Speaking at a recent investor day for Metcash, ALM CEO Chris Baddock has outlined a transformation of its digital business as one of four key initiatives.
The other three initiatives include driving brand awareness and appeal, owned and exclusive brands and supply chain flexibility and efficiency.
Baddock told investors that digital is not just about e-commerce, but that it is also about getting the platform right for retailers and ALM.
“We have chosen 16 partners for our point of sale integration,” Baddock said. “The liquor industry can be quite fragmented, where you have standalone bottleshops, you have bottleshops that are attached to supermarkets and of course you have bottleshops attached to pubs, and a lot of the time those point of sale systems are specialised.
“That’s why we have chosen 16 partners. When we looked into the network, there were certainly a lot more than 16, and we are quite proud of working with each of these suppliers to bring to life those 16 that will connect into our systems.”
He added: “It’s no good having great systems if you don’t have great data, so we have to clean our data and make sure there is a conduit between the retailer and ourselves, so that we can use that data to give the most effective and efficient promotional programs.”
ALM has already started working with Complexica to use artificial intelligence to develop promotional plans and also to help predict marketplace performance.
While the digital transformation is not just about e-commerce, Baddock said that COVID has told the business that it needed to make improvements in this area.
“We did that,” he said, “we stood up our Marketplace in two weeks called ‘Shop My Local’. In two weeks you can’t produce the bells and whistles that we would have liked, but we have 324 stores who are working quite effectively in e-commerce today.”
He added: “We have two pieces of data that are critical to our retailers. The first one is if you are connected with point of sale and the consumer has your extended aisle, your basket-size is $50 more. And when you are in e-commerce, your basket-size is triple that of what your bricks and mortar basket is. So there is certainly some revenue to be made for the retailer.”
Baddock also said that one thing ALM has heard from its retailers and consumers is that if you are launching another brand, it is difficult to build trust in it.
He told investors: “We are looking into that and into single-branded websites for Cellarbrations, Porters, Bottl-o and working with Scott [Marshall CEO of Metcash Food] on the IGA platform. The great thing about Metcash is that I can work with Scott on the platform that he has chosen and adapt that to liquor.”
Baddock went on to say: “Once we have PoS integration we have 950 stores out of the 1500, providing us with scan data, and once we get that we will move to a loyalty program. We believe the loyalty program comes after that.
“We will also make sure that we cater for the consumer in relation to the last mile and with 1500 stores, we believe we are well placed for click-and-collect and delivery. But we will also provide the retailer with a solution in that last mile.”
Baddock said that ALM is in a position of strength in a mature market, but one that does still provide opportunities and that the business has a strong retail network and will continue to drive ‘Best Store in Town’ through investment in store refreshes.