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Yesterday I was contacted by a brand consultant who is doing some work for a wine merchant. He wanted to pick my brains. The conversation got me thinking about brand management, and specifically the management of a wine retail brand.

Two of the strongest wine retailer ‘brands’ in the UK are Majestic and Berry Bros & Rudd. It is interesting to compare these rather different merchants.

Majestic is a category buster, with its distinctive out-of-town warehouse outlets, helpful staff, and informal shopping experience. It has done for wine retailing what IKEA did for furniture shopping: a stripped-down retail experience that customers actually find quite empowering.

Berry Bros & Rudd relates to the world through its wonderful shop at No 3 St James St. This is a wine merchant with a history. Yet they’ve managed to combine this image of a traditional fine wine merchant with a dynamic approach to online retailing. While BBR do sell some good, more affordable wines, their image and reputation is built around being a high-end, fine wine merchant with excellent customer service.

The challenge for both brands achieving growth outside their existing customer base.

For Majestic, the goal seems to have been to move more upmarket. While the core of the business is selling more accessible, affordable wines, it seems a shame to see the subset of your customers who buy fine wine go elsewhere when they’re picking up something more expensive, or buying en primeur. So Majestic began to sell fine wines, and then bought independent wine merchant Lay & Wheeler in 2009 in order to offer customers a full fine wine service, including bonded storage.

Moving upmarket like this doesn’t threaten the Majestic brand, because it is not immediately visible to the majority of customers. The distinctiveness of the Majestic brand is retained.

For Berry Bros & Rudd, the challenge is quite different. For them, two routes for serious growth exist. One is by brand extension downwards: selling more affordable wines to a wider customer base, building on their established reputation as an expert wine retailer. The other is to move in the other direction, and become a serious player in the international fine wine scene, selling the very best wines to high net worth individuals (HNWIs), with a focus on the growing band of HNWIs in emerging markets.

This latter expansion is already occurring, and reinforces the distinctive BBR brand. But what about extending the BBR brand downwards? This is much more dangerous. It risks losing brand distinctiveness. It would be a mistake to trade valuable brand equity for growth.

While it makes sense for BBR to build on its expertise as a wine retailer by reaching out to a new group of customers, this is best achieved by creating a new sub-brand. Think Abercrombie and Hollister. Protect the BBR brand as it is, and launch a new, associated brand with a different feel, targeting a new group of customers. There should be family resemblance—a focus on quality wines (not selling by promotion, or flogging soft brands) and a commitment to excellent service—but also some distinctiveness. BBR already have the logistical support, a long list of excellent agency wines (FMV, their agency arm, have been growing nicely in recent years), the web expertise, and the potential for considerable business overlap. What is needed is a new image, greater accessibility and a more modern feel. To change BBR along these lines would result in a loss of brand equity, but this can be avoided by creating a new, related brand.

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