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Majestic Wines has been in the news this week,with the slowing economy hitting the company's pre tax profits.
Despite the drop in offline sales, Majestic continues to grow online, with an impressive 11.5% year on year increase in website orders compared with last year.
I have been talking to Majestic Wines' e-commerce manager Richard Weaver about the company's approach to selling wine online...
How long has Majestic Wines been selling online?
We’ve had our e-commerce operation for nine years, and it has always been the fastest growing part of the business and that continues to be the case.
If I look at the competitive landscape for wine online now, many weren’t around when we started. While small specialist wine sellers were our initial competitors, it is now dominated by the same names as on the high street; supermarkets, as well as Laithwaites.
What is your approach to selling wine online?
We try to leverage the strengths that Majestic has as a business overall, everything we do online is built on the foundations of our retail business.
For instance, we try to keep the online experience as close as possible to that of our stores by having orders placed online processed and delivered by the staff at the customer’s local store so the customer has a personal relationship with them.
There are 147 majestic stores around the UK, so we manage to fulfill 97% of online orders through them.
Does this approach make keeping track of inventory difficult?
It is a challenge for us, and we have to manage on more of a macro rather than a micro level. It is a daily task to keep this up to date. I think that the upside outweighs the downside though.
Have you always offered free delivery? Is this a big sales driver for you?
Yes, thanks to the fact that we have a network of stores and delivery vans, and that we only sell by the case so orders are over a certain amount, we have always been able to do this. It’s an important part of our strategy, and we can generally deliver for free with two thirds of orders placed.
The fact that we offer free delivery is clearly marked on the homepage and around the site, and I think it makes a difference when customers are deciding to buy; delivery charges can be a barrier to entry for online shoppers.
Are there any problems associated with free delivery?
It could be an ongoing dilemma for retailers, as courier costs have to be paid, and that has to be passed onto the customer somewhere in the price.
Courier costs are rising and, for online wine sellers, the collapse of Amtrak which specialised in wine delivery leaves fewer options. We are insulated due to the fact that we own our own vans and have our own delivery network, but we are still vulnerable to other trends like fuel costs.
When did you last update the website?
It was relaunched in October 2007, designed by Snow Valley. We’ve now had a year of bedding the new site in and we are confident that it’s working well. Above all, sales functionality has to come first.
The biggest change was the implementation of search and merchandising technology from Mercado, which created a powerful search engine for our products, allowing customers to search for wine and filter results from a range of preferences; as well as being able to choose by region, grape etc. Customers can also search on whether it has a screw cap, or if it was reviewed in The Times, and so on.
We will look to increase the level of interactivity within the site though, with customer reviews and recommendations, and collaborative filtering technologies so we can offer wines based on customers’ preferences.
We already offer our own staff recommendations on the site, featured on the homepage. We have 800 well trained and knowledgeable staff in our stores, and we want to use them to help sell.
How effective are these recommendations for sales?
There is uplift in terms of sales, but we also look at it in terms of branding and the Majestic experience. It’s important that customers see that our staff know their wine and are well qualified.
What are the unique challenges of selling wine online?
Selling wine online can be similar to clothing; a sector which is now improving at selling online. It is a tactile experience, people like to see and feel clothes, and it can be difficult to make a decision based only on photos.
With wine, people enjoy not only tasting samples, as they would in store, but also holding bottles, reading the details on labels. It can be hard to replicate online.
You have a blog on the site - who manages it?
It is mostly updated by the Commercial Manager Jeremy Planer and myself, though we don’t have time to update it as often as we’d like to.
It’s a liberating thing, and allows us to talk about things that interest us personally, as well as talking about general issues in the wine industry.
Do you have any plans to use other forms of social media?
Our marketing strategy is not revolutionary but we do plan to be more expansive going forward in trying new things. Cases of wine are not going to appeal to everybody so we have to choose our marketing strategies wisely.
Mainly, we concentrate on PPC, email marketing – we personalise emails with the details of local stores - and affiliate networks.
Graham Charlton is a researcher at E-consultancy. Find him on Twitter here .