How new technologies are revolutionising wine distribution

Tuesday October 09 2018 by Sharon Nagel

Richard Ellison explains how newcomer Wanderlust differs from existing e-tailer models.

Challenging acclaimed success stories like Naked Wines, online retailer Wanderlust is seeking to introduce British consumers to wines that rarely leave their country of origin, using cutting-edge technologies. Its founder Richard Ellison explains how it differs from existing models.


A technology-reliant model

Former banker turned wine enthusiast, Richard Ellison ended up in the world of wine, ironically, because of the financial crisis. After in-depth training in wine, he stumbled upon a promising niche to launch his business. “I had travelled to more than 70 countries and always brought back bottles of wine from these places. These are wines from regions that you can’t source in the UK, so I began wondering why I couldn’t get access to them and import them myself”. A decade ago, prohibitive infrastructure needs would have pulled the plug on the project. Technological advances, though, have allowed Wanderlust to develop a fully automated, scalable model. “The evolution of application programming interface (API) technology has now made it possible to do this. When someone presses the button order on Monday morning, that stock is picked, put by the door, the courier is automatically booked, he picks it up at 4pm and it’s delivered the morning after. A text message is sent out to inform customers of delivery and they can control deliveries using a text message. If people order one hundred bottles or a thousand bottles, it doesn’t cost us any more, which is why our model is more scalable than those of the big players. In their case, it involves ten times the amount of work for their staff”.


Storytelling, yes, but not just any story

By outsourcing certain services, Wanderlust delivers to restaurants within 24 hours and even offers a one-hour delivery service to consumers in London, called “wine on demand”. "One of our customer profiles is young families. Mum or Dad can’t find time to go out looking for wine, they have children at home but like wine. They want somewhere where they can shop online and get it delivered to their door. They have people around and want to be able to introduce them to some good Sauvignon blanc or Prosecco and talk about the stories of the producers”. The stories themselves must be out of the ordinary – the tale of the grandfather who founded the estate will have difficulty finding an audience. “Our Champagne – ironically called Barnier, the Brexit wine, which is a story in itself – has vines that pre-date World War 1 and they are still producing fruit with incredible depth and complexity. Our Prosecco is made by Italy’s gold medal-winning canoeist and the great-grandfather of our latest South African producer found the largest diamond that man has ever known, sold it to the Queen and it’s now in the Queen’s crown!”


Meeting the needs of young consumers

The selection criteria used by Richard Ellison are designed not only to control prices in this highly competitive market, but also to meet increasingly pressing and precise consumer demands. The range consists of small producers involved in sustainable development - particularly through organic wines - and prices are controlled thanks to the absence of middle men. “That enables us to ensure the best price for the consumer, the restaurateur and the producer. In some ways, we have a fair trade agreement with the producers.” The convenience and speed of the services, the opportunity for customers to find unknown, boutique gems and support small producers, as well as the emphasis on storytelling and the use of new technologies, are all factors that attract a young clientele. "Around 60% of our customer base is in the 25-45 age group, which is more skewed to younger consumers than say Berry Bros & Rudd or The Wine Society, whose portfolio would be more 45-65”.


Ambivalent consumers

The propensity of younger consumers to see themselves as the standard-bearers of fair trade and sustainable production has been widely documented. But do these concepts really translate into hard facts? “I think there are two camps. It’s a bit like Champagne socialists – people talk about it but then they’ll continue to shop with the person who’s doing it the wrong way. There is not enough transparency in the industry, the way, for instance, the supermarkets juggle with prices – the wine with 50% off that was never worth the full price in the first place, which makes consumers confused about what’s actually going on. So yes, people do want to support small businesses but they also want it to be like Amazon Prime and they want the internet experience to be optimised. Consumers expect you to have the money that the big guys have got and have the same offering and that’s what drives them back to the names they know”.


Social media in a transition phase

To ward off the competition, Richard Ellison intends to move more into an educational service, promoting learning, tasting and discovering and fostering engagement with his customers through a wine club. Boasting a few hundred members out of a total customer base totalling thousands, the club offers members the opportunity to pay a modest sum per week in order to receive a box of wine each quarter. “A lot of people want to buy more wine from us, they like our concept but just don’t have the time to log on and think about it. So they receive a seasonal, quarterly box to their door which is curated and comes with tasting notes and education. This is a great way to grow the user base of the business”. To secure greater awareness and expand his clientele, Richard Ellison also relies on social media – the required vehicle for a company geared to young consumers - but he remains doubtful about its real impact. “I think it’s the golden egg that nobody’s managed to find yet, the way of using social media for wine. To me it’s an advertising platform so we’ve tried paid advertising on social media – it’s done okay but hasn’t really worked. If it was working, I’d be pumping all my money into it. I think people continue to experiment with it as it becomes a platform for users. Everyone seems to think that everyone knows what social media is now, but I disagree. I think we’ve still got a long time to go before we really understand what it will do for brands. The world has gone from text, to photos to videos to a more interactive experience. At the moment, I think social media is in a bit of a transition period”.


Using big data judiciously

The winner of several major retailer awards, Richard Ellison sets greater store by the impact of these awards. "Awards help galvanise consumers when they come to the landing page, they give us credibility and an endorsement”. He also attaches a lot of importance to getting his website and e-commerce facilities right, and uses ‘big data’. “You can access lots of stats platforms that will give you lots of insight into your customers. One platform we use is hotjar on user experience which looks at the way internet users navigate around the website with their mouse. What do they click on? What does their journey look like? Rather than the traditional approach which is to look at Google Analytics and see how long they stay on our page for. It’s all about moving to the next level and using data in a way that drives better decisions about what you do next”. As a technology believer, Ellison claims that the constraints now imposed on the use of personal data are not so much an obstacle as a source of new opportunities. "I think people are going to have to raise their game about how they approach it because of all the rules. I think people are going to have to think forward about what the data means to them and what they want to do with it. It’s about knowing the tools that will capture data and store it in a way that it can be used. I don’t think many people have thought that way before – it’s more about capturing e-mail addresses and getting on with it”. Whatever the case, Wanderlust offers a response to a number of current consumer demands and a densely-packed range of technological solutions to promote the distribution of wine. What remains to be seen is whether this type of model and its challenging promises can be sustainable over time, and whether consumers are ready to put their buying habits where their mouth is…


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