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The King is Dead! All Hail Caesar!

Majestic Wine has acquired Naked Wines today for around £70 million. On the surface it is a straightforward but interesting business deal giving each a new injection of energy. Underlying this, however, is an interesting story of conquests and empires that are a lot less regal than they are imperial.

Source: Wikipedia

Julius Caesar
Source: Wikipedia

[read more here on Harpers]

The key is that Rowan Gormley, the entrepreneur behind Naked Wines, but also Virgin Wines and before that Virgin Money, has been appointed CEO of the acquiring business. What ‘assets’ were the real target in this exchange?

A lot more will be revealed in the days ahead of the strategy for the separate businesses and whether, and how, they might be combined, but as this unfolds, I think it would be instructive to look up the life story of one Julius Caesar.

“Caesar is considered by many to be one of the greatest military commanders in history.”

Rome too was once ruled by kings, but the military exploits of generals in the field became the route to power and these ‘imperators’ took over the Empire. No more ‘majestic’ rule, it was time for the new ‘imperial’ one. All subsequent leaders not only became known as Emperors, they even adopted the ‘title’ Caesar.

Maybe the newly combined business should change branding, not to Majestically Naked, but to Imperial Wines instead?

Just a thought

Hail Gormley!

 

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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Time really is money, online

Still think that social networks like Twitter aren’t worth your investment of time?

Read this for an example and a couple of tools that might help change your mind (disclosure; Vrazon is reseller for the second)

What I Wore Today (almost)

What I Wore Today (almost)

A post by a friend, Poppy Dinsey (@poppyd) made me think about this issue today. Since I met her, via twitter of course, she has gone on to launch an internet fashion sensation – WIWT (What I Wore Today) and as she says:

I have achieved endless things because of tweeting. Twitter is still one of the largest drivers of traffic to WIWT.com, a business I was only able to set up because of an idea that spread through – yep, you guessed it – Twitter. Twitter has enabled me to market my business, my sense of humour, my opinions, my style and my writing to literally millions of people. I’ve been able to work with brands from teeny tiny boutiques and emerging designers to global giants like Vodafone, Universal Pictures and Unilever, often solely because somebody has found me on Twitter. I’ve never once paid a PR agency, but have appeared in nearly all the mags and papers of this country for something or other…again, often simply because of journos following me on Twitter or someone recommending me via Twitter to a journalist who otherwise would never have found me. I know this isn’t your ‘usual’ Twitter experience, but it’s one I’m massively grateful for and lord knows I’ve put a LOT of time into tweeting to make it happen. I didn’t have ANY contacts in fashion, tech or property when I started in each of these industries…but I made sure I made them using Twitter.

It has been hard work, but she had a goal, and put in the time and effort.

So how might you benefit too?

LEAD GENERATION TOOL

Lead Generation Sample from Twitter

Lead Generation Sample

Today Twitter announced a new feature that will make it MUCH easier to capture important, and USEFUL, information on your audience: Lead Generation Cards. This new tool will allow businesses to embed a small form in a tweet that users can complete and send back with little or no effort.

This will allow wine businesses; wineries, retailers, journalists selling subscriptions and so on, to get the three most important bits of data for generating a return on investment in twitter; a user’s name, Twitter handle, and email address.

Twitter is great for several things, namely conversations (that you can start, join, or listen-in to), quick questions and answers, and sharing links. However, businesses should have a goal and twitter is not the place for lengthy, detailed explanations, private conversations or selling. Email still is the best way to do this, but if you take them together, you can not only capture people’s email addresses, you can build the kind of relationship that ensures they actually open and read them.

INTELLIGENCE GENERATION TOOL

Vrazon has discovered a great tool for getting to know the audience you have painstakingly built up with your time spent on twitter, facebook, linkedin and through email; Nimble.

Nimble Contact

Nimble Contact

Nimble is an online CRM tool that is specifically built to give you a much broader picture of the people you follow by combining all a user’s profiles on each of these social networks into a single place. You can have thousands of followers on Twitter and Facebook, and many professional links on LinkedIn, but combining this information is EXTREMELY hard.

They key, of course, is email because it links them all together.

An email address is still the most valuable bit of information, even in the age of the social network.

All of a sudden, time IS money because you can finally convert effort into leads.

 

 

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How to improve the use of social media in the wine business?

Social WineIntroduction: For over 3 years, we have worked closely with the Burgundy School of Business both as a company – hiring interns to work with the EWBC, and as a research engine – helping us conduct field studies on various subjects. This year, Aymeric Dehont conducted a host of research for us, which eventually inspired him to create a paper on the fragile relationship between wine and social media. We appreciate Aymeric’s hard work putting together his thoughts and trust you will share your feedback with him. Keep in mind this is from a very European perspective. 

How to improve the use of social media in the wine business?

Introduction:

As a Masters student in Wine Business in Dijon, the regional capital of Burgundy, I’ve continuously questioned myself on many issues within the wine and spirits sector. Yet, one of the most debated subjects has been the apparent effectiveness of social media. After attending the EWBC – Digital Wine Communications Conference, I have come to under that the wine & spirits industry, in general, hasn’t succeeded in its use of these new tools. Therefore, I wanted to get a better understanding on how to improve digital communication and what would be the ideal online strategy to follow.

This paper will provide a brief analysis of how social media is currently affecting the wine industry based on articles, marketing analysis and knowledge.

Social media and the impact on marketing

It is true that social media has attracted an inordinate amount of people over the last two decades and currently, almost everyone is using at least one of its platforms. In large part, this is because interaction between each other, and the community, has always been a basic need for humans, referring to the very famous Maslow’s hierarchy of needs pyramid.

As observed in the Nielsen Social Media Report 2012, social media is mainly used when watching TV in order to interact and function as ‘social care’ for customer service. Approximately, 47% of social media users were actively involved in social care. In 2011, more than 80% of the Fortune 500 companies were using some form of social media to connect with consumers.

Companies that are using these tools efficiently are not advertising, but instead creating bonds between themselves and the consumer; thereby establishing loyalty. The customer isn’t considered as an asset anymore, but as a person to interact with and to satisfy. Bear in mind that social media is made to connect remotely between humans, and being “connected” means interacting with each other. Advertizing is not an effective means to create a relationship with people, but rather a means to provide a straightforward message to the consumer without receiving direct feedback. 30% of consumers found advertising on social media annoying and only 25% are willing to pay attention to it, which proves that the use of social media is totally different from regular advertizing campaigns.

Moreover, the Nielsen report tells us how social media has impacted modern marketing. Indeed, consumers are now hyper-informed on many products; they continuously need to know more about the product or service they intend to purchase and want feedback from other purchasers through word of mouth. Social media limits uncertainty before purchase, and increases transparency of companies because the consumer gets involved and can have access to the company, thanks to direct contact with employees.

“Social media is word of mouth on steroids” said Amanda Hite, founder of Talent Revolution; Word of mouth is a major communication tool for the wine industry. Indeed, 80% of online shoppers are guided by reviews from other consumers. This is logical considering that shopping remains a social activity where people can interact with each other and share opinions on products. When you buy online, companies want to recreate this interaction between buyers through a digital experience by keeping that community feeling alive. Moreover social media helps to engage customers with brands and companies to change their advertising techniques. In other words, this is what we call Web 2.0, a place to SHARE and INTERACT with each other.

The internet user becomes the one who can tell the stories. For instance, France 24 opened a website, The Observers, where everyone can share daily news content. The pictures they took, the videos they recorded and, moreover, the events they have lived, can be shared on this platform and remain present well into the future. This is a great example of how people directly share experiences and opinions digitally using social media.

What about in the wine and spirits sector?

During the EWBC, I realized that social media hasn’t within the wine industry simply because they aren’t listening to the consumer. The industry believes that it is the consumer who must be better informed and more actively involved, not the company itself. For instance, in this advertisement from the Center For Wine Origins, https://www.youtube.com/watch?v=wUePmgc5HJQ, you quickly notice that they tell the consumer to “understand the terroir”. In other words, they are teaching consumers how to enjoy wine, as opposed to providing information that the consumer wants. Result: 74 views after 1 year!

So how do we improve the use of social media in the wine and spirit sector?

The wine industry, mainly in the US, provides us with several great examples of efficient strategies to follow. Let’s focus on some of them:

I really enjoyed the story of Barefoot Wines because it shows how small wineries can compete with big groups, thanks to online communication strategies and social media. Indeed, Barefoot Wines now has 4 times more followers than Jacob’s Creek with 370,000 likes on Facebook (135,000 for Jacob’s Creek) and more than 10,000 followers on Twitter (2,000 for Jacob’s Creek). Why the huge difference? Only because there is someone at Barefoot Wines who is constantly behind his computer interacting with people on several social media platforms.

Engagement is crucial to create a real relationship with people. Gary Vaynerchuck, founder of VaynerMedia, said he can spend 4 to 5 hours a day on Twitter to answer each tweet he receives. Nowadays, he has nearly one million followers. This is a great example of how to succeed in attracting people’s attention using social media.

Another interesting story is the one of the Pacific Rim winery, which invested around $10,000 in a social media campaign, in cooperation with two social media agencies: Grow Creative and Anvil Media. Their objective was to digitally educate consumers to gain market share with the retailers with an active communications campaign. To do so, they both created a website, rieslingrules.com and released a book “Riesling Rules Book” (65,000 books sold at this date), to be the leading voices om Riesling wines. The use of social media came later when people started to share their increasing passion for those wines and interact with each other and the winery itself. More than 30,000 people liked the Facebook page. Up until now, Pacific Rim succeeded in creating brand awareness and a fan base online.

Social media in the wine industry creates the opportunity for consumers to rate wines based on what they like. The use of applications on smart phones, commonly called “apps”, is extremely valuable for the wine industry because it allows consumers can say what they like, not based on “expert” opinion, but rather on their personal preferences.

In the end, wine is just a drink, but one which links people to each other, and social media is a tool to recreate that interaction online. With Twitter, Facebook or Tumblr, people can share their experiences related to wine and companies can help people connect with each other. A winery available, listening and interacting online with the consumer is a winery which is increasing its brand awareness.

In conclusion

We see that social media in the wine industry is generally being used more frequently and effectively in new world countries. The old world wine countries are still conservative, waiting for the new generation to come up and change the trends.

Social media also creates jobs, as community managers have become more attractive to companies to ensure a successful online presence and use of social media. The objective is to be customer oriented, able to be connected, listening and understanding the consumer’s needs. A simple and basic rule of marketing which the wine industry often forgets …

References:

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