Just over a month since Catch Of The Day announced it has sold its stake in Vinomofo, we dropped in on the wine retailer’s new Richmond offices to discuss the change.
In a small, tight-knit community such as Australia’s online retail industry, news tends to travel fast.
Such was the case in mid-July, when CatchOfTheDay announced it had sold its stake in the online wine pureplay, Vinomofo. Of course, speculation abounded following the move, as rumours swirled regarding both Vinomofo’s profitability and CatchOfTheDay’s ongoing restructure.
In fact, the latter has become such a point of conjecture in some circles, that it’s even been suggested CatchOfTheDay isn’t profitable, subsequently stirring the brand’s Co-founder Gabby Leibovich to issue a direct challenge to those that might assert such a thing.
In a bid to put some of the rumour-mongering to rest, Power Retail recently visited the new Vinomofo HQ in Richmond. The open-plan office space is already abuzz with activity and an air of excitement after just a few weeks of the move, and if the broad grins on the faces of Co-founders André Eikmeier, Justin Dry and Leigh Morgan were anything to go by, things couldn’t be any more optimistic for Vinomofo.
The team that originally started what was essentially an information-based wine blog and since spun off an entire online retail offering still have the drive and passion they started with. With a new website design planned to launch any day now, they view their current scenario as simply the third phase of an ongoing metamorphosis and have big plans to not only expand their offering, but also to bring more of their business’s heritage to the fore.
So, I guess I should begin by asking what have been the biggest changes you’ve noticed since leaving Catch?
AE: “Since we left Catch, one of the biggest changes for us as been in accountability and the finances side of our business. In one sense, it’s kind of like starting over. Day one and we have a new bank account and new sales coming in, and every sale is exciting again. It’s real, visceral. That money isn’t going to just become part of a weekly reporting framework, there’s no safety net anymore.”
JD: “On the other hand, it’s almost like some pressure has gone off us as well. Even though the people at Catch were incredibly supportive and didn’t intrude in the day-to-day running of Vinomofo, they were always there in the back of our mind every time we did make a decision. Now we’re back and completely in control – I think that works better for us. There’s that new energy, that excitement of holding the reins again.”
There has been a lot of discussion regarding the reasons behind the split. Can you discuss those in any detail?
AE: “The split was really just an opportunity that came up, that worked out well for all parties. We initially partnered with Catch in order to support us as we scaled our business, meaning we could move a lot faster without as much of the risk inherent in aggressive scaling. After 18 months we realised we’d achieved what we wanted to achieve and when this opportunity came up to buy out Catch’s stake, we took it. We’re currently eyeing some serious expansions on our core offering – we’ve been thinking, what do we want to do? Now we’re in the right space to make that happen.
“There’s just such a thrill of independence again. We’re all grown up now.”
So there aren’t any issues with performance? The business is still growing?
AE: “We’re profitable and we’re on a good growth path, so some of those risks associated with growth and scale just don’t exist for us anymore. We know what the right amount of stock to buy and hold is. We know what our members want and we know what risks to avoid or which have a reasonable chance of paying off. So we don’t have any big challenges we’re facing at the moment – it’s more about carefully plotting our route over the next 12 months to ensure we become the best we can be.”
Is there a potential sale in the works, then?
LM: “It’s an exciting time in our category. We’re currently seeing a lot of competitors drop off or get bought out, but we don’t have a view to do either any time soon. We recognise Vinomofo has a long way to go and there’s a lot we need to achieve before we consider an exit. Instead, we’ll just keep our heads down and reassess the situation once we’ve hit the targets we’ve set for ourselves. Of course, that isn’t to say we don’t review every opportunity that comes our way.”
What is keeping your nose to the grindstone at the moment? Any developments underway?
AE: “It’s only been a couple of weeks since we moved into our new office here, and we had the entire team sit down and discuss the brand and what we stand for, and our ongoing strategy surrounding it. We reviewed what’s been working and what we feel can be done better, and we’re bringing the outcomes of that discussion into our new website.
“The new site is designed to pave the way for us to roll out more content, both written, image-based and video, which is harking back to our origins, really. It’s been designed mobile-first, which is the first time we’ve done that. We’ve always had a significant mobile audience, but we’ve never really optimised our offering for mobile devices, so we think this will be a real winner. It’s truly going to represent a fresh look for the brand.”
JD: “We’ve also been considering the expansion of both categories and markets. There’s a massive opportunity in China for us, we believe, as well as potential in New Zealand. However, we look at our existing Australian audience and see so many options for selling a wider range of products. We don’t want to sell anything and everything, it’s about carefully selecting new products or categories that would make sense for our brand and our customers.”
I guess it all comes down to your brand marketing strategy, after all. Can you shed some light into how you approach your marketing efforts?
AE: “One of the core things we learned at Catch was that marketing starts with the product. Get your product right, and look after your customers.”
JD: “We’re pushing for more quality content as part of a genuine, value-based SEO proposition. After that, it’s about putting more effort into engaging with our customers and the wider public. We want to be out there connecting with people. We also want to be reinvesting in our existing members. There’s no point running giveaways just to attract new subscribers. If we’re going to be giving anything away it’s going to be to our existing database as a way of showing that we value them.”
AE: “It’s our belief that you can’t really “acquire” a customer, you have to earn a customer, and you do that through product and service. It’s just so easy to unsubscribe from a database these days, there’s no point trying to trick them into opening emails or clicking through to the site. We want people to say ‘we missed your email yesterday’ as opposed to ‘you guys send too many emails’. And they’re more than happy to champion your brand when you get it right. So why not focus on making customers happy and incentivising them help you grow the brand?”