Brand Health Check: Oddbins
The long-struggling wine retailer has become the latest to enter administration.
Remember Threshers? What about Unwins? Will we soon be asking, remember Oddbins?
The off-licence chain, founded in 1963, went into administration last week after it failed to convince creditors to accept lower repayments as part of a rescue deal.
As the single biggest creditor, HMRC, which was owed £8.6m in duty, VAT and PAYE, made the final decision.
For some, the sight of the high-street retailer may already be testing the memory cogs, as the number of Oddbins stores has dwindled from 230 nine years ago to just 89 today, with 39 having shut in the past few months.
The administrators claim several parties are interested in buying the business. The question is, who would buy Oddbins, when the business model for such chains has been undermined by the supermarkets' continual reduction of prices? Although it has tried to make its wine range its USP, specialists such as Majestic, Laithwaites and online players offer highly targeted products for all tastes and budgets.
The management only recently had the brainwave of trialling smaller-format stores, branded Oddies, stocking 450 lines compared with the normal 1000. But is this too little, too late?
We asked Martyn Stokes, head of communications strategy at MPG Media Contacts, who previously worked on the Threshers ad account and now handles Magners, and Ian McLernon, a former Unwins, Threshers and Coors marketer, and now commercial director at Parfums Christian Dior UK and Ireland.
Diagnosis: Two experts on how Oddbins can get the drinks flowing once more
Martyn Stokes head of communications strategy, MPG Media Contacts
I used to love Oddbins - it was bold, unstuffy and colourful. I loved the hand-written tasting notes on the shelf and the helpful and passionate staff. Today, our high-street off-licences are all but gone. So what went wrong in such a short period of time?
Fundamentally, the way in which we buy wine has changed. We now see a price-led market at one extreme and a discerning market at the other, which exists in warehouses and online.
Although most wine drunk in the UK costs £4.47 a bottle on average and is bought from a supermarket as part of our weekly shop, there is a flourishing premium market - and this is where you find the customers on which Oddbins used to rely.
Brands such as Majestic, The Wine Society, Laithwaites and more recently Naked Wines are doing very nicely because they have made wine-buying easy and fun. They offer an enticing range, knowledge and passion, brilliant service, cashback and social communities where customers advise each other - all the things that the high street used to offer. Plus they deliver next day, with no hassles.
- Make Oddbins feel like a local, bespoke, friendly expert, not a faceless generic outlet from a national chain. Rebuild the personality that made Oddbins a success.
- Turn it into a social brand. The discerning wine drinker will always want to learn more about wine. Make it a destination, offer tastings and educate the local community.
- Accept that Oddbins will never be a volume player, and stock a range that is accessible but not everyday - wines with a story for special occasions.
Ian McLernon commercial director, Parfums Christian Dior UK/Ireland
The demise of the specialist off-licence sector has been ongoing since the millennium, when the multiple grocers aggressively started to discount alcohol and roll out their convenience-store formats.
More than 80% of the specialist sector - among them Threshers, Unwins and now Oddbins - have entered administration. However, there is a glimmer of hope.
Majestic Wine and online operators such as Laithwaites have shown that a clearly differentiated offer can succeed and compete against the multiple grocers.
Others, such as Oddbins, have worked hard to survive, but the pace of change in the business, as well as the lack of a clear consumer promise, is ultimately what has led to its administration.
Unlike Threshers and Unwins, however, Oddbins may yet rise from the grave.
- Be a true specialist. Create a differentiated wine and spirit range, with passionate staff who know more about the product than anyone else.
- Recreate the quirky and eccentric personality for which Oddbins used to be famous. However, this needs to be modern and relevant, rather than quirky/shabby for the sake of it.
- Reduce the risk of experimentation with wine. Consumers want to try different and unbranded wines, and the role of a specialist is to cut the risk of buying something you won't enjoy. This should be done through everyday tastings and recommendations based on past purchases.
- Stay away from price, as price alone is a battle the specialist will never win. Wine is an indulgent product that deserves to be purchased for enjoyment, not just its price.
This article was first published on marketingmagazine.co.uk
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