Tag Archive - retail

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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What’s so Odd about Oddbins?

Oddbins is in trouble, and it needs a new lease of life, and probably a new investor, to survive, but brands CAN survive repeated near-death experiences if they have something to live for.

Newspapers and the wine media are full of doom and gloom stories about the future of Oddbins, once the UK’s coolest wine retailer. This week they announced that they were closing 39 shops, losing around 200 staff, and that this was probably just the start. The reality is that once the financial situation reaches a state of crisis, trust evaporates and things only get worse. Of course many of us working in the wine business either grew up working or shopping there, so many people are very upset.

Yogi on Meditation.

What seems to be missing from the discussion are positive suggestions on the future for this brand.

I know nothing of the financial or management discussions going on at the moment, but I thought I’d say something that has been on my mind since the current owners, under the management of Simon Baile, bought the business from Castel in 2008.

Let’s face it, the future of mass wine retail on the high street is either finished, or extremely uncertain*. We don’t shop there as often and margins don’t cover extremely high rents and staff costs. This is not the full story though. The Telegraph points out that wine is not alone here:

Every bottle of wine we’ve bought in the supermarket over the last year has been a bottle we haven’t bought from Oddbins and its rapidly diminishing off-licence peers. … Oddbins’ troubles are exactly those that have hit booksellers and record shops nationwide. Let’s hope that there’s not about to be another casualty to add to the list.

We have not stopped buying music, books or films have we? We just stopped buying them on the high street.

I know, I KNOW! Books and music can be ‘consumed’ digitally, but that just made them the first to move the shopping experience online. Our lives are changing and a lot of our shopping is now online. I don’t know about you, but our household rarely visits supermarkets anymore and orders stuff with excellent companies such as Ocado.

Wine is no different. Can you imagine an investor buying into a chain of high street bookshops, music shops or video stores in 2008? I’m sorry, but why did Oddbins try to save hundreds of shops? While they were doing that, people like Rowan Gormley were doing the opposite and establishing businesses like Naked Wines.

Oddbins established its reputation because it made wine accessible to people when the only alternative was “stuffy old wine merchants” – even supermarkets were hardly in the game in those days. The reputation was not really built on “convenience” of high street retail but on the knowledge of staff, the quirkiness of the range, the “coolness” of the Ralph Steadman brand image and the general excitement of discovery. I think I’m right in daying, however, that despite this, even at its peak, Oddbins was never greatly profitable even then!

It’s not death, it is moving on to a better place

Where can you best make that happen today, and try and do it profitably? Not in shops, but online.

The future of the Oddbins brand is to “ascend to a higher plane” and move its MAIN business online and keep a small number of outlets as “experience stores” (in the way Apple & Nike have done so well, and Laithwaites is already doing in wine).

I know it will be a tough transition, and I’m sorry to the many fine folks that will lose their retail jobs, but this would also create a whole new category of online advisor jobs where staff could actually use their wine knowledge and spend less time stacking shelves and dusting bottles.

Threshers tried to cling on to its retail model, and after a protracted series of death throws, it eventually collapsed. That brand didn’t have much to live for. Oddbins is different. I believe, along with many others, that it deserves to continue, but it must go back to its ‘Odd’ roots and embrace the future, not cling to the past.

* Real local shops will survive, but big brands are unlikely to. Even Majestic avoids the actual ‘high street’ and their model is based on finding other local sites.

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Virgin to tempt US consumers?

Virgin Wines
Image via Wikipedia

It’s a bit if speculation, but I’m guessing that Virgin Wines is about to start targeting US consumers having been built up in the UK.

Since they started they’ve always been at www.virginwines.com which, when they started (as one if the longest lasting players in this space), was sensible as country specific domains such as .co.uk were still misunderstood and mistrusted.

It seems that they are transferring their existing site to the www.virginwines.co.uk URL and asking bloggers who had included links to their old site to change all their links (a PITA for no specific reward other than doing a favour for our readers and their Google visibility).

Why would they do that? Presumably because they have separate plans for the .com URL

I have not seen any announcement about a US consumer launch, but it makes sense to expect one. It will be interesting to see how the model works in the complex US market, and what that means, also, for the UK business.

If they have a much bigger market they could end up simply sourcing more volume lines, or they could increase their buying power for more, small parcels of greater interest, we shall see.

Anyone know any more about this? Presumably someone at Virgin Wines is watching ;)

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Find Wine with Style

findwineAt the recent The Wine Gang Christmas Fair I had the chance to taste lots of wines and meet importers and wineries from around the world. One of the ones that stood out for me was a small online retailer looking to sell wines in a novel way: FindWine.co.uk

Most wines in this country, whether in the supermarkets or independent merchants, are sold mainly by country. They might then be divided by region, price or even style, but the first arrangement is almost ALWAYS by country. Most (surviving) online merchants have therefore taken this format as well, and although you can usually filter by many different criteria, country still dominates the thinking.

The other thing most retailers have in common is that they generally list a larger range of wines that may then be categorised or tagged with tasting or buying information to help consumers decide between them. The thinking is, if you give consumers a broader range of choices, they’ll find something they’ll like … and buy.

The truth is, many consumers are not looking for anything too specific, and in fact are often put off by too much choice. They want a good deal, and a recommendation of a ‘good’ wine, so may well leave without buying anything.

FindWine decided, instead, to create a list with only 54 ‘slots’ that represent 6 different price categories across 9 different ‘styles’, and find just 1 wine that is a good example for each. The prices vary from under £5 to £15+ and the list of categories includes “zippy” whites as well as “soft-isticated” reds, so should appeal to lots of consumers.

I think what these guys are up to is very interesting, especially as their model allows them to buy good quality wines in small parcels so they can keep things fresh and change regularly. All we need now is a bit more interaction and visibility from the faces behind the business to demonstrate their passion for the wines and give us confidence they are choosing interesting wines for these ‘slots’.

On that note, watch this short interview I recorded at the show with John Critchley, one of the guys behind FindWine:

If you have used them, or tried their wines, do let me know what you think of their model and their wines. Is anyone else doing something similar?

(Update: I apologise to Mike Howes as this is in fact John Critchley, Mike’s partner at FindWine who I identified incorrectly in the video)

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The value of a tasting note

Copyright symbol
Image via Wikipedia

I’ve been meaning to write about this for some time, I even drafted a post, but recent events have prompted me to complete it.

What is a single tasting note worth?

Ryan Opaz of Catavino recently asked this question on twitter after a discussion we had, and it still has me thinking.

I suppose one could argue that tasting notes are worth exactly what you pay for them. In most cases, such as blogs, wine social networks and twitter, the answer is NOTHING. They are free! They are given away as they are shared by those tasting wines mainly for their own enjoyment.

But this is only part of the story. There are those sites that do charge to give you access to information such as tasting notes. In addition, even if consumers are not paying for tasting notes, that is not to say they are not “worth” something to someone.

Subscription Sites

There are sites where some of the key ‘value’ are the tasting notes on offer – not because they are tasting notes as such, but because they are buying advice (e.g. The Wine Gang) or “insider information” on the potential future value of premium wines (e.g. JancisRobinson.com on En Primeur)

There will always be a small number of people willing to pay for these sites to get this information rather than searching through multiple sites or waiting to personally taste wines they mean to buy – which may not even be possible. The question is whether there are enough of them to make a site profitable.

Social Networks

On the other hand, there are many social networks out there (e.g. Snooth, Adegga, etc.) where the tasting notes themselves are free content. They still represent value for people, but this is exchanged for attracting more friends & followers or becoming known as a reliable expert. The value is in social recognition, something some might call Whuffie or ‘Social Capital

And then there is the law …

What prompted me to write this today was the Decanter story that a journalist, Martin Isark, is suing Majestic for using his tasting note to promote a wine called “Cuvée de Richard Vin de Pays de l’Aude”. He wrote a note which apparently included the words “incredible value” in a newspaper in 2001 – and apparently Majestic have been using those words, attached to his name, ever since to promote subsequent vintages. So now, he is claiming £50,000 in damages for “‘false endorsements’ and ‘infringement of copyright’” to get them to stop according to the story (NB. I’m no lawyer, I’m only reporting information available on other sites).

Whilst I agree that the note is [arguably] false endorsement if they do not clearly show it was for a (much) older vintage, it makes you wonder how much Martin Isark thinks that endorsement is worth if the “damage” is £50,000 (as far as I know the UK law does not allow for punitive damages). I’m sure that Majestic will have sold some additional bottles of the back of the note, but that would be a LOT of bottles. And what about the benefits to Mr Isark (who, I must admit, I had not heard of before this incident)? He has had his name promoted to thousands of Majestic customers over the years – could he not have made something positive of this, offering to review (accurately and honestly) future vintages or more wines?

So, the question remains, how much is a tasting note worth?

Like any content, tasting notes have value and with the right ‘context’ there are ways to make them generate money for someone – let’s just hope it isn’t all for the lawyers, but for wine writers and drinkers instead!

[full disclosure: I am married to a lawyer, and benefit greatly from the good work that lawyers do :) ]

[UPDATE 20/11/09 14:23: On closer examination, Martin Isark answers the question on his website. The answer, at least for Martin Isark is: £15,000 PLUS 2% of sales as a royalty payment. This is astronomically high, and also makes one wonder about the potential ethical issues of journalists receiving royalties on related sales. Of course, he can name whatever price he wants, but I wonder whether anyone would really accept this value as realistic? If so, I need to start writing more tasting notes ;) ]

[UPDATE 20/11/09 14:27: inserted the word "arguably" in para 9 erroneously missed off original post!]

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