Ales by Mail is disrupting craft beer sector

Goal

Region

Billericay

Industry

Beverage

The Challenge

Trading facility with Amazon wasn't sustainable

The Solution

Kriya Lending - Invoice Finance

How Kriya helped Ales by Mail disrupt the craft beer sector

Paul Kruzycki, the founder of Ales by Mail, has been a Kriya customer since 2015. His company sources and sells an impressive range of craft beers and delivers them straight to your door.

They work with over 300 breweries and have the enviable job of taste-testing the range to ensure the beer meets the quality their customers expect.

The craft beer sector has seen a surge in popularity, and there are around 200 breweries opening up each year in the UK alone. This reflects the increase in demand from consumers who want to experiment away from mass-market lagers.

With demand at such levels, it’s no surprise that a number of new start-ups are vying for a piece of the pie. We caught up with Paul to see how Ales by Mail has been tackling this rise in competition.

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I understand that you’ve had quite a challenging year, can you tell us more about that?

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“There’s been an explosion in the craft beer sector. Companies that hadn’t been interested previously are now starting to enter the market, including a number of start-ups, backed by big marketing budgets to spend on growth.

That means that we’ve needed to improve our efficiency to keep up with the change and keep our business moving forward. Because we were in a good cash position, we were able to respond very quickly.

We did have to make some tough decisions though – such as pausing work with suppliers at the smaller end of volume for a short period. The whole team needed to get stuck in with all sorts of jobs, especially over the Christmas period when we were really busy.

We’ve got a good plan to execute on now and we’ll be focusing on remaining profitable and being innovative to counter the new entrants.”

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What were the biggest challenges you faced through this period?
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“One of the biggest challenges for us is being able to maintain relationships with so many different suppliers and making sure that we’re keeping them fresh.

It’s so easy for them to be distracted by a proposition from a start-up and if we don’t keep our relationships warm, we risk missing some great opportunities.

We managed this challenge by making sure we did lots of face-to-face visits and involved our whole team – we want our suppliers to know that they’re important to our business.

On the marketing side of things, we really had to take a look at how our proposition came across. Many of the start-ups were prepared to burn through cash to acquire customers, so we needed to respond to that.

For example, they’ll throw together 6 to 10 beers and offer them at a knock-down price, which attracts people in. The beers are at the lowest price point and often mediocre, which is not good for the industry.

Our customers can choose what they get with our pick and mix option – they’re not going to end up getting a case of beer that’s put together based on how cheaply it’s been bought. We needed to make sure that customers understood that in the way that we marketed our service.”

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How have you dealt with the challenge of disruption in your industry?
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“I just started to ask myself, ‘If I were in their shoes, how would I put my company out of business?’

Also, not losing confidence is a huge thing. We have a good business and a good product – we shouldn’t lose sight of that. If people are trying to copy that, it shows that the industry is strong and that there is room to grow.

We went back to our core values – why we started the business and why we’re good at what we do. We came out of that with a list of initiatives to improve what we offer and we’re excited about bringing these to market.

We’ve just rolled out a change to our shipping so that any order in mainland UK gets free shipping. No one is doing that currently – free shipping often requires spend above a certain amount.

We’re also looking to give people more flexibility – they’ll be able to click and collect, use a locker service or get it delivered to their home – whatever works best for them.

Another string to our bow is that we can provide a fulfilment service for breweries that have an online store, adding further value to suppliers. One of our biggest success stories is where we took over a particular brewery’s online store and increased revenue by four times.

We took it from a badly managed service that no one trusted would deliver as promised and turned that into a world-class service. We’re able to offer this service because we’ve built up expertise in this area over the last 8 years.

The other area where we stand out from the competition is in our service. It’s really important to us to provide a great service to our customers and suppliers and we will go above and beyond to make that happen.

I remember on Christmas morning, a delivery had unfortunately gone wrong for a customer so I personally drove to their house to make sure that they got their beers in time.”

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In addition to the challenge from start-ups trying to disrupt your industry, has Brexit had an impact on your business?
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“Brexit is a double-edged sword for us. On one hand, we import beers from European countries – so we’ve seen our costs go up.

On the other hand, as the Pound has dropped against the Euro, we’ve seen an increase in European customers shopping with us because it has become cheaper for them.

We don’t do a lot of marketing to our European base – they tend to find us through social media and via recommendations – but I hope that this becomes a bigger part of our business going forward.”

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You’ve been a MarketInvoice customer for just over two years now. What were your reasons for using us?

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“The primary need was for our trading relationship with Amazon – the credit terms simply weren’t sustainable for our business and we wouldn’t have been able to take on that opportunity without you.

Secondly, you offered us flexibility and confidence – I knew the option was there to finance our invoices and that meant that we could start working on projects that would keep the business fresh and moving forward.

And lastly, I get excellent contact and support from Kriya – you’re nice guys, and since day one, I’ve had great service from you.”

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So what’s next on the horizon for Ales by Mail?
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“We’re looking for the next generation of our website to have a lot more bells and whistles.

For example, we’re looking at how to get a good review process for customers to give their feedback on beers and enable other customers to get enough information to make informed decisions on what they might like to try.

We want them to be comfortable in the knowledge that they’ll get quality beer and can come back to us if there is ever any issue.

We’re always keeping our ear to the ground to make sure we find the next big thing in craft beer, so watch this space!”

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“We expect our B2B revenues to double as a result of providing Kriya’s flexible payment terms to our trade and business buyers.”
Stuart Zissman, Head of Financial Services

Halfords is the UK’s leading provider of motoring and cycling services and products. Its customers shop across over 1,750 fixed and mobile locations including, Halfords stores and garages, as well as its website, halfords.com.

Today, around a quarter of Halfords turnover is business-to-business. They sell to organisations of all sizes including SME businesses, garages, and workshops, offering discounts on automotive parts and tools with their Trade Card, as well as directly to larger commercial and government customers that buy in bulk.

However, like many well-established enterprises, Halfords found its future growth was challenged by the legacy processes of its past. Find out how they’ve teamed up with Kriya to remove the friction from their B2B commerce.

Halford's challenges

“The exam question” says Halfords’ Head of Financial Services, Stuart Zissman, “was how do we make selling to business and trade buyers less labour-intensive?” Having already overseen a successful consumer finance proposition at Halfords, it was clear to Zissman that their B2B offering had potential to grow by introducing a simple and effective credit solution.

1. B2B buyers expect payments terms

“All successful B2B propositions have some sort of financial support” Zissman explains. Whether large or small, Halfords’ business buyers want to be invoiced on payment terms. This is especially beneficial for garages and workshops, which thrive on efficient working capital cycles, allowing them to source parts upfront and defer payment until they have received compensation for their services.

Halfords recognised the opportunity to enhance their offerings by providing scalable trade credit, which was previously untapped. As Zissman says, "offering payments completes the circle."

2. Manual, unscalable processes were holding back growth

Halfords' hands-on approach to B2B processes presented an opportunity for greater scalability and growth. Wholesale orders, managed via account managers, involved manual quotes and purchase orders, which added complexity.

“We’d like to say yes to every single customer that wants to order from us,” says Head of Trade Card, Chris Millan. However, processing these detailed orders for existing buyers took time, limiting the retailer's ability to proactively attract new business and expand their account base.

What Halfords sought was a way to make their B2B offering more accessible and achieve a better economy of scale.

“We work with sole traders, business customers and government entities. Kriya is the only supplier that could support all three.”
Chris Millan, Head of Trade Card

The search for a solution

Recognising the need for change, Halfords set out to find a way to modernise its B2B offering. With Kriya's 12-year track record and willingness to collaborate on a solution for their unique requirements struck a chord with Halfords.
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A solution for all B2B buyers

Halfords has a diverse buyer base and needed B2B payment terms that could be offered to limited companies, government entities and sole traders.

Multichannel

With trade customers already purchasing online and in-store, Halfords needed a solution to offer payment terms holistically across their sales channels.

Risk expertise

With their focus on Motoring and Cycling, Halfords sought a partner with strong expertise in finance and payments, including robust credit and fraud detection capabilities, to help onboard their buyers.

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“We are experts in motoring and cycling, and to ensure exceptional service for our customers, we decided to partner with Kriya, specialists in B2B payments and lending decisions.” Stuart Zissman, Head of Financial Services

The B2B vision

Halfords partnered with Kriya to transform their B2B offering. By integrating Kriya PayLater with their Trade Card, the retailer is combining trade discounts for B2B buyers with the ability to pay on account for online and in-store orders.

Adopting an eCommerce-first model has a number of advantages. Firstly, providing online buyers with highly-demanded payment terms expands the businesses they can sell to. Secondly, much of their offline business can be shifted to a self-serve, online checkout. Not only does this provide a smoother buyer experience, it also frees up the Halfords team to focus on the customers where their expertise has the most impact.

The near-infinite scalability of the Kriya solution means Halfords can not only improve their overall B2B customer proposition and experience, but they can also see financial benefits through the partnership too.

“Offering trade credit through payments makes it much slicker. It’s something buyers are familiar with from the consumer world.”Chris Millan, Head of Trade Card

Wholesale change

Halfords have kicked off their payments transformation with their wholesale offering.

Business buyers come to the Halfords wholesale team to place bulk orders and request custom details, such as branded bikes and accessories. Before Kriya, this fully offline sales channel required multiple teams and processes to transact each order. This process led to delays and hampered conversion, such as inventory becoming unavailable during the order, or customers purchasing elsewhere.

By streamlining the entire wholesale workflow into Kriya Merchant Portal, Halfords now have a single, automated flow for processing orders.

Wholesale buyers are first onboarded into Merchant Portal. This screens for credit and fraud risk, directly providing their sales team an instant spending limit decision for the buyer. Orders can then be placed on payment terms and invoices are automatically generated for the buyer. Additionally, Kriya assists with credit control by managing payment collections too.

“We needed a way forward that was less hands-on because the whole process was very, very manual.” Chris Millan, Head of Trade Card

How it works

1

The buyer places a wholesale order with Halfords

2

Halfords onboard the buyer into Kriya’s Merchant Portal

3

Payment terms selected and purchase complete. The buyer pays at the end of the following month.

Partnering for growth

Reflecting on the journey so far with Kriya, Zissman says “It’s that personal touch and relationship that makes the difference to the product we’re building together.” For Zissman, it's not simply outsourcing the expertise to a third party. “It’s more like we’re onboarding Kriya into Halfords and by extension they’ve become part of our team”.

There’s a busy roadmap ahead for Halfords and Kriya, with plans to bring the whole multichannel offering to market by the autumn of 2024.

We're very excited about this development,” says Millan. “Introducing payment terms to our Trade offering eliminates barriers that previously slowed us down and unlocks opportunities with a vast number of businesses we haven't historically engaged with.”

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.

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