Darren Blackhurst outlines Coles’ Liquor Strategy

20 August, 2020 by Deborah Jackson

Pictured: The new look Liquorland at Oakleigh

Under the leadership of Darren Blackhurst, who started in January 2020 as the Chief Executive Liquor, Coles has undertaken a review of operations to “reset the Liquor strategy”.

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Speaking at yesterday’s results announcement, Blackhurst outlined the six strategic pillars that Coles Liquor would be undertaking to become a “simpler and more accessible, locally relevant drinks specialist”.

As a part of the review, Coles looked at four key lenses: customers, the market, suppliers and the business.

“We spent 852 hours talking and listening to more than 1,000 customers to understand their thoughts on our offer, how they like to shop and how we compare to our competitors,” said Blackhurst.

“Overall, they want an easier shopping experience with less clutter – particularly in Liquorland. They expect friendly team members to be available and on hand to help them. They want the offer to be relevant for them and simple to understand, with more local craft and boutique products being mentioned. And they told us that it’s still essential to continue to offer good value for them, everyday.

“From a market perspective, it’s important to recognise that our size, scale and banner portfolio means that we’re large enough to make a difference nationally, yet agile enough to be relevant in the local market.”

Blackhurst also highlights that online is a key opportunity for Coles and recognises the omni-channel customer as becoming much more important.

“The key challenge for us is that a lot of our systems and processes are quite manual and we have a large and fixed cost base that now requires a level of investment to lay the foundations for future growth, particularly online, where we have considerable opportunity to grow,” he said.

From a supplier perspective, it’s all about simplifying operations and providing a clear strategic direction and building long term plans.

Blackhurst also spoke to the development of Coles’ three liquor banners, with the trial of Liquorland’s new store concept set to be rolled out more widely as a key priority.

“Our three distinct and complementary store formats means we’re well placed nationally and locally to service our customers. First Choice continues its successful transformation; Vintage Cellars is evolving with strong results in the Ashburton trial and Liquorland has considerable potential to capitalise on its convenient locations around the country.”

Taking all of this into account, a new strategic framework has been developed with the vision of becoming a “simpler and more accessible, locally relevant drink specialist”.

This is driven by a focus on six key priorities that sit under the wider Group’s three strategic pillars of Smarter Selling, Inspire Customers and Winning Together.

“Our first priority is to simplify our operating model and this is really all about good shopkeeping to ensure our offer, our communication, our pricing and the way our stores operate doesn’t become too confused or cluttered. It’s essentially making our smaller stores easier to shop and our offer more engaging for customers.

“Our second priority is to refocus everyone’s efforts across the whole business on some retail fundamentals. Being clear on where we can add value for customers by reducing and removing needless costs and wasted efforts in the process.

“Thirdly we need to differentiate our product offer to enable us to serve our customers better. The development of our exclusive brands and our relationships with our suppliers across all channels and formats are key to this, as is team member engagement with customers.

“Our fourth priority, that of being more relevant and accessible, relates directly with our plan to evolve and optimise our shops, our estate and our online business – the latter is a big opportunity. And with regards to our estate, as we complete the First Choice Liquor Market renewal program, we will be turning our attention to Liquorland.”

Following considerable customer research, the Liquorland store concept has been given a refresh and Blackhurst says: “It’s actually a relatively light touch change but with a big overall impact.”

The concept pilot store is at Oakleigh Central Shopping Centre and so far it’s been “resonating with customers and team members alike”.

The store format focuses on simplified signage and seamless navigation to demonstrate specialist credentials (whisky, rum) and help customers find what they are looking for under ‘Wine region’, ‘Beer district’ and ‘Spirits trail’.

The Vintage Cellars concept has also undergone an evolution with the Lygon Street store in Melbourne opening recently with a new format.

Vintage Cellars Business Category Manager, Ed Scully, told National Liquor News: “The store is an evolution of the existing Vintage Cellars format, offering customers an enhanced shopping experience, with a better range and a bright and contemporary feel.

“Vintage Cellars Lygon Street has been thoughtfully designed with simplified signage and improved navigation to assist customers in choosing the right product for them, allowing them to ‘meet the makers’ behind their favourite wine, beer or spirit.

“The existing building was once a bank, so using this concept the team has converted the old bank vault to a space where we range our favourite premium products.

“We’ve increased boutique and premium ranging in this store, with a particular focus on international products, spirits, as well as local Pinot Noir and Chardonnay.”

The new Liquorland and Vintage Cellars concepts are the first new store concepts since First Choice Liquor Market was launched in 2016, since which time more than half of the First Choice Liquor portfolio have now been converted to First Choice Liquor Market.

“It’s clear that there is considerable latent potential in all of our liquor brands,” says Blackhurst.

“The market and our customers are evolving and this is an opportunity for our business. And our desire to be a simpler and more accessible, locally relevant drinks specialist, and the delivery of our six priorities, will lead to sustained growth over the long term.”

 

Vintage Cellars

A look inside the new Vintage Cellars Lygon Street