Tag Archives: consumer

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.

Instead 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

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.

Wine Bloggers’ Wines from Oddbins

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So, do wine bloggers have any idea what wines others should drink, or are they just good at telling us about the stuff they like?

I have to admit to being very afraid of the idea of being responsible for choosing wines for other people I do not know. The idea of being a “Wine Buyer” would mean I would never sleep again. I love wine. I love drinking it, sharing it, talking about it and learning about it. I enjoy how it impacts on the world, and generally changes it for the better. But I do not know whether YOU will like any particular wine or not. Building a business that requires such certainty seems hard to me.

Blogger Initiative

I was very impressed and intrigued, therefore, to see that 6 of my fellow UK wine bloggers got together with Oddbins to create a selection of wines for the rest of us to enjoy so I just had to buy a case.

The basic story is on the Oddbins Wine Bloggers Case page, but you should also read any of the bloggers’ own articles linked below.

In summary, the six bloggers had access to an entire Oddbins shop for the task of selecting 12 bottles, one red, one white, each, for a case that would cost no more than £100 (including delivery). A tough but enjoyable challenge.

So, I had two simple questions:

1. Is this a “good idea”?

2. Are the choices any good?

What a Good Idea!

To answer the first, I have to say that I admire bloggers who do innovative things and who are prepared to push boundaries.

Consumers would benefit from buying “taster” cases that helped them discover new wines and, bought in some volume, would also make them slightly more affordable. This may be the excuse they were waiting for.

Too often, the wines recommended on blogs and articles are hard to then find & buy, so making them immediately available (and deliverable) is a great encouragement for consumers to buy. This is one of the strongest points of online wine content.

The marketing has also been well done – Integrated Communications, at last!

There is a dedicated page on the Oddbins online site.
They’ve created memorable cartoons and images to bring the “online” personas to life
They’ve included the bloggers’ own wine reviews, including food matching ideas
The case came with the full information sheet
The bloggers themselves have kept the profile of the promotion high

Finally, I also think it is important that bloggers (of all industries) find ways to make money from their online activity because I know very well how much work it involves and how hard it is to make money from this without resorting to dubious internet marketing practices.

We ALL benefit

If wine bloggers could prove that they can identify great wines, and help to get them into the hands of consumers, we ALL benefit – producers, bloggers, retailers and consumers. If bloggers are adding benefit, then they do deserve a share of the “value” created, and they can start to make some money from what they do, creating great wine stories. There is nothing wrong with making a living.

There’s only one slight criticism. In the interests of transparency, considering this is a “showcase” (pun intended), I was surprised not to read more about whether the bloggers were actually benefitting financially from this. For the reasons listed above, I think it would be great if trusted bloggers could work with retailers and wineries. I also do not want to see hard work, and great ideas like this, benefit only some and not others, and I am sure those involved actually had costs to make this happen.

Two bloggers did make some reference to this which is great, though it is still a touchy subject, but sometimes openness is the best policy. I do not believe that any readers would object, but we do need to take the ammunition away from critics.

“Since picking the case, we have agreed with Oddbins that they would contribute to our expenses, on a tiny amount for each case sold. While I hope the case flies off the shelves, I won’t be giving up the day job any time soon. Then again, that’s not why I got involved.” – SipSwooshSpit

“So all that remains is for people to buy it and let us know what they think – I say this not for the pocket-money commission levels, but because this is an opportunity for us to engage in a conversation about these wines and I would love to know what people think about them.” – The Cambridge Wine Blogger

I am CERTAIN that if they are making anything it is not substantial, and it will not have influenced their choices of wines. However, from a disclosure point of view, this one would be useful for them all to have done. Having said that, it is a minor quibble form someone keen to make sure this goes well and helps more bloggers and wine businesses.

I hope it DOES fly off the shelves and that they do start to make some money! So of course I did my bit and bought my case.

Wine Reviews:

The REAL test. Were the wines they chose interesting and likely to get consumers to come back and buy more?

Well, since I have decided not to use this site to share tasting notes, I will have to leave you guessing a little longer. However, I will be adding my tasting notes to my personal site (where I do review wines from time to time) as I go through the case. You can follow along here:

Tasting the Bloggers’ Wine Selection from Oddbins on thirstforwine.co.uk

At first glance the prospects are good. I already know, and like, a couple of the wines. The selection is varied and covers many styles, prices and countries. Here is the list (as provided by Spittoon.biz:

The Oddbins Bloggers Case White Wine Selection

Casa Lluch Verdil 2010, Valencia, Spain
Raimat Abadia White 2010, Costers del Segre, Spain
Sal’mon Groovey Grüner Veltliner 2010, Kremstal, Austria
Domaine la Condamine L’Evêque Viognier 2010, Côtes de Thongue, France
Stone Rock Sauvignon Blanc 2010, Bordeaux, France
Porter Mill Station Chenin Blanc 2011, Svartland, South Africa

The Oddbins Bloggers Case Red Wine Choices

Domaine de l’ Arnesque 2009, Côtes du Rhône, France
Alma de Tinto Mencia 2010, Galacia, Spain
Henry Fessy Morgon 2009, Cru du Beaujolais, France
Chateau Haute Galine 2009, Minervois, France
Terre di Sava, 10 Nero Salice Salentino 2010, Puglia, Italy
Fully Loaded Grenache-Shiraz 2008, McClaren Vale, Australia

I congratulate Oddbins on the coup, and Tara, David, Paola, Tom, Belinda and Andrew for making it happen. I wonder if we will see similar things happen in the UK and beyond?

Related Articles:

Tom Lewis “The Cambridge Wine Blogger”: The Oddbins Bloggers’ Case

David Lowe “BigPinots”: The Merry Band of Bloggers

Belinda Stone “Miss Bouquet”: We’re on the case with Oddbins Literally

Andrew Barrow “Spittoon”: Oddbins Bloggers Case

Paola Tich “SipSwooshSpit”: Six Go Mad in Oddbins

Tara Devon O’Leary “Wine Passionista”: The Oddbins Wine Bloggers’ Case is Here

What’s so Odd about Oddbins?

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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.

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.

Oddbins hires advisers to study options (telegraph.co.uk)
Oddbins: Raise a glass to its fortunes (telegraph.co.uk)
Shock! Wine blog helps to sell wine (wineconversation.com)

Save money, invest in the future – if you have spare cash

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It is possibly no coincidence that in the same week that the world’s top wine ‘experts’ head to Bordeaux to evaluate the latest “vintage of the century” from 2009, that Naked Wines has chosen to update the concept for more modern times.

The annual Bordeaux en primeur scramble sees wine writers, retailers and other influencers run from winery to winery on a glorified “Chateau Crawl” tasting each of the top wines to rate them WELL BEFORE they are released.

“Let the customer decide how good a wine is, how much it is worth, and IF they are prepared to pay in advance for an allocation”

Do the Chateau offer this for fun? For education? For marketing? No, it is all about points, prices and sales. The global demand is such that the judgement of the visitors, plus the ego and history of the winery, helps to set prices for bottles that will only leave the winery years later then probably rarely be drunk and many spend decades being sold by one investor to another.

It is a shame. In principle the idea is a good one: Let the customer decide how good a wine is, how much it is worth, and if they are prepared to pay in advance for an allocation of that wine, to lock-in some discount on the final retail price.

Interestingly, regular consumers CAN start to do some of this, and not be restricted to Bordeaux either. Naked Wines has created a “buy early, pay less” system that means that the earlier that consumers are willing to commit to buying a wine, the greater the discount they get on that wine. They have even already selected a small number of wineries, some of them well know names (such as Teusner Wines) to launch with, and they do not cost £200+ a bottle.

It ticks a lot of boxes for me on The Wine Conversation: it focuses on unusual wines with unique stories, it engages consumers with the wine process (which inevitably includes distribution) and it still gives them a unique price advantage (i.e. discount).

I do worry about how many wine consumers are really willing to part with their cash in advance, when the wine could take months to arrive and they have to buy a case, but it is a great start.

I also wonder whether the discount being offered is really attributable simply to removing risk and some of the costs of sale (it amounts to a 40%+ discount in some cases), but if the consumer is satisfied that the final retail price is real, and that they really are getting a discount and offering help to wineries, then maybe the model will become established.

We might be seeing something very new in wine buying here, it could be fun to be part of it.

Disclosure: I am a Naked Wines customer and I have already “invested” in one of these wines

The Antique Wine Company Launches En Primeur Blog (prweb.com)
Bordeaux 2009 ~ It’s Complicated (acevola.blogspot.com)

Update on Reaching the Wine Drinker