Naked Wines to test bricks and mortar in Australia

Luke Jecks, the chief executive of Naked Wines International, says any shopfront would not simply mimic the big retailers. Photo: James Brickwood
Luke Jecks, the chief executive of Naked Wines International, says any shopfront would not simply mimic the big retailers. Photo: James Brickwood

Online wine merchant Naked Wines is looking to old-fashioned bricks and mortar as it maps the best way to reach its rapidly expanding customer base.

The Australian arm of Naked Wines raises about $1.6 million a month from its network of 40,000 'angels' or customers and in the past year turnover has topped $30 million.

Naked Wines International chief executive Luke Jecks said the crowdfunded business was exploring how a shopfront would complement its online business and build on its service-centric model.

Australia will be the test market for this new concept which could then be rolled out to the Naked Wines operations in Britain and the US.

Mr Jecks says the challenge is creating a concept that complements  the Naked Wines online experience.

And he said the dominance of Coles and Woolies in Australia's wine market and the resultant focus on price represented an opportunity for a retailer brave enough to do something different.

He has an insider's understanding of big retail after working as the director of sales and marketing for Cellarmasters before Woolworths acquired it in 2011.

"At this stage we are not looking at geography as much as what would a bricks and mortar experience of Naked Wines be," Mr Jecks said.

"We don't want to replicate what's out there ... what's happened to wine is [the major retailers] have taken the inspiration out of it and made it all about price."

However he said British liquor retailer Majestic Wine's $137.6 million acquisition of the Naked Wines business in May had given it the chance to "think big" and join a growing number of successful online businesses now pushing back into traditional retail.

The Majestic deal put Mr Jecks in charge of Naked Wines' US and British operation as well as the Australian  business and fellow founder Rowan Gormley, who spearheaded the operation's offshore expansion, stepped into the chief executive role at Majestic.

Majestic is Britain's largest independent wine retailer and predominantly a bricks and mortar retailer but it's looking to snare a significant slice of the online market.

In Australia, Naked Wines is close to finalising a deal for a new distribution centre in Brisbane. Once this deal is completed it will have direct access to all of Australia's major capital cities, an important goal for a business determined to "reinvent wine delivery".

Overhauling the 'last mile' challenges of product delivery in Australia is a core focus for Mr Jecks and it's why the business has invested in a network of warehouses rather than a centralised hub.

"We are going to make the supply manager's life more difficult and keep our wine as close to our customers as possible," Mr Jecks said.

"And beyond warehouses we are looking at a whole lot of things around delivery, including click and collect and a couple of other ways to improve service."

Mr Jecks said Naked Wines had built its reputation on going the extra mile to get wine to customers and the entire team pulled together when necessary to overcome obstacles.

This customer focus was recognised last week when Naked Wines picked up the People's Choice Award at the StarTrack Online Retail Industry Awards.

Naked Wines has inhouse IT experience and it writes a lot of its own code  to ensure the systems are flexible enough to handle any customer requests.

The business is built on a crowdfunding model, which raises funds from its cohort of angels every month. These funds are invested in independent wine makers, who then agree to sell their product exclusively through the Naked Wine site at a substantial discount to retail prices

Mr Jecks said he had a waiting list of wine makers keen to be 'liberated' by Naked Wine's financial support and he planned to build the stable from 30 to 50 wine makers as quickly as possible.

It will require a 10,000 new sign-ups but Mr Jecks said angel numbers were doubling year-on-year as was turnover.

This story Naked Wines to test bricks and mortar in Australia first appeared on The Sydney Morning Herald.