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Charlotte Rogers: BrewDog is a lesson in how to scale up without losing your ‘craft’

BrewDog is officially a big deal. Over the past two days the self-styled Scottish punk brewer has raised more than £1m as part of its latest investment round, which sees it poised to become the biggest equity crowdfunded business of all time.

More than 1,000 new investors came on board in just 48 hours, helping take BrewDog towards its short-term target of £10m and further stretch goal of £50m. Describing this latest funding round as the beginning of a “new era of business”, BrewDog will use the money to fund the construction of new breweries in Australia and Asia, as well as increasing the capacity of its brewery in Ellon, Aberdeenshire.

The investment will also fund the opening of 15 new craft beer bars in the UK and the development of its first sour beer facility – The Overworks – which is scheduled to launch later this year.

To date the wider BrewDog empire spans 47 bars worldwide, a second brewery in Columbus, Ohio and its Lone Wolf Distillery for gin and vodka, all supported by £41m of crowdfunding generated since 2009.

Such is the brewer’s success that in April BrewDog sold a 22% stake in the company to private equity firm TSG Consumer Partners, valuing the business at £1bn.

How then can a company valued at £1bn, which has been the UK’s fastest growing food and drinks company for the past five years and whose flagship Punk IPA is the number one selling beer in UK supermarkets, still call itself an independent craft brewer?

READ MORE: BrewDog wants to ‘reclaim craft’ with LoneWolf spirits launch

How to stay “craft”

The tug of war over the term “craft” rages on. In September Ab InBev-owned Camden Town Brewery said it wanted to transcend its “craft beer tag” as it went live with its first above the line …read more

John Lewis introduces concierge service as it reinvents the department store

John Lewis today unveiled its latest take on the 21st century customer experience at a new store that puts services at the heart of retail.

Services and experiences, from eye tests and nail bars to car fitting advice and technology training, will take up a fifth of the floorspace at the new store, set to open in Oxford next Tuesday. Service staff working at a central “experience desk” led by a “brand experience manager” will take a concierge-style role as they help customers plan their day, bookthem into a workshop, match them with a style or home design adviser, or find them a table in the rooftop restaurant.

Staff from Oxford Playhouse were drafted in to train all the 322 staff at the new store in voice and body language skills. Their new approach to customer service will include hotel-style tours of the store, while staff uniforms will be based on pieces in John Lewis’ own-brand Kin clothing range.

Paula Nickolds, managing director at John Lewis [IRDX RJLW], an Elite retailer in IRUK Top500 research, said: ‘As part of our plans to differentiate the John Lewis brand and to reinvent the department store for the 21st century, our shops continue to be a place where customers come and experience our brand – the physical manifestation of what we stand for.

‘More than a route to selling things, our Oxford shop is a place that aims to inspire and delight our customers and is entirely focused on customer experience with Partners and finishing details at the heart of that.’

Julie Blake, head of branch at John Lewis Oxford, and a partner at the business of 33 years standing, said; ‘I was thrilled to be asked to run John Lewis’s 49th shop and help shape the future of this and other shops.

‘My team …read more

Why has Volvo pulled out after winning Channel 4’s £1m diversity competition?

volvo

Volvo has decided to pull out of Channel 4’s Diversity in Marketing Award and pass up on £1m in free airtime, claiming Grey’s entry for the competition had not been “approved”.

The car marque was crowned the winner in July for its pitch around non-visible disability. The idea had been submitted by its creative agency Grey London.

However, Volvo now says the agency “submitted an entry to the Channel 4 competition that had not previously been shared with us, nor approved for production”. It claims to have only realised this recently, despite winning four months ago and with the ad due to be aired imminently.

Marketing Week approached a Volvo spokesman for clarification, who said: “To cut a long story short, it’s a Grey issue and not a Volvo issue.”

When questioned why the brand would not want £1m of free airtime for a campaign promoting diversity, Volvo said it did, but that it depended on the campaign being “eligible” – which in this case it wasn’t as it hadn’t been reviewed or signed off.

And when pressed further on how the decision to pull out will look, given the content of the campaign, he added: “It’s quite a fair point – it’s disappointing but at the end of the day that’s the situation.”

In its statement, the car brand claims diversity will remain a “key pillar”. It highlights the work done through its ‘Human Made’ campaign, which celebrates human innovation.

The move leaves Channel 4 facing a quandary. A Channel 4 spokesman says it is “disappointed” that Grey London and Volvo decided not to take their campaign forward.

Marketing Week understands the broadcaster is keen to honour the £1m award, and is likely to look to other shortlisted campaigns for a winner. The broadcaster is speaking to the competition’s judges about what to do next.

The move …read more

Bodyform, TUI, Bud Light: 5 things that mattered this week and why

TUI’s major campaign to promote Thomson rebrand

This week marked the end of the Thomson brand as it finally converted over to TUI – the name of its German owners – in the UK after a two-year changeover.

According to TUI’s UK marketing director Jeremy Ellis, the rebrand will give the travel business a broader appeal and allow it to be more digitally focused with 60% of its sales now coming from online.

He also spoke about the rise of Airbnb and his faith that people were starting to tire of do-it-yourself holidays. Ellis believes package holidays, which are TUI’s bread and butter, are enjoying an uplift in demand.

“People are starting to realise doing it yourself [like Airbnb] isn’t all it is cracked up to be. When you go down that route there’s too much choice and too many complications. If things go wrong there’s a lot more risks attached than if you were to book traditionally,” he explained.

While these comments are probably what you’d expect to hear from a package holiday operator, they are intriguing because they hint at a wider trend of people tiring of the complexities of ordering through Airbnb and the issues when things go wrong. Recent flight cancellations from Ryanair have revealed how little protection consumers have if one aspect of their holiday goes wrong. But TUI will need to work hard to make sure it’s the brand of choice for those looking for more reassurance.

READ MORE: TUI talks Thomson rebrand and a backlash against the Airbnb model

Bodyform runs first ad to show ‘realistic’ period blood

Sanitary brands have been widely criticised for using clear blue liquid to demonstrate the durability of their products. Now Bodyform is trying to normalise periods with its #bloodnormal campaign.

It portrays a …read more

The future of retail, as imagined by SAP Hybris

Virtual reality, shopping from an autonomous car, face recognition, machine learning and conversational commerce all featured as SAP Hybris showcased its vision of the future of retail at its customer conference in Barcelona this week.

The commerce platform provider demonstrated technologies with potential retail applications, from the more far off use of virtual reality to manage data, and how shopping from an autonomous car might work – through to face recognition, chatbot Charly and Internet of Things applications that are available now.

Machine-learning powered Chatbot Charly, for example, will respond to shoppers questions on orders, inventory and delivery, while SAP Leonardo powers facial recognition technology within the SAP Hybris Marketing CLoud that analyses faces in order to match their age and gender to in-stock retail products, showing them personalised product recommendations on nearby in-store displays. Pepper the in-store robotic sales assistant recognises products from a QR code and then takes shoppers to the product they’re looking for.

Technologies developed by Hybris’ labs division also included demonstrations via the Galaxy system (pictured) of how data can be presented and understood through virtual reality systems. The demonstration was based on show visitors’ interests, as detected through RFID tags embedded in delegates’ name badges, but has potential applications to retail, such as managing customer data.

In his keynote presentation, Hybris co-founder Carsten Thoma told the audience that retail was changing as products and experience become one. “The product is the experience and the experience is the product,” he said, as he looked ahead to a next-generation of shoppers who won’t want to own things but to share them through the sharing economy. “People are sharing and that has a dramatic effect on your products,” he said. Subscription, he said, would also change the way customers buy. Hybris, he said, is working to turn products into services.

In her …read more

The evolution of delivery, from click and collect to artificial intelligence and drones

The changing expectations around delivery came into focus through two new pieces of research out this week.

The third annual JDA/Centiro Customer Pulse Report Europe 2017, carried out by YouGov, calculated the upsell opportunities that click and collect services give to retailers. It found that almost a quarter (24%) of European adults online in countries surveyed who used the service bought another item while picking up their order. More than two fifths (42%) of respondents who had shopped online in the past 12 months had used click and collect.

The survey of 8,238 adults online across the UK, Germany, France and Sweden found that use of the service was particularly high in the UK, where 54% of respondents used Click & Collect, a big contrast to Germany, where only 28% used it.

The figures suggest a wider trend for customers spending more time in store. The survey found more than half (56%) of respondents across the European countries surveyed use their mobile devices in stores, rising to 69% in Sweden. The main reasons cited among the four markets for using a mobile device in store are to check or compare prices (30%), read product/service reviews (22%) and to access and redeem offers (15%).

“Physical footfall is becoming important again, and Click & Collect represents an important vehicle for retailers to make the most of all the hard work they’re putting into the in-store experience. An effective Click & Collect operation isn’t just for Christmas, however: it can help boost sales throughout the year,” said Lee Gill, group vice president, global retail strategy at JDA.

“It’s hardly surprising that the majority of European adults are using mobile devices in-store, whether that’s for seeking out special offers and discounts, or simply for entertainment while queueing. To make the most of this, retailers must be making every effort …read more

The low-alcohol drinks company selling ‘a set of USPs and not a brand’

SkinnyBrands low calorie

Imagine the following scenario: you’re on a diet, or at least looking to choose a healthier option when it comes to your drinking repertoire. Would you buy a drink that is purely marketed on its brand benefits, like being lower in calories and gluten free? SkinnyBrands seems to think so.

For those unaware of SkinnyBrands, the brand offers low-calorie alcoholic drinks. At the moment, it is focused around beer and canned cocktails, but there are plans in the works for wine too.

While there are other brewers out there focusing on low or no-alcohol options, the company’s new marketing director Allan Moffat claims SkinnyBrands is unique as it “doesn’t compromise” on taste or alcohol volume.

For example, its SkinnyBrands lager advertised on its website contains 89 calories per 330ml bottle. In comparison, a similar-sized Carlsberg can contains 149 calories, while Bud Light has 118 calories in a standard 440ml can. The ABV of its lager is 4%, while Bud Light stands at 3.5%. Meanwhile, SkinnyBrands’ Cosmo, Mojito and Margarita cocktails are 5% ABV and contain 90 calories per can.

The website even includes information on how many WeightWatchers points are accrued per bottle of beer (three points – one whole point lower than Coors Light). The beer also claims to be vegan friendly and gluten free.

We know the challenges that the bigger, more established beer and lager brands will face. They’re not purpose built. By nature, [low-calorie versions] are a compromise of an existing product.

Allan Moffat, SkinnyBrands

“I know some other brands have got some of our functional benefits, but none of them have all of them. The vast majority are lower in alcohol to deliver lower calorie, and weaker in taste to deliver lower carbs. We feel like we’re leading the way in terms of that area of the market,” he says.

“We know …read more

GUEST COMMENT Why mobile conversion rates are terrible

It’s a fact that mobile conversion rates from mobile devices are roughly half what you typically see from desktop users. It’s also a fact that mobile is now the dominant device for online shopping – and the shift to mobile, away from desktop and tablet, continues apace.

It’s a fair guess, then, that – if you work in online retail – your mobile conversion rates will be terrible. And that fixing them is a priority.

The first step is to understand why, and that boils down to understanding how users behave when shopping via a mobile device. Over the last few months, we’ve carried out our biggest ever research programme – and the aim was to observe and analyse mobile user behaviour in detail.

Mobile conversion rates: the research

We tested over 40 sites from a wide range of brands and retailers across 6 countries with more than 50 real users in our UX labs. We completed extensive journey analyses, analytics benchmarking exercises and heuristic reviews.

We’ve never done anything on this scale before and the results were quite a surprise. Mobile users behaved in a totally unexpected way, and a way that was consistent regardless of context and type of retailer. Mobile users are shockingly single-minded about getting to product. Anything that gets in the way is a ‘conversion killer’.

That led us to a number of conclusions – for one thing we now think quite differently about designing mobile experiences. But it also enabled us to identify seven priority fixes for a great many existing responsive sites – issues we’ve called mobile conversion killers.

Mobile conversion rate killers: seven user frustrations

In the words of our test users:

1. “Make it easy to find my way around.” Shoppers don’t want to play ‘find the needle’, scouring …read more

Sainsbury’s extends one-hour delivery service

Sainsbury’s has extended its one-hour delivery service within London.

The Chop Chop service, initially piloted in its Pimlico and Wandsworth stores, has now been rolled out to five more London boroughs, with more than 70,000 more postcodes added from Barnet to Westminster and beyond. This, says Sainsbury’s, extends the service to more than 1.7m potential customers, giving it the biggest reach of any UK supermarket offering one-hour delivery.

Clodagh Moriarty, director of online at Sainsbury’s [IRDX RSBR] said: “We’re delighted the trial of our Chop Chop delivery service in Wandsworth and Pimlico has proven to be such a success. Our ambition is to help our customers live well for less and saving them time by offering one-hour delivery is one way we’re doing just that.

“We were the first UK supermarket to introduce one-hour delivery last year and this roll-out will give us the largest reach to shoppers across London.”

The Chop Chop service enables customers to order up to 25 items from Sainsbury’s, via an IOS or Android app, and have them delivered by bicycle or moped within one hour, for a flat fee of £4.99. Since its launch in September last year, the service has proved particularly popular with customers looking to purchase weekend brunch ingredients and baby emergency products as well as ‘dinner for tonight’ items and post party celebration remedies.

Shoppers who order via the app within store opening hours will, depending on slot availability, be able to receive their groceries within an hour on the same day. The service is available seven days a week via those stores that the service covers.

The Chop Chop service appears to be Sainsbury’s answer to the growing Amazon ?? has taken a different approach, launching same-day delivery from 300 stores across the UK.

The post Sainsbury’s extends one-hour delivery …read more

More than 40% of the UK’s toys and games set to be sold online by 2022

The UK’s toys and games market is set to move online fast in the next five years, new research suggests.

The sector will grow by 16.2% to reach a value of £4.9bn by 2022, according to a study from research and consulting firm GlobalData. Of that growth, 84.1% will come via ecommerce, with 43.4% of sales expected to be made online in 2022.

In its report, Global Data senior retail analyst Molly Johnson-Jones predicts that Amazon will overtake Argos to become the largest toy retailer in the UK in 2020. Already in 2017, 51.4% of toys and games shoppers visit Amazon.

“Amazon has managed to improve shopper loyalty with its Amazon Prime services, and impressive range of toys and games,” said Johnson-Jones. “Prices on this year’s must-have toys are lower than its competitors, its range is unrivalled, and the convenience of its offering is market-leading.”

She also predicts that electronic toys, and traditional toys will support strong market growth out to 2022. Electronic toys have 13.1% of the total toy market in 2022; and arts & crafts, construction toys, and board games will have 30.5% over the same period.​

“Electronic toy growth is not changing the market yet, as older parents and grandparents still choose traditional toys over toys which bridge the interface between physical and digital play,” said Johnson-Jones. “However, as millennials who grew up with digital entertainment start to have families, electronic toy sales will increase, and their simultaneous desire to do more ‘wholesome’ activities will mean that the strong growth of traditional toys will continue.”

But it’s pocket money toys have that have seen the greatest amount of innovation in 2017 with best-sellers such as LOL Surprise Dolls and Hatchimal CollEggtibles.

Johnson-Jones said: “The UK has always been a highly playground trend driven market, but this year has seen unusually high levels of …read more

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