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Naked Wines is launching a new version of its website today, along with a new system of pre-ordering wine in advance. 

I've been talking to Naked Wines Founder Rowan Gormley about the changes to the website, as well how the company uses social media.

Rowan will also be speaking at Econsultancy's Future of Digital Marketing event in June.

How does the pre-ordering system work? 

The idea behind this is to make boutique wines available in the UK for less than the wine would normally cost at the cellar door. For example, an Aussie wine would cost less in the UK than you could buy it for in Australia. 

We give customers the opportunity to pre-order the wines six months in advance, and 40/70% of the costs are avoided this way, things like commissions, costs of marketing, bottling, warehousing and so on. This saving can then be passed on to the customer. 

We’re working with small winemakers, so they are still getting a decent price for their wines. Customers who order before production will get the best price, and the closer the wine gets to the UK before order, the more it costs. 

Saves costs of selling the wine, winemakers who know they have enough orders can plan in advance, so there is no wastage, storage costs are avoided since orders can be sent out as soon as they are produced. 

For the winemaker, the cost of uncertainty is avoided. For example, the bottling process can be more cost-effective for winemakers thanks to efficiencies of scale, as they could bottle the entire production in one run if they have enough orders already, making significant savings.

At this end, we save on warehousing and packaging costs. Normally, we take a batch of wines from a container, shrink-wrap and warehouse it until customers place an order for it. Then when it’s picked, it’s packaged and sent to the courier and then delivered. 

With pre-ordering, the wine can be sent straight to customers once it arrives in the UK, and we avoid these costs. 

What changes have you made to the website? 

We’ve tried to simplify the website and make a number of processes easier for customers. 

For example, the basket now more prominent, and shows contents and costs. Also, since we offer cash back, many customers want to know how much is in their account to put towards the next order, so we’ve made this easier to find, and displayed it underneath the basket so customers can see both figures when deciding what to buy. 

We want as many customers as possible to rate wines on the site, so we’ve made this easier. Out of every box of 12 bottles, there are likely to be one or two that customers don’t like as much, so we want to identify those to avoid those in future. 

To do this, we’ve simplified the ratings mechanism. Instead of awarding a mark, users can simply say whether they would buy a wine again or not via a simple yes/no question. 

We’ll also provide a recommendation for the future, and this is based on our data, winemaker’s descriptions, and other customer ratings.  

This can all be done within a single page, which allows customers to review their last order as well as placing the next one, as there is a basket summary and checkout link on the same page. 

One thing you notice about the site is that most wines have user ratings and reviews, and there is generally a lot of interaction on the site - how have you achieved this? 

One reason is that we were the first wine retailer to do this, and people like to talk about wine, so we attracted a lot of these customers. 

Also, there is a big difference between us and companies like Laithwaites in the way customers can interact. On Naked Wines, there is a real human winemaker they can talk to on the site, and there are plenty of interactions between customers and winemakers.

Customers can give feedback direct to customers about the wines they have just tried out, ask questions about wines they are thinking about buying, or when the next batch will be ready. 

It’s just not the same when you are buying wines that have come from a huge co-op in the South of France which produces wine in huge quantities. 

It’s like taking a trip to a farmers’ market and being able to talk to the farmer or produce about the produce, where it had come from, and get a real feel for the products. 

What has worked for you in terms of user ratings? 

Our customer behaviour shows a clear correlation between price and volume of sales, so as prices for bottles of wine get higher, fewer sales are made. 

We have a feature where customers can rate wines on value on a scale from 'pricey' to 'bargain' and the wines that buck this trend are the ones that customers have not only rated highly, but have rated as value for money. This has been a valuable feature. 

Have you used customer feedback to improve the new site? 

We have a Naked Innovations group, and we have continually asked customers for ideas about what works and what doesn’t, and the kind of functionality they would like to see on the site. 

This group has been really valuable, and we taken suggestions from users for features they would like to see, and have used this feedback to improve the site. 

You seem to get some positive feedback through social media - what is your secret? 

One thing we don't do is to try to sell to people on Facebook or Twitter, but it works well for customer services and PR. What tends to happen when something says something negative about Naked Wines, other users jump to our defence. 

For example, on Twitter last week, a user posted about a problem with a delivery she had received, and within two minutes another user replied to advise them that they could easily contact us to get the order picked up. 

Opinions formed on social networks are really valuable for us, and it means much more when other customers say something positive than when if we say it ourselves. However, if customers do have questions or issues, we will contact them directly to help them. 

Do you have staff dedicated to monitoring what is said about Naked Wines via social media? 

We have four staff looking at this, with various columns set up on Tweetdeck, and we will respond quickly to conversations on Twitter or Facebook, as well as talking note of what people are saying. 

How has Naked Wines done since it launched (in December 2008)? 

We have had 70,000 customers to date, which is miles above the original forecast. This year’s turnover figure is projected to be £9m, though we’re currently on course to surpass this. 

As of last week, we are also profitable for the first time. 

Graham Charlton

Published 29 March, 2010 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

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Mike

I do not understand how people do not realise the whole naked wines concept is a HUGE RIP OFF scheme. These wine makers are not necesarily small, much less depend on naked wines to survive, neither they only produce for naked wines. All those wine makers produce wine that is sold to supermarkets and shops across the UK and elsewhere...under their main (many times very well known) brands.

Naked Wines rips off people by asking those producers to produce the exact same wine under a different label. Why? So that consumers (you and I) cannot compare prices, believe their lies, and "agree" to pay some times TWICE the regular price.

They create a monopoly that allows them to set much higher prices for the wine, charging some times TWICE the supermarket price for THE SAME wine (produced under another name). That's the basis of the whole Naked Wines business concept.

I'm in the wine business and know at least a couple of producers who currently produce (or have done so in the past) wine for naked wines. The wine is exactly THE SAME the sell to many supermarkets in the UK (and worldwide). You can buy those wines in Tesco or Waitrose for 4.99, but naked wines charges you up to 9.99, for EXACTLY THE SAME WINE. That's double the price! What a great business...

On top of that, as said before, those wineries do NOT depend on naked wines at all. Typically they produce a few different wines (some of those producers have a portfolio of a couple dozens wines) and only a couple are labeled differently for Naked Wines (again, those same couple are labeled for the usual distribution chain - supermarkets). The volume naked wines generates for these producers is usually neglible compared to what they produce for the "rest of the world", including most supermarket chains in the UK, for exactly the same wines.

On top of that, those naive people that become "angels" are only making naked wines bank account grow larger, not helping any wine maker survive. Come on people, wake up!

over 6 years ago

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Mike

Unfortunately Rowan, you have to sell your story, which is the naked wines story. For your regret, I know ast 2 of your producers (one located in Montsant and another in Rioja). I do not know if you still work with them but you certainly did in the past. Funny enough none of them fit your description: 

- they are not big brands, but they are not tiny either

- they do NOT depend on naked wines to survive. They sell far more in all international markets than they'd sell to you.

- funny enough, the same wine they make for you, it is sold UNDER ANOTHER NAME, to mainstream supermarkets, ALSO IN THE UK.

In addition

-          74% of our wines sold are made exclusively for us, and cannot be bought anywhere else. >> WRONG: 100% of your wines sold are LABELED exclusively for you.

-          68% of our wines are made by winemakers for whom we are their biggest customer. >> Does this mean that 1 in 3 producers does not depend on Naked wines? That's not really what you advertise, is it?

-          We do sell wines made by big producers that you can buy elsewhere....which accounts for about 6% of our sales. >> WRONG: 100% of your wines sold are LABELED exclusively for you.

Your business model is based on missinformation: the fact that consumers can NOT compare the prices of your wines anywhere else, because, even though the same wines are widely available, consumers do not know this, as you sell them under your own label. Plain and simple.

over 6 years ago

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Jock Harvey

Mike, your comments highlight the fact that you have experience in the wine trade but as a winemaker who supplies Naked Wines, I know your comments are not all correct. Naked Wines does allow winemakers to supply directly to consumers via Naked Wines and does not dictate a price that is below the cost of production in the same way many of the buyers in the UK do. The large supermarket chains buy bulk wine from Australia (and other countries), ship and bottle in the UK and then load their shelves excluding small producers, creating a verticle business that screws the grapegrower and winemaker.

Naked Wine customers (Angles and Arch Angles) have direct access to the winemakers and the grape growers, they can ask how the grapes are grown and recieve feedback on the wines. Naked Wines has recently recruited a number of exciting winemakers in Australia who have no other access to the UK wine market and will make and bottle great wines for Naked.

At the end of the day the wine buyer will decide, generic juice bottled and labelled in the UK with no way of communicating to the grower and the winemaker or they can join a wine community such as Naked Wines, speak directly to the winemaker and ultimately decide if the price they pay for wine offers a value proposition they are happy with.

over 6 years ago

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Jamie de Wet

Mike, you obviously have not spoken to anyone supplying the UK supermarkets recently. Producers are pulling out of the UK supermarkets daily because they can't keep supplying at a loss (I speak from experience) - every supermarket is only interested in getting one over their competitive supermarkets (they DON'T care about us winemakers, producers or our labour - even though they like to tell you that they do). The UK supermarkets are responsible for many a business going "belly up". Naked is interested in making it a long term viable business for all involved. Mike, next time you buy a “bargain deal” from your supermarket, you may just find that you have taken a loaf of bread off the table of the family at the bottom of this food chain!!!

As a winemaker and supplier of wine to Naked, the BIG difference is that we are all one big family (suppliers, naked, customers, fellow winemakers, winelovers, everyone). We try offer our product to the customers at the best price and best quality possible - and yes, it is under our Arabella brand (the name of our winery and farm). Naked is simply a means for us to get to know our customers and what they like or dislike about our product. We can only improve our product if we can listen to our customers. When customers come visit us in South Africa, we feel like we already know them because we have been in contact through Naked.

Naked is very similar to Twitter and Facebook (Twitter and FB make it financially viable by selling advertising - Naked sells wine) - they are social networking tools where people meet - at Naked we simply talk about wine - something close to all our hearts.

over 6 years ago

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Ben Drury

Mike, I am one of those naive people who are making Naked Wines bank account grow larger. Your facts are wrong. Plain and simple. Wrong. I know they must be because I have been part of the process in obtaining some of the wine sold by NW.

"100% of your wines sold are LABELED exclusively for you." If this was true then Rowan has spent a huge amount of money in making 'fake' labels at a number of tastings. 120 bottles tasted in Feb 2009 from which we (customers = naive angels) picked 10 and the labels are exactly the same as they were when we picked them. To do this as you suggest, NW would have had to go to the trouble of making labels for all 120 wines as they could not know what we would choose. The same would have to have been the case at the open Argentina tasting at Lords later that year. This time the label faking would have to include all the wines that other wine buyers were trying. Ditto the South African tasting at Earls Court where we chose another 10 wines from 250 that were tasted. I really think your label conspiracy theory is daft. Of course, there are some 'back' labels that are exclusive to NW as they give the information that NW are responsible for the production of that particular wine.

If, as you suggest, NW wines are twice as expensive as exactly the same wines in supermarkets, perhaps you could be a little more precise and name those particular wines. There are currently 202 wines on the site and I would love to get them cheaper. If you are telling the truth, I will arrange a blind tasting between NW and their 'exact' supermarket partners. I do expect a good long list from you.

As a naive angel, as well as choosing the wines to be sold I have also helped decide the price that I am willing to pay for the wines. For me, this is the simple fact that shows I am not being ripped off by NW. If I choose the wine AND set the price I am willing to pay then any ripping off is being done to me by me! If a winemaker wants an RRP of £4.99 but, on tasting, I (and my fellow naive angels) say we are willing to pay £9.99 then you should applaud our commitment to the winemaker rather than blame NW for what we have chosen to do to ourselves.

So, Mike, be precise. Anyone can throw mud but it is more honest to give real facts to support your sweeping claims. You say you are in the trade. Anyone would think you were working for a rival of NW and were running scared at their success and having to stoop to unfounded smear tactics.

Prove me wrong. If you can.

over 6 years ago

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David Derbyshire

Mike Your information sources are clearly not representative of the bulk of Naked Wines' suppliers. As with Ben I've just returned from a memorable day at LIWF, working with Naked to help them find some new winemakers. Between us we talked to 30 or 40 winemakers all seeking representation in the UK. In the list we were provided (by LIWF) we found that some of them were already supplying in the UK, and at that point we walked away. That's not to say that Naked won't work with suppliers who already sell to other UK retailers, but as Rowan has already outlined, those are in the minority. After a hard day's work (!) tasting all of these wines we fined the list down to 5 wines, from 3 wineries, one in Chile, one in Spain, and one in Australia. They are all (in relative terms) SMALL winemakers, all appear delighted to be working with Naked, and what's more, within 24 hours of our selection, one of those winemakers had sold all of the allocated stock (200 cases) to Naked Wines' customers. The buzz that I picked up on talking to people the following day at LIWF about what Naked had just done was incredible. I spoke to Tom Cannavan (The Wine Gang) and he was astonished, and incredibly positive about it. You have a choice to take your business elsewhere, and as Jamie and Jock have stated, to perpetuate the old, outdated ways of selling wine in the UK, or you can think outside the box as Naked have done, and start a revolution. So far everything you've said smacks a wee bit of very green sour grapes. Looking forward to your response. Best David

over 6 years ago

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Ben Drury

I just received an e-mail from one of Naked Wines winemakers in Australia. Here is the pertinent section:

"just saw your comments (and admittedly not the rest, but I think I get the gist of it!!!) and wanted to confirm that we ABSOLUTELY, CATEGORICALLY bottle the same wine, under the same label for you guys. And you also happen to be some of the most astute buyers in the world i.e. you get it cheaply too! MATT FOWLES MANAGING PARTNER www.plunkettfowles.com.au"

Mike, feel free to contact Matt for confirmation. Feel free to apologise also, if you wish.

All the best,

Ben

over 6 years ago

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Drinks

Pretty awesome figures £20mil in the first four months..... lets see if I can launch a new online experience to take on the wine world!

about 6 years ago

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Drinks

Hi Naked Wines / Rowan Gormley - how much did you spend on advertising/marketing in the first year?

Thanks

about 6 years ago

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Rowan

Too much!

Rowan

about 6 years ago

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Drinks

Lol @ the person above, a reply from the real Rowan Gormley would be great....

about 6 years ago

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Ian

It's been interesting reading the above comments as a new customer to NW in the last 2 weeks. As I do so I am drinking my 3rd bottle of red supplied in a mixed case by NW (not third tonight I hasten to add !) . I very much liked the concept of the direct selling from grower to customer with NW taking a percentage (5%) for being the link.....and of course doing much more. Also being able to make regular contributions to my account towards helping producers avoid the likes of the big wholesalers. it must be great knowing you have sold your produce to individual customers before it even ends up on the ship ! The likes of Mike have been seen before on many a site. if you want to come on and tell me which wines sold on NW are being sold under another name, in bulk, in my local supermarket, then I would listen further. Until then, I'm happy to surf the NW site and choose my next case to be delivered the next day, whilst being able to read about the producers who make it. Sure, I may pay over the odds on occasions but for me, it's a lifestyle choice and I feel like I'm part of a community. I also get my 1/3rd cashback which adds to the experience for my next order. I could go to Asda tomorrow and buy their wines reduced to £3 per bottle (new offer).....Hardy's etc......but i choose not to. Rowan - it's a great concept and I wish you well. PS - I have no affiliation with NW other than being a customer. Billy3 is the first half of my e- mail so you'll find the remainder on your records :-)

about 6 years ago

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Annie

Hi Drinks - I can help you with the marketing question.  In 2009 NW's published accounts show that they spent £2.2 million on 'selling and distribution costs' and a further £1.4 million on 'Administrative expenses'.  Given that they only had revenues of £4.4 million this meant that they lost a pretty eye-watering £2.8 million loss!  As far as I can see NW have embarked on a huge traffic and customer purchasing campaign.  This has been successful in that they have attracted some customers - but clearly that are bleeding cash at an astronomical rate.  It all feels a bit 1999 .com bust to me!  But it is important to realise that NW is not a small, pluck British company.  They are owned by the largest mass-marketing and wholesaling company in Europe - WIV Wein AG.  Putting two and two together looking at their accounts it looks like WIV gave them £4 million in order to try to buy their way into the UK wine market.  They have clearly burned through most of that now and I would expect to see them less active buying customers through ad words and things in the future.  But NW spend a lot of money on PR, so if you criticise them except a barrage of abuse from their PR company pretending to be loyal customers attacking what you write.  But basically they are a just a division of the giant mass-market conglomerate. This is what makes comments like "Ian" (one of their PR people I would guesss) esp funny - the bit about "avoiding big wholesalers".  Come on guys, you are in the same company as Hallgarten and many of Europe's very biggest wholesalers.  Please get real ...

about 6 years ago

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Rowan

Now, now Annie, sounds like a nasty case of sour grapes you have there

I realise that you're are not very interested in facts, but here are some anyway

-  we don't have a pr company

 - We do have 100,000 customers. Come and count em if you like.

 - Every one of those customers is...er...a customer. Check them out on our website

And if our German investors are so keen to subsidise uk wine drinkers, what’s the problem exactly? After what they did to England in the footie it seems the least they can do...

Rowan

Ps if you want to take even more money off our German investors, I can recommend some nice wines for you?

 

about 6 years ago

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Paul

Rowan, 

you really do not use a PR company? Giving the amount of press you get you must have an exceptionally good internal PR person (jealous). 

Paul

almost 6 years ago

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Rowan

No we dont have a PR company. We did once but they fired us after a month for being impossible!

Rowan

almost 6 years ago

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John

Who on Earth can believe that winemakers, no matter how small, cannot afford to make a simple website and show up at 1-2 wineshows to sell their wines???

Who on Earth can believe that a winemaker would just dedicate his/her time to produce wines for Naked Wines exclusively, and no one else. People wake up! Put yourself into their shoes: you are an Australian/French/Italian/... winemaker and you find that it is best for you to sell only wine to one client, who only sells in one country (UK), closing the doors for the rest of the world...oh boy...

I've dealt with wineries made up by only 2 people and making less than 50,000 bottles/year and they sell their affordable wine all over the world!

Now, if you believe Naked Wines has onl y 5% margin, you do not know how the wine business works, and you deserve to buy from them and live in ignorance. Taking into account Naked Wines works directly with producers (the only true thing in their story) I would say 50% gross margin is something more accurate.

After reading all comments I think it's very easy: just publish the contact information (and I'm talking address and phone number) of all your producers so that we can pay them a visit when we are in France, Italy or Spain. This is done by most online wineshops, and it's not a problem. I have the feeling that you won't be able to provide that, simply, because most (if not all) of your producers DO NOT EXIST IN THE FORM YOU PORTRAY THEM :) Period.

Sorry, the whole NAKED WINES thing makes me very upset. Not because I try to defend any other online wine merchant, but because you just take advantage of people's ignorance.

almost 6 years ago

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Ryan O'Connell

Haha, I'm really late to the game here, but I see the comments are still coming in as recently as this month.

I'm a supplier for Naked.  I'm not going to waste time arguing with the detractors, but I will say that I'm super happy with Naked. 

I've personally met dozens of Angels in the past six months.  The Angels are wonderful and I'm happy to bring them wine at lower prices.  They're happy to drink it.  Everything else is sort of irrelevant.

almost 6 years ago

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John

Ryan, you're a supplier? You mean, a wine maker? What wines do you make? Do you have an address where we can visit you some time? At the end of the day, since you struggle to sell wine (and hence need the "help" of naked wines), you would not mind we pay you a visit some time and get a couple of cases, would you?

over 5 years ago

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Drinks

Hi Annie - I have not seen their accounts yet, but its a shame that the case is that they spent millions on marketing becuase what I thought was that Rowan just took I think 25 people with him from Virgin and they set up their own company to sell wine with say £100K in his pocket and they used their own skills to get to where they are.... for example he had one seo guy, one marketing guy, 5 packers etc etc and they worked their socks off...... but it appears they have crap loads of money to blow on obtaining customers and ranking in the serps.

So what is a person to do if they do not have a few million in their pocket to blow like NWs?

I guess its hard work.........

Rowan, I will try and make it happen with VW..... cant tell you what VW stands for yet

over 5 years ago

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Drinks

BTW Rowan, what platform is your site built on, it looks like wordpress to me.....?

over 5 years ago

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Shoes

WE LOVE NAKED WINES!!!!!!!!! :)

over 5 years ago

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Annie

Drinks - sorry it has taken me so long to respond. Yes you can download all the Naked Wines accounts from Companies House (look under "www.nakedwines.com"). You will see that they were given around £4 million by the German mass wine distributor WIV Wien AG (turnover of E400 million or so) at launch. So the myth that Naked is a little venture of Rowan and a few fearless friends is nothing but a myth. The £1.4 million in administration cost for year one equates either to some pretty hefty salaries for the top brass or a shed load spend on marketing and traffic acquisition. I would guess it is a combination of the two. As for Rowan's claim that they don't use PR I know this wasn't true in the past as I know the company they used. I don't in any way denigrate what Rowan is trying to do. I think their concept is odd and doesn't make a lot of sense but the website looks good and they clearly have convinced a lot of people that they really are getting a 'unique' product. Clearly those inside the industry suspect that this isn't the case though and I suspect the people is being hoodwinked to some extent. But what IS annoying is the presentation of Naked as this plucky little British start up when in fact it is massively endowed sub-division of a German multi-national!

over 5 years ago

Rowan Gormley

Rowan Gormley, Founder at Naked Wines

Dear Annie

You've missed the point completely.

We don't claim anywhere that people should buy from us because we are a plucky little start up...we say they should buy from us because they will get better wines for less money.

we get better wines for the money by investing in our winemakers, to get preferential prices.

Now, we have 50,000 customers investing £1m a month with us so we have plenty of capital to invest in our winemakers.

But when we launched we didn't have anything, so we needed to raise the cash from somewhere...hence the role of our German investors. Whose role, BTW, we announced in our launch press release, so congrats on the detective work there!

As to your other claims
- "Shed load spend on marketing. OR hefty salaries for top brass". Just not true. your facts are wrong. Why don't you check our updated accounts?
- "NW spend a lot of money on PR". still not true Annie, we don't actually have a PR company and have not had one for 18 months.
- "expect a barrage of criticism from their PR company" as above, we don't have one.

Now lets talk about you Annie. You've had a lot to say about us. Don't you think it's time you declared your interest? It is hard to believe that you have none, but why not remove all doubt and come out of the closet?

Your admirer

Rowan

over 5 years ago

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Stephen Powell

Very bizarre to see Naked Wines getting so much negativity, so may people who have time to spend on-line for what cause? To 'protect' buyers? from what? Good PR and exciting deals?
I'm not a stupid man, I know my wine, I know my business.

I am a customer of Naked Wines (Customer, Angel, Member, Client - call it what you will), it is up to me and my fellow payers to judge value, quality and service, not non-payers.

For those of you who are not members who feel the need to spend your life on such crusades, move on and don;t spoil it for those of us with our eyes wide-open and our brains in gear who know a good thing when we see it.

If someone makes money from bringing me quality wine (I say that from the taste, not the PR), at the same time putting something back into the wine-making then good luck to them and long may it continue.

about 5 years ago

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dave

Hi,
I am (was)a customer of naked wines. I felt scammed. No question the wine was not worth what the top price advertised. The initial voucher offer - almost half price on a case is a widespread voucher. The wine tasted like £3.99 a bottle.
The whole thing was almost too 'twee' for my liking and 'Rowan'character creeps me out a bit - he sounds incredibly manipulative - in every piece of blurb or whilst contesting the barrage of criticism levelled at his company. They did not take my previous feedback seriously - I guess they simply don't need another wine lover like me - we all have a choice - do the research and avoid this site.

almost 5 years ago

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dennis

how do i contact you i am acustomer of yours and tried to check my account ballance but your web page does not recognise my password or e mail address

almost 5 years ago

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Rowan

HI Dennis, Just call us on 01603 281 800 or email help@nakedwines.com

Rowan

almost 5 years ago

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Lewis Perdue

I find it fascinating that the viciously negative posts here are all essentially anonymous. That makes me wonder: what do you have to hide that keeps you from standing behind your words? Hiding in this manner seems cowardly and certainly diminishes your credibility to the vanishing point.

almost 5 years ago

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