first shop. There are 70-odd flats above the shop and she wants them to use Unpackaged. Conway likes to get up close and personal with her punters and says she can envisage a time when she has people’s keys and leaves their milk in her refillable glass bottles in their fridge for them.

Crikey. That is close. How often do they come? The top-up shoppers twice a week, the ones who spend £10-£20 come once a week and the monthly ones spend around £40 a time. Bear in mind they are carrying all this back with them and a lot don’t come in cars.

They’ll need that coffee or beer then: Surely will. The shop will be open 8-8, with the café running 8-5 before seamlessly (with a little lighting help) turning into a bar till 11pm. There will be a transition period whilst the local populace gets used to the ‘bring your own cup’ routine which de Syllas is calling the 1,000 cup countdown – a QR code on the cups explaining that if they bring their own cup and keep using it they will get a free drink.  They will also be selling reusable food containers at cost price so people get the idea to keep bringing it back. In the bar tiny tonic bottles are banned so work is being done on developing an alternative. Limoncello and amoretto will be produced on site and a beer eco-keg will be doing a tour of all the local microbreweries.

Phew. Anything else? Packaging which has been produced at great expense out of the earth’s finite resources is held in the hands about 20 seconds before being binned and sent back into the ground as landfill.

Nuff said.

PCMS Group is a leading independent supplier of software and services to the retail industry; PCMS Store and Multi-channel solutions have been chosen by over 98 retailers including Arcadia, John Lewis and M&S. 

Top 25 Drinks Retail Websites prepare for Christmas

Brought to you by Retailinsider.com and Cookie Reports

In the surest sign yet that retailers are keeping their powder dry in preparation for Christmas, an unprecedented 13 companies retain the same positions as last month in the table of the Top 25 UK’s leading drinks retailing websites for November.

This compares to only five retailers maintaining their positions in the table last month and suggests they are avoiding making any major changes or amendments to their websites, which could potentially lead to problems.

Indicative of this trend is the fact the top four retailers remain unchanged from last month, with Aldi again topping the table, according to the rankings of the top UK drinks retailers' websites, produced exclusively for Retailinsider.com by website testing specialist Sitemorse.

To produce the rankings Sitemorse runs automated software that page-by-page reads the first 125 pages of each website and analyses on the basis of six key criteria - function, code quality, user experience, accessibility, performance and SEO capability.

Aldi managed to score 7.62 out of 10 compared with 7.26 in October, which places it almost a full point ahead of second-placed Spar (UK) that managed 6.88. This puts it a shade above The Whisky Shop and Fortnum & Mason.

These top four are fighting off improved performances from a brace of retailers that all moved up the table this month. They are led by Bargain Booze, up one place, The Wine Society, which climbs another notch for the third month running, and Lidl the biggest mover this month with an advance of three places into seventh spot.

These three climbers are among a total of six companies that moved upwards this month, which compares with only three merchants heading skywards in October. Even more striking this month is the fact that only three companies fell compared with a chunky 14 last month.

It has been a rather downbeat month generally for the beers, wines and spirits category as online sales fell 5% between October 2012 and the same month last year (according to the IMRG Capgemini e-Retail Sales Index). Month-on-month there was no change between August and September this year. This compares with a year-on-year increase online of 14% across all categories.

Only one retailer was excluded from the Sitemorse testing this month, with Budgens not included in the Top 25 table because of its reliance on JavaScript. In contrast, Sainsbury's re-joined the table this month, and is positioned in 11th place.

Top 25 Drinks Retail Websites – Nov 2012

Company Name                      +/-       Score out of 10

            Aldi                              same   7.62    

            Spar (UK)                     same   6.88

            The Whisky Shop         same   6.74

            Fortnum & Mason       same   6.50

            Bargain Booze +1        6.12

            The Wine Society        +1        5.54

            Lidl                              +1        5.19

            Londis                          same   5.10

            EH Booth & Co            same   4.64

            Iceland                        +1        4.38

            Sainsbury's                  new     4.35

            BeerMerchants           same   3.96                

            Majestic Wine same   3.84

            The Drink Shop            same   3.77

            Marks & Spencer        same   3.66

            Tesco                           same   3.10

            Selfridges                    same   3.10

            Asda                            +1        3.10

            Slurp.co.uk                  -1         3.04

            Virgin Wines               +1        2.76

            Waitrose                     -1         2.64

            Laithwaites                  same   1.78

            Sun Times Wine Club  +1        1.52

            Naked Wines               -1         1.52

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