Naked Wine: Churn

What was the biggest reason angels churned, in the UK?

I think there are a couple of things. Obviously, with any subscription business, you get a lot of churn in the first two months. That is really that sieve effect of just trying to find the people who are looking for a regular online wine service, as opposed to, I’m just here to buy cheap wine for a party or as a one off. Once you get over that, it tended to be a bad delivery experience. As I said, you can’t get wine delivered to work, normally, because you can’t carry it home. It really has to be home delivered. There is a bunch of people who have tried it and if you live in a block of flats and it has to get left outside your door if you’re not in, that’s not a great experience. We were very focused on trying to improve that delivery experience and really monitoring it and being proactive when it went wrong. But there were some people for whom it just didn’t work.

How did it go wrong, for example?

In the world of online delivery, the average Yodel guy is doing 130 deliveries a day. It’s more difficult with anything that is complicated for them, which is waiting at the bottom of the flats, go the whole way up the flats, they’re not in; can I leave this in the post room of the flats? It’s marked as Naked Wines and it’s pretty obvious what it is. We used to say the best delivery is a detached house, where I can drive onto the driveway and hide the wine behind a plant pot or behind the back or something like that. That really worked. It just didn’t really work where it was a lot more visible than that. That is understandable. It’s a shame, but that’s the nature of it.

So I think there is the delivery experience part of it and we did a lot to improve that. The stats were pretty good on it, in terms of successful deliveries, but you’re always going to lose some customers because of that. I think the other one is that people get out of the habit a bit. There are a lot of people on that margin between, is the supermarket good enough for me or do I want to go and do this online thing and have a different and more involved experience? It was really key that they got it as a product. There would have been a bit of that wavering, where you see customers who buy a big Christmas order, every year, but maybe we don’t see them at any other time of the year. Similarly, you see people that go through circumstances where they cut back on their wine purchasing; January being a classic example, where everyone tries to get a bit healthier and you lose some people there.

Do they cut off their angel deposits during January?

Yes, just because they are thinking, 2021 is going to be the year. After a year of being inside, drinking away the Covid blues, 2021 is going to be the year when I’m going to get out and do more. There is just change in habits and things like that. I wouldn’t say that there is a huge number that you lose to a competing wine service, especially if they’ve got a Naked model. You probably just lose them to other factors.

Which obviously provides a great opportunity for Naked to improve the experience, the delivery, the UI and the experience on the side, to actually increase retention?