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.
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.