As Liquor Marketing Group (LMG) looks to the future, CEO Gavin Saunders reflects on the group’s achievements, strategies, and the innovations driving its success.
In this exclusive interview for National Liquor News Leaders, he discusses the key developments of the past year, the growth of its member-first approach, and the exciting opportunities on the horizon for 2025. Read on to discover how LMG is navigating the challenges of the retail sector while continuing to deliver value for its members.
NLN: Can you reflect on some of the key achievements for the group over the past 12 months?
GS: LMG launched our loyalty program within the Sip’n Save (South Australia) and Harry Brown brands, with Bottlemart rollout scheduled for March 2025. LMG’s loyalty program ‘More Rewards’ is fully integrated with the one digital platform, meaning this platform becomes the one stop for our shoppers to browse exclusive offers, and access member benefits, digital catalogues, full store range, pricing and much more inspiration.
The development of the More Rewards loyalty program provides much richer first party data and, importantly for LMG members, a highly efficient marketing platform to grow their sales and profitability.
NLN: One of the standout themes for LMG has been the ‘member-first’ approach. How has LMG ensured that its growth and strategies remain aligned with the best interests of its members over the past year?
GS: The past year has been significantly more challenging in liquor retailing. But when the market is tough, it is even more important that retailers are supported by a group with the platforms, tools, brands, reach and focus to find growth and support them.
As a membership owned group without any outside equity, LMG invests all its revenue for member benefit. Our focus is on growing long-term sustainable and profitable retailers. This approach is demonstrated in our ongoing investment in price support to enhance members’ margins, the development of initiatives like loyalty and electronic shelf labels (ESL) and targeted efforts to win more shoppers for our venues. By building stronger, more preferred brands we drive sales and profitability.
NLN: How has LMG’s performance been over the past 12 months? And what factors do you think have been the biggest contributors to this sustained success?
GS: LMG’s like for like scan performance over the past year has delivered growth versus a market in value decline. It’s encouraging that LMG has outperformed the market by +1.8 per cent, but our focus remains on long-term success for our members and consistently delivering strong performance. We work closely with our members to support their goals of building their family assets and driving sustained business improvement.
Key drivers of performance include a relentless focus on meeting shopper needs with great offers, ranging of the products they want, and delivering excellent service and access through exceptional store standards and a robust online presence.
NLN: LMG is expanding at an impressive rate. Can you tell us how many new members you’ve gained over the past year and what it is about the LMG model that is attracting so many new retailers, and how do you maintain quality as you grow?
GS: The LMG network continues to grow in quality and numbers. The best advocates for LMG are our members, particularly those that have operated elsewhere then experienced LMG’s benefits of improved margin and increased customer count and consumer reach through brand awareness along with the support of the LMG team.
As a not-for-profit organisation we are entirely focused on growing our members’ sales to drive their profitability. There is the demand to grow the business to meet profit targets or deliver returns to shareholders. Our focus remains on delivering the best possible support to help members advance their retail performance and grow the network and brand health – an effort which relies on great retailers and consistently high retail standards.
NLN: The mantra ‘better than yesterday’ has been emphasised as a core value at LMG. Can you provide an example of how LMG has applied this philosophy in the past year, whether in operations, member support, or overall growth?
GS: ‘Better than yesterday’ is an LMG value which reflects our goal of continued growth and performance enhancement over short-term spikes or artificial or unsustainable activity.
LMG works with each one of our partners to look for opportunities as opposed to rewards. For example, a close out report is undertaken with suppliers after each major promotion to identify what worked. But what is often more important is identifying what didn’t work, and this becomes an opportunity to modify and improve efficiencies for future activity. Suppliers have limited budgets so if we can collectively identify inefficiencies, more funding can be applied to value-add activities.
Similarly, the LMG team undertakes business reviews with members to identify their performance and how these compare against industry benchmarks. Reports are generated through LMG data and insights from scan data collection are used to support members. Early in 2025, these reviews and a full suite of BI reporting will be made available to LMG members to review through their member portal. This provides them with a constant, real-time view of performance to support them to be ‘better than yesterday’ in their own businesses.
NLN: Looking forward to 2025, what are the primary strategic objectives for LMG?
GS: Loyalty provides LMG an additional tool to drive performance, offers and insights in 2025. The LMG team have done an extraordinary job in developing a platform and integrations which are shopper focused, easy to use and engaging. While loyalty adds another valuable dimension to our capabilities, it complements rather than replaces the proven platforms that have driven our performance and success over the past years. We will continue to engage shoppers through channels like digital marketing and catalogues to drive engagement and awareness, with loyalty enhancing these efforts.
NLN: With the highly competitive nature of the retail sector, how do you see LMG staying ahead of the curve and continuing to grow in such a challenging environment?
GS: LMG will succeed by having the ability to remain focused on the things that matter – how we drive sales and enhance margins for our members through winning more shoppers by meeting the shoppers’ needs.
There will be challenges in the market and we have seen retailers divert more funds into maintaining their profitability for shareholders and increase rebates and spend in areas which will ultimately detract from sales and margin performance. While these strategies might provide short-term wins, our focus remains on wining over the long term for our members.
NLN: How has the ‘There’s more in store’ campaign helped to drive both growth and member engagement since its launch? And how do you see that continuing in the coming year?
GS: The ‘There’s more in store’ brand platform highlights that there is currently more for our shoppers through the service, range and offers they receive in-store and also plays on the consumer promise that Bottlemart and Sip’n Save continue to evolve and that there is more to come.
This promise is definitely being met in the coming year with the addition of the ‘More Rewards’ loyalty scheme building off the brand position and delivering more offers, inspiration and benefits to our shoppers. We know that stronger brands build a stronger business. It’s been a relatively challenging retail environment of late, so it’s always a delicate balancing act choosing where to invest to drive today’s sales. However, we remain committed to building our brands in the long term for the benefit of our members because, quite simply, we also need to build the shoppers for tomorrow.
NLN: What role will innovation play in LMG’s strategy for 2025?
GS: LMG continues to innovate and at times we feel like we are a technology company as much as we are a marketing and category organisation.
The main reason we continue to innovate is that the online, digital and social world is where a lot of our shoppers are interacting with our brands and the market. LMG recognises the importance of continually enhancing our communication and ability to make relevant offers to our shoppers to grow sales.
Other areas for innovation have been our support for LMG members including better integrations and retail support through platforms like ESL, along with providing greater access and insights to support them to make more informed decisions. The insights platforms and BI we provide to LMG members, deliver a view of their own performance and identifies opportunities through benchmarking to market which will result in better decisions and actions.
NLN: The liquor retail sector can be highly competitive and dynamic. With so many new players in the market, how does LMG plan to differentiate itself and maintain its unique value proposition to both its members and customers?
GS: LMG enjoys a strong membership and customer base. We have been recognised in the past year as the leading catalogue across all Australian retailers for driving store choice and as the leader in liquor retailing for social and digital marketing. The challenge for LMG is to continually improve these platforms, a challenge our loyalty platform will help us meet over the coming year with fantastic opportunities and offerings.
NLN: As you look ahead, where do you see the biggest opportunities for LMG and its members in the next five years? How do you envision the future of independent liquor retail in Australia?
GS: Independent liquor retail has won market share since Covid and managed to maintain this share as consumer spend has come under more pressure. The challenge for the next five years for independent liquor retailing is to continue to evolve as the market shifts through force of consumer spend, digital evolution and the ultimate convenience of e-commerce, which means your local retailer is no longer the most convenient option. The retail impacts of range proliferation as shoppers continue to trial more and suppliers continue to innovate will also be significant.
The opportunity for independent liquor retailers is to evolve with the support of banner groups and the member collective whose long-term objectives align with your business. Retailers who focus on their shoppers needs, including offers, ranging, price and experience, and continue to evolve their offer to shoppers will ultimately win.