How I set up an online wine business

Naked Wines foundersAfter a successful career with Virgin, Rowan Gormley decided to start his own venture and, with 17 like-minded friends, he set up Naked Wines — a new online wine business that allows the customers to call the shots. Rachel Miller reports

A long association with Richard Branson has given Rowan Gormley a taste for entrepreneurship. Rowan set up Virgin Direct (now Virgin Money) in 1995 and was the brains behind the launch of the One Account. He went on to set up Virgin Wines.

Eventually, Virgin Wines was sold and in August 2008, Rowan — and 17 colleagues — moved on. The plan was to set up a new type of online wine retailer.

“We started work at the beginning of October and launched Naked Wines on the 1st of December 2008,” he reveals. “I had the luxury of working with a group of people I knew extremely well. We sat down under a tree in my garden on a beautiful sunny day. We started with a clean sheet of paper and straight away we had a clear picture of what we wanted to do differently.”

Championing small wine makers

First of all, Rowan wanted to offer wines that were priced like supermarket wines but offered a far superior quality. “To do this, we wanted to champion small wine makers who are fantastic at producing wine but not so good at marketing themselves. So we were dealing with guys that were passionate about what they do but quite frankly needed help to sell their products.”

In order to do this, small producers are funded by Naked Wine customers - known as 'Naked Angels'. Each angel saves £20 per month into the fund which is used by Naked Wines to support small, independent growers and producers. The 'angels' can then use the money they have saved into the scheme to purchase wine from those producers at any time and at heavily discounted rates.

The second point of difference was to aim at normal people who don’t necessarily know about wine. “We wanted our customers to be able to choose wines with confidence based on what other people like them thought. And it’s absolutely transparent, good and bad, it’s all there. That’s why we’re called Naked Wines.”

Finally, Rowan wanted to beat his rivals on service by offering delivery that was both cheaper and faster. So Naked Wines offers next day delivery of a case of wine for £4.99.

A difficult time to launch

Any business launching in December 2008 faced a huge challenge as the after-shocks of the banking crisis were being felt everywhere. However, Rowan and his colleagues pressed ahead. “It was extremely tough but there are good things about launching in a recession.”

One advantage was that Rowan was able to team up with some extremely strong partners who were looking to offer something extra to their customer base, including BT, BBC Good Food and Jamie Oliver.

Getting Jamie Oliver on board

“Jamie Oliver had been thinking a lot about wine and how it’s the fifth course that everyone forgets,” says Rowan. “A lot of people put huge energy into making fantastic food and the wine is an after-thought. We wanted to talk about matching wine with food but take the nonsense out of it. Jamie also liked the idea of supporting small wine-makers.

“It’s deeper than just an endorsement. Over time, every recipe on JamieOliver.com will have a wine match. Part of the idea is to make people see that wine doesn’t have to be complicated and they can cook what’s in season and match the wine to the food.”

Identifying the customer base

Finding partners has been at the heart of the company’s marketing strategy. “We’ve tried to find partners that can deliver the audience we are aiming at.”

So who is the typical Naked Wines customer? There are two main types, says Rowan. “One is people that are interested in food but don’t have a clue about wine and this is mainly a female-dominated group but not exclusively. The second audience is male-dominated and is people that want to buy wine that is a bit interesting and different. They tend to be early adopters.

“We are very close to our customers,” says Rowan. “We get customers to choose the wines. A group of 50 customers will go to a tasting and they’ll come up with a final list of ten and then they tell us what they think they are worth. What’s good about the process is that it gives you a true market value.”

Customer feedback is driving the business, from reviews of wines to chat about recipes. “The fantastic thing is we can come up with an idea and have it live so quickly,” says Rowan. “If it feels right we do it and then we look at customer reaction — if it is met with indifference then we stop but if they like it we evolve it, based on their feedback.”

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