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LWF: Digital efficiencies helping with the big three – content flow, stock flow, cash flow

Published:  20 May, 2021

A mental shift around harnessing digital capabilities and automation this year has moved businesses towards stock management systems that free up time and capital to focus on sharing information and storytelling with customers.

The comments were made at the London Wine Fair’s (LWF) ‘How to succeed in a digital first post-Covid world’ session, where panellists agreed that cloud computing is increasingly taking away the labour and margin of error involved in processing manual orders while also accelerating a shift to low inventory models.

This time last year, “the industry was in holding pattern”, said Jonathan Harclerode, co-founder of Bottlebooks.

However, over the past 12 months, digital efficiencies have now gone mainstream.

“With all the start-ups that were founded over lockdown, people have found fantastic ways to engage with consumers, whether that be digital or carrying on into an in-person environment,” said Elliot Awin, partner at ABS Wine Agencies.

“Often, they’re using big yellow storage or their back garden and therefore this idea of having to hold stock seems like such a waste when specialising in engagement and being able to sell to your customers and not having to worry about cash flow – stock flow should really be the priority.”

As has been the case for many this past year, stock and cash flow became a friction point for ABS in 2020. When the on-trade closed, the company was stuck with “hundreds of weeks worth of stock rather than 20 weeks we like to hold for our customers”.

As a result, ABS is now working on creating a system which allows greater stock visibility where customers can see stock in real time. This will allow the company to take on more of a marketing role so there is an “obvious route to market”.

Quoting a piece in the Financial Times, Nick Martin, CEO, Wine Owners, added that cloud computing has and will continue to be a key way to free up these pressure points.

“‘Covid has enshrined cloud computing as the critical enabler of enterprise, innovation and partnership. This says it all, because cloud computing has made it an awful lot easier for tech to reconfigure around evolving business models like lower working capital intensity … moving to a more blended approach.

“A lot has shifted away from the ‘under one roof’ view of the 1990s in the 2000s to a much more application-specific, connected and collaborative world. The power of the network is going to become absolutely defining for this industry.”

This led the conversation onto the importance of content and information flow from producer to trade customers and eventually the consumer.

Harclerode said part of the mental shift of 2020 has been combining tech and customer service to help customers further along the supplier chain.

“If you’re a producer, are you a producer that just throws the information up on a website and tells your customers that you need to download it yourself, or are you a producer that goes the extra mile [to] tell the stories that will help your customers sell your product downstream, because ultimately those customers are going to come back for more. Technology plays an important role under the guise of customer service, also at a cost you can afford. Technology helps you do more with less.”

Martin added: “Content is so fundamental in driving buyer engagement and driving online revenues. Whether it’s producer level content coming via Bottlebooks, content for managing purchases shipments coming through from Liv-ex, or content coming through from reviewer websites, curating that content is so incredibly important and yet, we see 50% to 75% of the working day where some people are tied up in [administrative burdens]. We’re a big believer in industry specific software so that [administrative] overheads can go away.”

Also discussed was the evolution of the wine trade in relation to other industries. The wine trade has not typically been an early adopter of technology – partly a result of pragmatism, panellists said, as it involves risk and cost.

“We’re not as evolved as other fintech-focused industries,” Awin said.

However, the wine industry is evolving in terms of scalability and the standardisation of information as businesses ramp up ecommerce, online tastings and digital sharing of information.

James Miles, chairman at Liv-ex, said: “We’ve seen lot more interest in automating or integrating with Liv-ex. One place we’ve grown is in Italy, where customers are reliant on tourism and this year they have desperately been looking for new avenues and routes to market. Liv-ex just so happened to be a platform they could plug in to and a find big international marketplace. It’s required a significant shift for many in terms of behaviour and channel.

“We’re moving into a world where we’re just so much more connected. The great opportunity now is that you can share that information with everybody, within reason, and it becomes so much easier to consume and to use. It’s not just about cost saving. Clearly, we will all become a lot more efficient,” he concluded.