Naked Wines and Ryanair : Rethinking the whole Value Chain and Leveraging on Digital

In UK, Online retailer Naked Wines announced at London wine Fair it was launching a scheme to put winemakers directly in touch with wine drinkers. In fact, what Naked Wines are doing is about changing a business model that has been successful over the last decades or more. Naked Wines want to be the low cost wine provider for all customers who want to drink wines at an affordable price. Affordable or more precisely at a more adequate price as an increasing range of the population is complaining, sometimes feeling "ripped off" and having difficulties to find good values.

So what Naked wines decided to doin UK is just simple as that: Rethinking the entire value chain of the wine selling business with a new point of view. Through its online marketplace, winemakers will be able to pitch their wines direct to the company's 150,000 members at a price the producers decide. For example, they may offer to sell a £20 wine for £15 a bottle, provided 1,000 people buy a case.To keep costs down, Naked Wines will take just 10% of the commission compared with the usual 40% or more. This is exactly what "rethinking the value chain" means: Rethinking margins on wine sales, mark-ups; Reconsidering the impact of increased pricing transparency and fierce international competition; Innovating with affiliate marketing, online promotion plans...To make it short, rethinking the way we are currently buying/selling wine.

With this new approach, consumers and wine producers are put at first in terms of priority. To make it work, Naked Wines have to make sure these people gain dramatically from this new value chain. Wine producers should get higher margins than they get in their current day to day operations and buyers should get a better offer & price. Rethinking the whole value chain is not new. Many businesses which started a few years ago from scratch have built their success on this approach. Naked wines may dream about being the Ryanair of the wine business in UK. It will take some time to understand how successful Naked Wines will be, but both companies leverage on the same platform to make it real: The Digital World.