Endeavour Drinks Group Managing Director Offers Advice to Retailers

Martin Smith, Managing Director at Endeavour Drinks Group, spoke at the drinks association’s Network Breakfast on Wednesday. Smith, who started working for Woolworths at the age of 18, talked about some of the improvements Endeavour Drinks Group has been making to its banners and offered advice to other retailers.

Endeavour Drinks Group represents 1,487 stores nationally and internationally, making it the third largest liquor retailer in the world. Many know the group for its Dan Murphy’s business - Australia’s most recognised liquor retailer, which continues to lead with its “lowest liquor price guarantee” proposition.

“The thing that stands out for me within the Dan Murphy’s business, is the importance of trust with the customer,” Smith said. “I’ve always been a great believer that when you’re in the retail business, you’re in a relationship with your customer, and like any relationship, it’s built on trust, and if you betray that trust, the customer will leave you.”

Smith explained that one of the ways to build trust is through advice. Unlike with supermarkets, Smith said that customers shopping in a liquor store will always seek help and recommendations.

“No matter how much a customer knows about wine, beer or spirits, they will always look for advice, because there are so many products out there,” Smith said. “Generally, if you give a customer good advice, they’ll buy your product, so as a retailer, it’s our job to make sure that we match the customer with the right products through the advice that we give them. That’s critical.”

According to smith, the value proposition retailers offer today is also crucial to not only driving business, but also a category.

“A few years ago in the Dan Murphy’s business, we were established as a good wine business, but we weren’t established as a good spirits business, so we decided to expand and explore that side and introduce a much larger range. We also wanted to take advantage of the gifting and collecting part of whisky, because we wanted to take advantage of occasions like Father’s Day. On that day, liquor stores are no longer only competing with each other, but also with Bunnings, Kmart, Myers and David Jones, with products like socks, books and aftershave….or a great bottle of whisky!”

Smith said that up until making the decision to expand the spirits selection at Dan Murphy’s , the most expensive bottle of whisky that the business had ever sold had been $150 - a price point that many of its customers thought was quite high. But when Dan Murphy’s expanded and introduced a $2,000 bottle of whisky, its customers’ perception of value changed, and the $150 bottle was from then on considered good value.

“If you want to drive your business and a category, you can’t drive it by introducing cheaper products; you have to introduce more premium products in order to give customers an idea of what value is,” Smith said.

Smith said that today’s consumers now also value time. While many are looking for the right price, Smith said that consumers are also looking for a retailer that will make their experience easier.

“The value exchange that the customer is looking for, more than anything else in today’s world, is freedom. I don’t mean freedom from a political sense, but freedom in the sense of giving time back to the customer, and retailers have got to be attuned to that,” Smith explained.

Over the last five years, Endeavour Drinks Group has been working on an improved delivery service, which Smith believes will better the value proposition of its liquor retail banners. The rise of businesses like Jimmy Brings, which offers alcohol delivery within 30 minutes, has put pressure on retailers like Dan Murphy’s to reduce their own delivery time. The new delivery service will offer next day delivery and guaranteed delivery at the time agreed with the customer.

“This should be another reason why a customer chooses one of the banners within Endeavour Drinks Group, because not only do we offer the right price and the right value, but we are now also making our customers’ lives a lot easier.”

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