“Building for the future”: Inside Endeavour Group’s plan for digital

usiness’ sales stayed flat compared to FY21, Endeavour Group has managed to diversify itself across the alcohol retail space, with a number of new brands and offers now online, signalling new potential moving forward.

“We’ve [been] building for the future by enhancing our digital customer engagement platforms, and introducing new retail formats, such as the Cellar by Dan Murphy’s, and Dan Murphy’s new neighbourhood stores,” said Endeavour Group chief executive Steve Donohue.

And while the business’ retail division is ending the year on strong footing, potentially more impressive is its digital uptake. Donohue noted that the group sees an opportunity to better personalise its marketing content for its growing loyal customer base: with the ‘My Dan’ loyalty program jumping 15 per cent to over 4.5 million customers through the year.

“Our online sales grew 17 per cent to exceed $1 billion for the first time and, importantly, online sales are [becoming] increasingly profitable, driven by scale, operating efficiencies and more premium baskets, which [is due to] more personalised offers,” Donohue said.

Moving forward, the business is investing in better personalisation and improved search capabilities to support its instore and online customers, as well as developing a new content management system to enable more frequent updates to its website and app.

Earlier this year Endeavour Group signalled a $35 million investment into its digital arm EndeavourX in an attempt to drive further online growth and more sophisticated technologies.

Helpful as well was the fact the Endeavour Group didn’t suffer the same supply chain issues as other retailers. Donohue said that the small impact the group felt came late in the second half of the year, but warned that it could continue into FY23. 

“I don’t think there’s anyone out there that’s not experiencing higher fuel costs, so we don’t think of ourselves as unique in that respect,” Donohue said.

“[Moving forward] we’re building in protections from the risk of not having stock in the first half of FY23, which is important for us. It’s a balancing act as ever, and things will get back to normal, but the first half of this year is going to be a bit lumpy to put it mildly.”

Inside Dan Murphy’s The Cellar store at Lane Cove

Sobering research

While the business’ retail arm is devoted to the creation and sale of alcohol, Endeavour Group also partnered with DrinkWise Australia during FY22 to support research into the consumption of low and non-alcoholic beverages.

DrinkWise’s research found that most Australians are drinking the same or less than prior to the pandemic, and, of those that are drinking less, one-third attribute this reduction to lower alcohol products.

“People are seeking more ways to moderate their drinking, and that’s corresponded with accelerated growth across the lower alcohol categories,” Donohue said. “It makes sense for us to help raise awareness of the many great no and low-alcohol alternatives and to help our customers make responsible choices.”

And, following the attempted launch of a Dan Murphy’s store in Darwin, and the subsequent lessons learned from that saga, the business has launched the Darwin Community Advisory Committee to help Endeavour Group better understand the needs of the Darwin community.

What’s in store for FY23?

The first seven weeks of FY23 have been relatively strong, with a return to a normal pattern of trade in retail and a continued recovery in Endeavour Group’s hotels division.

Compared to the beginning of Fy20, before Covid-19 hit, retail sales were up 12.7 per cent and hotels 13.4 per cent. 

However, with growing pressure on customers’ cost-of-living, as well as slowing wage growth and other inflationary pressures, Endeavour Group isn’t getting too far ahead of itself. 

“While the return of social connection and events are positive and this is reflected in our first seven weeks of trading, there are a variety of factors which may impact performance in the year including inflation, limited team availability, and the potential for supply chain disruption,” Donohue said.

“We’ll continue to respond flexibly, adapting and optimising both our retail and hotel offers as required.”

Source link

Comments are closed.