Archive - March, 2014

Will Vente Privee make a success of flash wine sales? Probably

French event sales site Vente Privée has added wine sales to its product offering in the UK, and they may be the ones to make this model really work.

This felt more like a fashion event than a wine tasting. There’s a reason for that.

Vente Privee SalesInstead of the acres of table-tops loaded with glass bottles, we are greeted by several hosts who would not look out of place at London Fashion Week – the professional, attentive, smiling PR team and the fashionably-dressed management.

At the end of the upstairs room of the appropriately French Compagnie des Vins Surnaturels, constantly drawn to his smartphone, but dipping into our conversations occasionally and coolly, is Xavier Court, the man we’ve come to listen to.

The occasion is the launch in the UK of Vente Privée’s wine offering. Vente Privée is a French e-commerce site that pioneered the online flash sale model, that has not only survived far longer than most internet brands, but expanded to cover 8 European markets and with a reputed turnover of €1.3 billion from 20 million registered customers.

Impressive numbers, but what do they mean for the world of wine retail in the UK?

Flash sales, or “Event Sales“, can take different forms, but they are about offering attractive products, at substantial discounts, for a very limited period of time.

The image one might conjure up is of cheap, overstocked products pushed by spray-tanned presenters on TV shopping channels, and some wine sales sites could be accused of following that path, and having failed. Vente Privée’s model, driven as it is by its base in the world of fashion, is different to this image.

The positioning of the site is not simply to offer discount sales, like Groupon for example, but to create a virtual brand ‘pop-up’ shop that communicates the brand message to all those who browse, even if they do not, or cannot, buy. With around 20 million active shoppers and prospective buyers in Europe, this is a powerful driver on its own, but it may also encourage many new customers to trial a product and potentially become converted to the brand. It isn’t so much about getting wine shoppers to buy against the ticking clock, so much as encouraging casual wine consumers to buy “on impulse”.

As a wine commentator I am not alone to be worried that, once again, it sends a message to consumers that wine should only be bought “on sale”. However, as a committed wine consumer, I should also say that I’d be willing to suspend those worries if a genuinely attractive offer came along.

Admit it, we’re all the same, we do love a deal. The question is, what is a “genuinely attractive offer”?

  • Real wines: Vente Privée usually negotiates directly with the winery brands and so gets their buy-in and targets high-end wineries. After all, they are offering a one-off promotion, where they create the content, including video recommendations from respected wine professionals, give the brand the right to approve it, and then display this advertising message to thousands of targeted consumers.
  • Real discounts: The price has to be a genuine offer because pricing sites such as wine-searcher.com make it easy to see if the “retail price” being used is accurate, and if the offer is real – a site like Vente Privée cannot afford to get a reputation for inaccurate offers.

The list of winery brands is quite impressive already, with Chapoutier, Chateau Giscours and Albert Bichot already on the site, so these are not cheap imitations, and with a strong French market for wine sales, the prospect of maintaining this level of quality in the UK is high.

Vente Privée will face several obstacles, including:

  • long delivery lead-times (approximately 3 weeks from order, to receiving wines from the winery, repackaging, dispatching from their dedicated warehouse in Beaune, then finally the delivery to the UK)
  • additional costs (extra delivery charges, plus UK Duty costs)
  • a competitive wine market
ventee privee custom wine store

Custom branded wine store

Others have tried this, such as the launch of Lot18 almost exactly two years ago but closing only four months later. So will this model succeed in the UK when others have failed? I believe it can, and probably will.

The key difference is that Vente Privée is not a wine retail business, it is a branded sales business. It already has a massive audience, and a great deal of experience delivering branded products to consumers. It is ADDING wine to the list of options for shopping-savvy regular consumers, not trying to change the habits of confirmed wine buyers. The wine market will only be a small fraction of the business, but an attractive one if they achieve their target turnover of up to €2million in the first year. This would make them one of the largest online wine retailers in the UK, despite the small percentage of their total business.

So why do this at all? Xavier Court admitted that it is not all about the wine itself. Vente Privée launched in the UK around 2009 and grew its member numbers rapidly, but Xavier admits that the product offering did not match that growth, and it takes a big effort to get unimpressed customers to come back to shop.

Today, Vente Privée has 650,000 registered members in UK but only a small fraction return to the site regularly. The decision to add wine sales at this stage is not only to diversify the offer, but also because like the UK supermarkets, Vente Privée’s research shows that UK consumers love a wine bargain, and those who do shop for wine also spend above average on other products.

“Wine so efficient on Vente Privée because it is about impulsive buying, … a game, … pleasure.” says Xavier Court, and he does seem to know his audience.

Vente Privée needs wine to perform well in the UK in order to invigorate the sales across all its brands, and because it has the experience, the deep pockets and existing contacts, it has a very good chance of succeeding.

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Miracle of turning water into wine too good to be true?

When is an April Fool’s joke not an April Fool? When it takes place in March.

About two weeks ago, Philip James the wine entrepreneur behind Snooth & Lot18, and his CustomVine CEO partner Kevin Boyer, launched a fundraising drive for what they called the “Miracle Machine”. The machine was going to revolutionise home wine making by creating a table-top device that promised to make any style of wine you liked in only 3 days.

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The promise was astounding, and caught the attention not just of eager wine drinkers, but US and UK national media, with articles in the Daily Mail, ABC News, Time, Business Insider, Mashable and many more. According to reports, the campaign generated 500 million media impressions, thousands of twitter mentions and even a 7000 strong list of supporters willing to fund a kickstarter campaign.

However, this Miracle Machine turned out to be too good to be true. The idea was apparently created by the MSL Group for Wine to Water, a charity bringing clean water to communities around the world, which is MSL’s pro-bono client of the year.

James and Boyer’s creation was in fact a means to catch the attention of the world, and one that performed better than they might have expected. The “M | M” logo for the Miracle Machine was a clever inversion of the “W | W” logo of Wine to Water, just as the campaign is now attempting to invert the idea of the miraculous conversion.

In a short statement issued yesterday, James said, “The miracle of turning water to wine might remain out of reach, but Wine to Water has shown that the real miracle of providing clean water is easily within our grasp”.

Miracle-MachineWhilst the stunt certainly generated a lot of interest in the fake product, it remains to be seen whether the individuals and news organisations that were duped will see the amusing side of this “disruptive good will” activity, and therefore whether the activity will end up benefitting the charity. What’s certain is that CustomVine and its founders have enjoyed some time in the media spotlight.

For real wine miracles, visit your local wine merchant instead. There are thousands of people making magic happen all over the world.

March 22nd is World Water Day.

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Love(content) = money

This is a brilliant video by a most talented individual, talking about art, content and money.

Jack Conte and his impressive beard

Jack Conte and his impressive beard

I have been a fan of Jack Conte, and Nataly Dawn (individually and as Pomplamoose), for many years. However, my respect for him grew enormously when he also created a most amazing site called Patreon. In this video from XOXO Festival 2013 Jack tells us about his background as an artist, and how Patreon came about. He explains how YouTube monetisation worked for him, what killed it, and how he came to realise that there was another way.

“(creating great content) is just half my job….The other half is this … I have to take something I’ve made and put it in an equation, and out comes money. I can’t forget about that. … If we just want to make good stuff once, then you don’t have to worry about this. But if you want to keep doing it you have to make good stuff and convert it into money.” – Jack Conte (jump to 13:30)

In the past, YouTube services (their platform reach), plus quality content, COULD generate money for the artist. This is now rarely the case. It is an advertising model that relies on getting not just lots of viewers, but a large percentage of viewers on that platform. As the audience for the media channel grows, similar total viewing figures become less and less relevant (“views, as a currency, have been devalued“), and so individuals are displaced by big brands.

My favourite quote, at around 17:00, is when he is talking of why maybe 400,000 YouTube views converts to only about $25 revenue:

“It isn’t a “hit”, it is “a person”, … and the reason that it ends up not working is that advertisers don’t care how much you like the content you are about to watch, … (but) that really matters to a creator.”

Artists, and many niche content creators, ARE individuals and care about the individuals in their audience, so how can they benefit? Jack summarised his solution as:

Patreon(music) = money

… in other words, the Patreon platform is the “function” you apply to deliver quality music content, to result in revenue for the artist. It is true (I am a patron of Jack’s, Nataly’s and others including the brilliant “Postmodern Jukebox“). But I would also like to generalise it further and add one element that Jack maybe takes a bit for granted in his explanation, and say that the formula is:

Platform(content) + Love = money

Creating quality content is wonderful, but you must also work at gaining the love and respect of an audience and do this on an appropriate platform, in order to monetise your content.

What might this mean for wine? Well, we are creating content, but are we choosing the right platforms to deliver that content widely, and are we working hard enough to target a unique, specific audience for that content that truly care about our content? If we don’t, then how can we expect to generate “money” at the end of the day?

Building an audience, getting their respect and “love” is our personal task, but one thing that we can work on together is the issue of platforms. Patreon and YouTube are about bringing content creators together so they can be found. We must do more of this in the wine business so that we can make great content more easily found, and supported. This has begun, with platforms such as PalatePress, but these also need to develop means to encourage true fans to be able to transfer value, whether that is pay-per-view, subscriptions, donations, or the chance to buy merchandise.

It is also true for wineries. These too need new platforms for creating audiences for their wines. A growing option is direct sales but this relies on building a loyal audience as well as creating great wines. In the next few weeks we shall look at some wineries doing this, and how they are going about it.

In the interim, please enjoy some of Pomplamoose’s great work:

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