Nick Devlin, CEO, Naked Wines
1. What is the greatest opportunity for your business?
Naked Wines was founded with the belief the wine industry could be better and our mission is to disrupt it for the benefit of our customers, winemakers and our people. Put simply, too many consumers are paying too much for mediocre wine made by big multinationals…and at the same time some of the most talented and passionate winemakers you ever meet are stuck in a corporate run unable to find funding or distribution for their personal passion wines.
Undoubtedly COVID-19 has accelerated the rate at which consumers have discovered Naked. But I firmly believe the biggest opportunity for us is to harness the increased size of community we have built over the last year to drive greater change in the way wine is produced and sold.
With 12 years of data under our belt, a well-capitalised and now a global community of over 750k wine lovers we are in the position to support talented winemakers make wines that supermarkets aren’t willing to back. That’s what gets our team out of bed each day and it’s what is at the heart of what makes Naked special.
2.What is the biggest challenge to your business?
Initially, we have to work harder convincing customers of the viability and value on offer through direct-to-consumer channels. Our winemakers make wines that are exclusive to Naked so they are not the typical labels which a potential new customer would see at their local store. We have implemented initiatives like ‘Wine Genie’ which help customers explore different wines in our range that are similar to those they have already tried and rated well. Once customers trial our service, they can see the benefit through the convenience of having wine delivered to their door, the quality of wine they are getting at cheaper prices than elsewhere, and through the community where they can follow and chat to the passionate people who make the wine they enjoy.
As our brand and business model has become more recognised, we have been able to attract big-name winemakers, such as Jesse Katz and Tom Rinaldi. Winemakers of this calibre will only add to the strength of the brand and drive greater awareness amongst winemakers and consumers. We’re excited about some of the new ranges we are working on and will be able to supply customers with soon.
3.With the benefit of hindsight what would you have done differently so far?
If you’d have given me a crystal ball back in March 2020, we would have committed more heavily to the 2020 harvest around the world. At the time COVID-19 emerged we were making commitments to winemakers for the northern hemisphere harvest. We saw a mixed picture, with a surge in demand immediately but a risk that macro-economic uncertainly would feed through to lower rates of customer retention in the medium term.
If I had the time again, I would have had more confidence in the power of our differentiated model. Every month since April 2020 we have seen improvements in customer retention as more people see the value in our model: great value, convenience but most importantly a real connection to an artisan behind each wine. We’ve worked closely with our winemakers (almost daily at times) over the last 10 months, but right now I’d love to be sitting on a bigger pool of amazing wines to share with the world.
4.What is the future of the physical store and the high street?
I believe physical locations will always have a role to play; certainly, in a specialist category such as wine. The challenge is that imagining the right store environment and indeed retail portfolio today involves being willing to step outside the bounds of what has traditionally defined retail. It’s often the small, independents who are getting innovation right – benefiting from being unburdened by the challenge of managing an existing retail portfolio. In the wine category I’d highlight a couple of my old locals in Islington (London) as doing many things well: The Sampler for extending it’s in store tasting range to over 80 wines and Highbury Vintners for its excellent tasting and events programme.
In short, retail needs to offer more than just excellent product. The environment, service and experience should be a pleasure…now with a product like wine you wouldn’t think that should be so hard…but somehow it often seems so!
5.What technology-related plans have you got for the next 12 months?
At Naked technology is core to everything we do. From machine learning to understand the customers we are recruiting and helping us to source new customers, to enhancing the initiatives we offer our Angels.
Our pipeline for the next year reflects a mixture of responding to the challenges of rapid growth alongside our perennial obsession: how can we better connect wine drinkers to the wines they will love most!
In terms of that connection, we will be working on:
Better leveraging real-time data to offer new customers a more curated wine experience that helps them discover the right parts of the Naked range
Building out our latest subscription initiatives such as ‘Wine Genie’ which drive higher rates of customer retention and incremental value. These use data from customers to select wines which they will like and ship them out.
After a year in which we have almost doubled the size of the business automation and efficiency are key themes. In 2021 we expect to be:
Implementing further automation to support scale efficiencies, such as warehouse operations and customer service.
Looking at the tools we use to power buying, supplier collaboration and end-to-end inventory management
6.What other retailers/brands do you admire?
Whilst the team at Naked will tell you I am a die-hard wine lover, my background is in general retail and I often find myself looking further afield for inspiration. Two businesses that I admire and think the wine industry can learn from are Stitch Fix and HelloFresh.
I think Stitch Fix have really understood that the power of data and recommendation algorithms is enhanced when it is paired with a human element through their stylist model. I think that is incredibly smart and shows a real understanding of how humans make decisions and how you build credibility.
HelloFresh has been written about extensively, but for me an underappreciated part of the success story has been the focus on getting the supply chain right (especially in the USA). That is something we are working hard here at Naked as well. Yes, moving big packages long distances is expensive, but more than that, your supply chain and its accuracy controls the one physical interaction you have as a DTC brand with your consumer so getting it right is critical.
7.Who would you place in the Top 25 Movers & Shakers in Retail?
I’m a massive fan of James Watt and the team at BrewDog. I think they have done a fantastic job of keeping clarity around the soul and purpose of an organisation as they have scaled…and have done a great job of bringing that culture through to their retail locations (their bars!). Through an extremely challenging year they have kept a focus on what makes them different and have been pushing the wider industry in areas like sustainability. He’s also got one of the few LinkedIn feeds that is actually worth reading!