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Engaged customers boost Majestic Wine sales

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A move to engage customers both in the store and online has paid off for Majestic Wine . Today it reported internet sales were up by almost a fifth in its last financial year, while like-for-like store sales rose by more than 8%.

The growth followed new content on the website, including a new blog, ‘manager’s choice’ videos, staff articles and customer reviews alongside in-store events such as wine courses and a seasonal guide to wine. So far, more than 10,000 customers have taken part in a informal wine course held in store, while Majestic Tastings are to be launched later this year.

Chief executive Steve Lewis said: “The need to engage and interact with customers while they shop online is becoming ever more important. We have worked hard to increase significantly the content available on our website.”

The update came today as the retailer published its financial results for the year to March 29 2010. In all, online sales rose by 19.7% during the year. E-commerce sales now account for 10% of the wine warehouse’s total UK sales.

The online results came against a wider picture that saw total sales rise by 15.6% to £233.2m from £201.8m at the same time last year. The growth followed the acquisition of fine wine specialist Lay & Wheeler, which contributed sales of £12.4m.

Like-for-like sales in UK retail stores were up by 8.4%, while pre-tax profits rose by 117% to £16m.

Factors in the growth included the move to a new minimum purchase of six bottles, down form the previous 12. That, said the company, had encouraged repeat orders from existing customers as well as new customers. And despite the move, the average transaction value fell only 4% to £129, with the average bottle of still wine now selling for £6.56, up from £6.35 last year.

Lewis said: “We are very encouraged by our ability to attract new customers which will allow us to continue to grow our market share. While the UK economic outlook remains uncertain, we believe that Majestic is well positioned for future growth.”

Our view: The challenge for strong online sales is always to explain a product that customers can’t touch, feel, see for themselves, or even, in the case of wine, taste. But Majestic Wine has risen to the challenge with its information-packed website, which sports reviews from customers and well-informed staff alike. It’s long been known that reviews sell wine – bottles reviewed in newspaper columns have always done well. But now that’s been translated to the e-commerce website there’s much more room to cover more wines. The other advantage of e-commerce for wine, of course, is that stores tend to be out of town and that wine tends to be heavy to transport, so free delivery is also a draw.

This all certainly seems to have worked for Majestic.

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