Without eCommerce Naked Wines would not exist. Its unique approach to selling wine uses crowdfunding to involve customers in the production of wines from around the world.

“The crowdfunding model wouldn't be possible without the internet,” explains the MD of Naked Wines, Eamon Fitzgerald. “You just couldn't gather a large volume of people together to support a single producer and get their product out to market.”

And that’s what Fitzgerald believes is so special about Naked Wines' business model, which enables customers – or “Angels” as it calls them – to fund the production of high-quality wine up front, and in return have the option to buy bottles at a discount. 

A face behind every bottle 

“But I think the pixie dust is the human story where we connect customers with the wine makers,” adds Fitzgerald. “Unlike in the supermarket where you have faceless rows of wines and you can only make a decision based on the price, at Naked there's a human story behind every single bottle, with a face on the website, and if you're unsure about anything you can talk to them yourself.”

He explains: “The two most important people in the wine industry are the customer and the wine maker and they're the two people getting screwed – customer is drinking crap wine, the wine maker is struggling to make a living.”

Fitzgerald says the company has some very strong human stories to share. One he tells Essential Retail is a wine maker in the South of France whose winery was vandalised resulting in the loss of half of her business. She wasn’t a client of Naked Wines, but the business got in touch to see if it could help. “Her neighbours rallied around and gave her some wine to make and we gave her our Angels as a customer.”

Naked Wines launched a special appeal to its customers via email and in 24 hours, 2,500 people raised £20,000 to support the French wine maker, whose business is now up and running again. 

Fitzgerald explains this would not have been possible without eCommerce. “2,500 people were part of that story, who didn't know each other, who can now go to the dinner party on a Saturday night, put down the bottle, and say: ‘I made this possible’  that's true crowdfunding.”

He says crowdfunding is a term which has become trendy in recent years, but Naked Wines has been using it before the inception of Kickstarter. “And it’s the idea of a human story, which is far more powerful than a discount, low price or shiny label.”

Fitzgerald says millennials are especially proud to say they are an Angel supporting small independent wine makers. 

“Our customers tend to be consumers with a conscious, people who like buying their coffee from an independent roaster, who like going to the farmers' market at the weekend, and like to know where their products are coming from and a face to what they're buying,” explains Fitzgerald. “They like to feel good about what they're doing, and they’re happy to spend a little bit extra to get the quality.”

Another one of his human stories, is one about a South African wine maker who ran out of funds to support her soup kitchen project. Naked Wines asked its Angels if they would give up their lunch for one day to fund the soup kitchen, and after a single email the business raised £60,000.

“And the crazy thing is, in South Africa it costs £20 to feed a child breakfast and lunch in school for an entire year – it’s incredible we're feeding 3,000 kids in a very difficult area for a whole year.”

Email is a clear winner to engage with Naked Wine Angels, who tend to be online savvy, younger than the traditional wine customer and 60% female. The e-tailer uses Adestra to get its message about various crowdfunding opportunities out to its customers.

Meanwhile, on its own website it offers a rich social experience, where customers can talk to each other and wine merchants can tell their stories and post photos of their vineyards. “We step right out of the way and let the customers and winemakers to interact” adds Fitzgerald. 

Fitzgerald says stores is not part of Naked Wine’s strategy – although its recent acquisition by Majestic means customers can choose to collect their orders from its 214 stores around the country. This is one of the few involvements from Majestic, who seem to have bought Naked Wines to absorb its technical capabilities, rather than interfere with a business which last year took £100 million in revenue. 

Fitzgerald describes how the biggest challenge is recreating wine tasting online. “We do an annual tasting tour where we fly over 40 of our wine makers from all over the world and go and see 5,000 people over the country across ten days, they've been talking to each other, drinking their wine, the energy in that room when the two meet is incredible. When it comes to stores you can offer an experience, but it's not really part of our strategy, we can do it all online.”

In-house social media

Its independent social media hub is Naked Wine’s effort to recreate this experience. Fitzgerald describes how the e-tailer chose to start its own community rather than use Facebook, so it can stay in control. 

“And a typical customer may not be as confident talking about wine on a social platform, but put them in an environment with other wine lovers and similar people, they're more than happy to talk,” he says. “It’s a bit old-school with groups and boards and every Angel has a profile so you can see how much of a taste bud match you are, that’s quite cool, it humanises recommendations and is a very rich interactive experience.”

As with the rest of the eCommerce site, the social media platform is all built in house by its technology team of 30 people, at its headquarters in Norwich, which is about to expand as Majestic is planning to integrate its IT team in the near future. 

“There’s 140 of us at Naked Wines in total, but we’re all wine-loving techies at heart,” says Fitzgerald, who was poached by the CEO after writing a wine blog while working in management consulting at Accenture. 

The fulfilment challenge

While the wine market is currently booming, with sales of prosecco topping the charts, as well as the popularity of New Zealand’s Sauvignon Blanc and Germany’s Riesling grapes, another challenge for Naked Wines is fulfilment and creating a delivery service that suits customers, not the business. Its delivery proposition is next day as standard if you order by 7pm and free for over £80, and the business hopes to offer more options for customers in the coming months.

Naked Wines has been working with Yodel for the last two years, which was around the time the carrier was in the press for all the wrong reasons. Fitzgerald was quick to say the vendor has smartened up its act and he is very happy with them, but he acknowledges when things do go wrong with delivery, the retailer needs to take ownership and not blame the courier firm. 

“On the rare occasion when there's a screw up, we take ownership and sort it out with Yodel afterwards. Yodel is our front of house – they drop off the wine at the final mile, it's a partnership.”

And it's this partnership approach which is the ethos of Naked Wines. And when it comes to competition, businesses usually have to be ruthless to get ahead, but Fitzgerald points out that supermarkets dominate 87% of the wine market, and the average, uninspiring bottle costs £5.50. “Ours is £8 and we can give a lot more quality and we treat our suppliers well and don't trample on anyone along the way,” he says. “The thing I love about the business the most, is you can create an amazing business by being nice to people.”