Marketing
Issue No. 20 - December/January 2005
Retail-less Selling
by Dr David Corkindale
The problem with retailers
Many small wineries have been finding it difficult to gain shelf space in liquor stores and bottle shops.
There are many suppliers now and many of the retail outlets are part of either Woolworths or Coles empires. They more or less control access to a majority of Australian customers now and so wield enormous bargaining power and can dictate who gets access and the terms.
The situation in liquor will get worse for small suppliers. In food retailing the two majors control access to almost 80% of customers. They do not like regional brands and so, for instance, you will find it hard to spot a South Australian ice cream brand - it may be there, but has very little freezer space.
Many markets are going this way. Consider hardware, where one retailer controls over 40% of the market now.
Small, specialist suppliers can not afford to advertise or pay the shelf space fees that the big retailers require.
What can small wineries and food manufacturers do in the face of this major obstacle? What can small producers of innovative products do to get to customers if the major retail outlets are effectively barred to them?
What was old is new again
Some methods of finding and selling to customers that have been around for years are finding favour again with those to whom retail access is denied.
For instance, the small wineries that have cellar door sales have the means to collect the contact details of those who visit them. It is then possible to use direct marketing to contact these people and sell them more wine.
The principles and techniques are very well-established and can be very effective. Some small wineries sell all their vintage this way.
However, not all wine makers know how to do it and do it well. That is no longer a problem as a service is being started that will, in effect, enable all small wineries to outsource this operation to a common operator.
