Technology: Online at last

The pub industry has been slow to tap into the benefits of buying online, but it is happening - as Barbox can testify. Phil Mellows reports.

After four years of euphoric start-ups, undignified collapses and plain hard slog, e-commerce for pubs is finally beginning to take off. The dotcom bubble may have burst, taking many online purchasing websites with it, but one site has battled through, survived and is now beginning to prosper.

Barbox, jointly owned by Coors Brewers and Scottish Courage but run as a stand-alone business headed by managing director Duncan Malyon, now has 11,500 subscribers, the vast majority independent publicans. Between them they place more than 3,000 orders online each week, worth in excess of £4m.

They are still joining at the rate of up to 150 a week, a figure that could accelerate with the recruitment of a 17-strong Barbox sales force to take the message out into the trade.

It was always inevitable that pubs should follow other industries in taking advantage of the undoubted benefits of buying over the internet. Making it happen, however, has meant seeing beyond the glamour of the quick win.

"It has taken a lot of investment to get Barbox to where it is today, but now we are pretty well self-sufficient," says sales and marketing director Ian Hudson.

The sales force alone has cost nearly £1m but it's a necessary investment in a trade that traditionally likes to meet the people it's dealing with face-to-face.

More than just selling, they will also play a training role, educating licensees in making the most of e-commerce and helping to overcome any nervousness about buying online. Once a pub has registered they will be able to go back and make sure they are using the service to their best advantage.

Even without the sales force to reassure them publicans have been getting used to the idea of using the internet. In common with the rest of the population, they increasing go online to book flights, do their banking and so on.

"We haven't seen anything dramatic but we have had a steady growth of new subscribers as using the internet has become the norm," says Ian.

Growth has also come from existing subscribers making more use of the site. Multi-supplier purchases, in which licensees will buy a mix of food, drink or non-food in a single visit, have increased from less than five per cent in November 2003 to 15 per cent today, another significant measure of how many licensees are feeling more comfortable with online purchasing.

There are the positive advantages, too. Chiefly it's a matter of convenience. Busy publicans no longer have to phone telesales with their orders at a particular time. If they like, they can go online and do it after closing time.

Purchasing online has also become much quicker thanks to technological advances. Eighteen months ago a typical order took seven minutes, now it's under two minutes.

Next to convenience users tend to go for the exclusive promotions on online purchases. A remarkable 62 per cent of people take them up.

Then it's the business-building applications on the site.

The most popular is Quizmaster, which allows pubs to download quizzes, and the health and safety and risk assessment tools are also well used.

Barbox has recently revamped its event manager to make it more interactive and there is a new property section where users can search for pubs for sale.

In the pipeline is an insurance package, staff scheduling software and a broadband deal.

So far, Barbox has focused on independent licensees - and it has been successful where others have failed. Getting the managed house chains on board will be another big win but, as Ian points out, that will have to be a different kind of deal.

The magnificent seven​

Barbox is a route to market for seven core suppliers - brewers Coors, ScotCo and Interbrew, wholesaler Waverley TBS, catering companies Brakes and Woodwards, and non-food wholesaler King UK.

By this week ScotCo will be the last of these to have fully integrated its back-office systems with Barbox meaning licensees can purchase directly from them through the site at bespoke prices.

More than 70 other suppliers have product lists and links to the site, but licensees have to make their purchases from them in a more traditional manner, by phone, fax or email. Barbox also hosts business-building applications which, again, have been increasingly taken up by users.

Go to www.barbox.com