Big Interview: Majestic MD on delighting customers through personalisation

A large sign welcomes visitors as they sit in the reception at Majestic Wines HQ in Watford – a pair of wine glasses clink with the words ‘cheers’ merrily inviting you into the building. Unfortunately the wine is under lock and key, jokes my host, as we pass the bright and airy tasting room, full to the brim with bottles from around the world. But if any retailer would be in need of a drink it would be Majestic.

The business has most certainly gone through transformational change over the last three years, focusing its future strategy on digital transformation, with a seemingly never-ending technology to-do list which it hopes to result in a meaty £500 million sales goal by 2019.

“Majestic has gone through a lot of change over the last few years and the way I keep summing it up is we’re not just a warehouse anymore,” Majestic’s MD of retail, Josh Lincoln, tells Essential Retail after a walkthrough of the retailer’s slick new digs.

Majestic kicked off its transformation by putting its money where its mouth is and buying digital wine expert Naked Wines back in 2015, enabling it to leverage the technology expertise inside Naked to digitally transform the rest of the retailer’s business, both online and in-store. While the business is not yet at the £500 million finish line, the bottom line suggests the investment is paying off, with 2017 interims reporting a jump in pre-tax profit to £3.1 million up from a loss of £4.4 million, while sales increased 5.7% to £213.3 million.

During these half-year results, Majestic said it was coming to the end of the “heavy lifting” part of the four-year plan, which included the launch of a new website, store refits, improved stock availability and an improved data proposition, with CEO, Rowan Gormley, saying it was “time to put our foot on the gas”.

At the end of the day, all of these back-end digital efforts are being made to ensure the business stays focused on its number one priority – the customer.

Customer experience may sound like an overused phrase in retail at the moment – arguably a buzzword – but for Majestic, improving the customer experience was vital in order to survive in an ever-increasing digital landscape.

It was not just about re-platforming its website, the retailer knew that in store it needed to change the experience to reaffirm its ambitions to be a wine specialist.

“We’re actually a specialist where you can come and find wines that you’re going to love,” insists the young and energetic MD.

Majestic's retail MD, Josh Lincoln
Majestic's retail MD, Josh Lincoln

From boxes to shelves

One big change for Majestic stores is store design – the retailer is stepping even further away from its warehouse roots by removing the wine boxes it is famous for having stacked high around its stores. By introducing shelving units, the stores immediately become more welcoming and friendly and by the end of the year, half of its 212 strong store estate will be fully shelved.

“Innovative, right? Every other retailer has shelves – but the point is we don’t,” jests Lincoln.

"If you can use technology to increase the ability of your people to deliver a better service, that’s where it can be really exciting.”

He explains that by simply introducing shelves, store employee workload is reduced so they can instead spend their time looking after customers. Majestic has invested a lot of energy thinking about its store managers and how to motivate teams to provide excellent customer service. Its Franchise-Lite scheme, launched last September, gives store managers more autonomy and rewards them for five-star customer service.

Since adopting the new mind-set, employee churn has reduced from 30% to 20%, but Lincoln is keen to point out that it is still early days. “It’s completely revolutionised the way we work with the stores and the way we communicate with them.”

In fact, Majestic recently announced it was putting a hold on new store openings in a bid to increase its marketing investment with the ambition of increasing the number of customers that come through the doors of its existing stores.

The big culture shift has been to become very customer focused,” explains Lincoln, who is clearly a people person keen to support Majestic staff in any way he can. “The strategy was to open lots of stores to grow, now it has been completely flipped, so actually let's grow customers and fill our stores rather than open more and more.”

Recommending the right wine

By leveraging customer data, the store teams can provide much better recommendations based on individual customer preferences and Majestic is also increasing its in-store wine tastings from quarterly to monthly to create a bigger buzz around the events and give customers a reason to visit a store.

This is another area Lincoln is really passionate about. He believes making the store even more inviting will really help Majestic retain customers and acquire new ones. He says they have already responded well to this experiential approach, with some shoppers spending 2-3 hours in store. He describes one email from a customer who treats his local store as his “toyshop”, while another couple had reportedly bought in a bottle of wine they had found on holiday that they wanted to open with their store manager.

“You don’t see that in retail – the relationship with the store teams is incredible,” he says completely sincerely.

Lincoln was promoted to MD five months ago after rising through the ranks at Naked Wines where he started out as wine advisor back in 2008. After the acquisition he was promoted to customer director at Majestic, which explains his relentless focus on the end consumer.

He says the next step for Majestic is to start shouting about how much it has changed. For example, part of Majestic’s warehouse approach used to be customers had to buy at least one case of wine, but 18 months ago it removed this caveat inviting customers to buy by the bottle.

A new website, a new start

The most dramatic change so far, however, has been to the retailer’s website, which is growing since a re-platform project which saw the retailer reduce its number of suppliers from 30 down to two. The retailer always refers to this part of the transformation project as the “heavy lifting” and Lincoln is quick to admit it was a very painful process over the last few years. Having worked previously at Naked Wines, Lincoln was in a unique position to be able to speak the same language as the technology team which now consists mostly of Naked digital experts based in Norwich.

“I know them all because I worked at Naked, so I’m able to say to them: ‘you know that thing we built two years ago at Naked, I want a version of it here, but I want it to do this, this and this,” he says.

Replatforming stats

  • Web sales increased from 12% of total sales to 20%
  • Online sessions are up 35%
  • Customer wine ratings up 100%
  • eCommerce suppliers reduced from 30 to two
  • Wine Concierge subscription members now total 18,000

He describes how the blend of the two different types of businesses has enabled Majestic to transform so quickly by using data to make strong decisions.

“But the heavy lifting isn’t the fun bit, it’s what you can do after you’ve done the heavy lifting.”

Lincoln’s favourite feature to come out of the new website is the ability to launch a wine club. While Naked Wines has its own angel investment subscription-style scheme, Majestic was keen to launch its own product as it understands it has a different customer set.

The Wine Concierge subscription service launched at the end of last year, and sees customers paying £99.99 for a 12 bottle case every three months. The bottles are chosen by Majestic buyers and customers can have the box delivered to home or visit their local store for a “pick-up party” – which Lincoln is quick to jump in and reassure us that it is not as seedy as it sounds! Customers can taste all the wines in store and swap out anything they don’t like, before a member of the team carries the box to their car.

“It’s a service no other wine retailer can or does do,” Lincoln explains excitedly. “And we’ve been able to do it differently because of our stores.”

He describes how the retailer simply didn’t have the technology to offer this service in the past, but customers were “crying out” for a subscription and in a mere six months the service already has 18,000 members.

“While the heavy lifting of the re-platform wasn’t very fun, the reward is we’re able to do things like this now and start to be innovative and really act like a specialist – and this puts us back in the game of convenience.”

While there is still a good year left of fundamental technology transformation, Lincoln and his team can at least use the website capabilities to launch and improve features like concierge to improve the retailer’s proposition. Over the next year, Lincoln describes how he will continue to update concierge giving customers the ability to swap out their wines online, rather than just in store, and to use data to tailor the cases based on customer ratings.

“We want to build it so it’s intelligent enough to see that customers have said they don’t like a particular wine and it spits that bottle out for you and switches it for something that matches your taste profile.”

Technology for technology’s sake

Lincoln explains he isn’t a fan of building technology without demonstrating a customer need first. Take concierge, the business knew customers wanted the service, but still spent a lot of time manually testing the proposition by building cases in stores first – “the customer didn’t know it was clunky, but for us it was terrible” – to make sure it was what they wanted, and to ensure it was beneficial for the business as well.

“We strongly believe there’s no point investing hours, months and money into building some technology we don’t know our customer wants,” he explains. “Technology should aid your shopping experience, it shouldn’t get in the way of it.”

“We strongly believe there’s no point investing hours, months and money into building some technology we don’t know our customer wants,” he explains. “Technology should aid your shopping experience, it shouldn’t get in the way of it and we’re at risk in some retailers of it getting in the way.”

His worry is that other retailers are getting bogged down by the technology and not thinking enough about what the customer wants. But he says Majestic is still prepared to experiment a little bit: “We’re going to play around with stuff, with some slightly different navigation and slightly different ways to shop” he says, with QR codes being one mooted technology for its new shelves.

“If we find one that really works, we’ll build the technology behind it to make it really sing, but we’re not going to build that technology until we know our customers really want it,” he explains, adding frankly that he is quite happy to sit back and watch other retailers “get it wrong” first.

When asked what exciting technology he could imagine implementing in the future with an unlimited budget, he laughs suggesting an intelligent wine rack with scanning and re-ordering capabilities, linked to a customer’s app – before quickly checking we wouldn’t hold him to creating the technology any time soon.

“Of course there’s some cool stuff you can do,” he says. “But the aim is how can we make the shopping experience as personalised as possible? We want to make customers feel that they can go into a store and Majestic knows what they’re going to like so when a customer walks in they have complete confidence in trying new things.”

Upgrading archaic till points

One new technology investment Majestic is making this year, is upgrading its “archaic” till points, with plans to have them implemented across the store estate before peak trading 2018. Lincoln is the first to admit this technology investment is not particularly sexy in itself, “but again, what we can do with it once it’s done is sexy".

“The first thing is they won’t be breaking any more!” he admits, candidly. “But we want to get everything on one data warehouse and have a single view of our customers and new ePos puts us on the same platform.”

Sexy till technology aside, Lincoln says he’s on the fence about all the future technologies like AR, VR, voice and AI which are coming over the hill.

“There’s a phrase that ‘retail isn’t dead, but boring retail is’ – and lots of people think technology is the solution to this phrase,” he says. “But some of the retailers I buy from don’t have any technology, they have an amazing service and experiences that are really engaging and exciting that make me want to shop there, but there’s no technology involved apart from a till.”

While new till points have finally made their way to the top of Majestic’s priorities, there is still a long way to go, with a mobile app and many other projects constantly being added to the checklist.

But iteratively improving the customer journey, with improvements to products like concierge, is the main focus for Lincoln as Majestic’s transformation plan continues to accelerate.

“If you can use technology to increase the ability of your people to deliver a better service, that’s where it can be really exciting.”

And if his customer-first approach works, perhaps Majestic will be dusting off a bottle of its finest vintage to celebrate a £500 million sales landmark next year.