Chris O’Brien, General Manager of Liquor Barons, talks to drinks trade’s Hannah Sparks about the challenges facing independent liquor retailers in Australia.
Liquor Barons now represents 70 stores, a jump up from the original 20 when O’Brien started in his role eight years ago; an annual turnover of approximately $180m and seven per cent of WA’s total off-premise liquor retail sales.
What has been key to Liquor Barons’ success in recent years?
We’ve been clear in our strategy over the last two years, which has been to ruthlessly control our expenses, pursue profitability and continue to invest in our brand. We now find ourselves in a position where the business and the brand are incredibly well positioned to capitalise on any upswing in the economic environment.
What part does digital media play in your strategy?
I think we’re ahead of the game in the digital space in that we’ve spent a lot of time and resource gaining an understanding of what works. We have two full-time staff whose focus is digital advertising, and that includes social media.
Social media is a key part of our advertising mix. I think anyone that did a review of their advertising would find social media and digital marketing should play a part in their plans too. Social media, in particular, allows us to have a conversation with our customers in a way that no other platform can.
How do you compete with the power and range of the major chains?
An independent store cannot win if they try to beat Coles and Woolworths head to head. That means, to succeed, the independent retailers need to have a differentiated model.
Consider what a traditional liquor store would look like in a Westfield shopping mall today and ask yourself this question: is this format appropriate for this space; does a liquor store still need to carry 2000+ SKUs or should it take a more curated approach and carry 400-500 SKUs that have been carefully selected for that site and that ultimately deliver higher profitability?
We understand that one size doesn’t fit all, and I’m not just talking about the state, I’m talking about suburb to suburb. We know that what works in one suburb doesn’t necessarily work in another, and our model allows stores the flexibility to focus on what they need to be successful in their community.
How important is your group-wide scan system to your success?
This gives us real-time insights into what’s happening in the stores. We have real-time access to store level information and we use that to make decisions on ranging, pricing, and what we advertise.
This also allows us to make very commercial decisions with our supplier partners. We’re very happy to work with a wide range of suppliers and have a number of joint-business plans in place with suppliers across all categories, but what the group-wide scan data allows us to do is remove the emotion from those commercial decisions and make the right decisions for our stores.
Is your tasting panel your secret weapon?
Within Liquor Barons’ product mix has always been a strong focus on premium wines chosen by a 20-year-standing tasting panel of retailers, winemakers and wine media that meet every fortnight to review some 30-40 wines blind.
There’s no doubt that our wine product is exceptional and consequently our average sell-price on a bottle of wine is more than 40 per cent above the national average.
Our renowned wine panel allows wines to be evaluated with integrity by the store owners and managers, and for us to get the exceptional wines they select into our stores quickly. It’s one of our greatest strengths.
Latest issue of drinks trade out now!
It’s that time of year again – the special double-edition of drinks trade, with your usual issue at the front and all the 2017 Australian drinks Awards winners at the back. Aside from its exclusive interview with Chris O’Brien from Liquor Barons, there’s also a Christmas gifts and gadgets guide, a look at light summer red wines, Champagnes and sparkling wines, and the development of an independent brewers seal.