September 24, 2023

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How online growth is driving the closure of Beer Cartel’s bottle shop

How online growth is driving the closure of Beer Cartel’s bottle shop

Last week, Australian alcohol retailer Beer Cartel announced that it would be shutting down its bricks-and-mortar store at its Artarmon warehouse on the north shore of Sydney, and will transition to an entirely online model as of January 2023.  The decision came after the business secured a new warehouse in nearby St Leonards, approximately five times the size of its current location, which will allow it to bring all of its operations under one roof.  Currently, Beer Cartel and Brewque

rewquet, an offshoot business focused on gifting, operate out of different locations. The new warehouse allows both businesses to come under one roof, and according to co-founder Richard Kelsey, it didn’t make sense to bring the shop along with them. 

“Our online business has really taken off, and it’s now significantly more than our store sales,” Kelsey told Inside Retail. 

“We realised having our operations split across two warehouses wasn’t sustainable, and for the benefit of both businesses we really needed to pull it all back together.

“The lease at our current site was coming to an end, and we were facing capacity headaches, so it was time to find a new warehouse.”

The move, which was dictated by Beer Cartel’s growing operations, has inadvertently brought the business back to its initial value proposition: a large range of beer sold online and delivered to your doorstep. 

Back to the beginning

When Beer Cartel initially launched in 2009, the online market was a shadow of what it is today, Kelsey explained. 

“The concept of buying alcohol online back in those days was pretty foreign to most people, and they still felt a bit uncomfortable doing something that was so out of the norm,” Kelsey said. 

“Back then people had so many uncertainties around buying online, whereas now that everyone’s doing it on a regular basis, and it’s become really simple, a lot of that is gone.”

The pandemic naturally provided a boost to online shopping, and many people who placed their first online order during lockdown have continued to do so despite stores reopening.

In saying that, while Kelsey is confident the return to pureplay operations is the right move in the short-to-medium term, he also recognises that something will be lost when it no longer has a physical retail store. 

“One of the great things about the offline retail world is that it’s much easier to get people to actually engage with you when you’re face to face,” Kelsey explained.

“You’re able to much more easily personalise a transaction, and can create a relationship with the customer. That’s harder online, and it’s going to be a work-in-progress.”

More stores may come

Eventually, Kelsey would like to open more physical retail stores, which will be informed by the lessons learned through the last few years. 

For example, Beer Cartel’s Artarmon frontage was not readily visible from the street, limiting the number of walk-ins.

“It ended up being a bit of a secret, hide-away bottle shop that you find out about by word of mouth,” Kelsey said. “I think if we go down the road of having stores in the future, we’re going to make sure they’re going to be more visible.”

For the foreseeable future, however, Beer Cartel will focus on ramping up its online operations and delivering its hampers ahead of next year’s holidays. 

“We’re going pureplay, but it’s not a ‘never come back to bricks-and-mortar’ situation — it’s just something we’d consider once we’ve bedded down everything for the next stage of our online journey,” Kelsey said.