How would you describe someone who buys their drink by mail
Discerning and knowledgable rather than closet alcoholics, according to
the trade. They are likely to be affluent and more interested in
convenience and service quality, or expensive rarities, than they are in
Little wonder that this desirable audience is being targeted by a number
of mail order operations.
Home delivery of booze has undergone numerous changes in demand and
supply that promise great potential and far greater choice for the
No official statistics exist on this market, but The Wine Society’s 1996
sales were around pounds 30m. Bordeaux Direct, which also runs The
Sunday Times Wine Club, claims sales of double that.
Add in Waitrose Wine Direct, Sainsbury’s Wine Direct, Oddbins’ direct
sales operation, specialist beer and spirits purveyors such as Scotland
Direct and several companies operating through the Internet, such as
Tesco’s Wine Select, and the market’s importance becomes clear.
In 1993, direct sales of wine totalled around pounds 70m in value.
Bordeaux Direct has seen a growth of 30% a year over the past five
years. In the same period, Oddbins’ database has grown tenfold to
Wine still makes up most of the market. For supermarkets, off-licences
and other major players wine still accounts for over 75% of direct
However, the structure of the home delivery market is changing as the UK
wine market moves towards maturity and as interest grows in premium
spirits and beers.
The UK wine market has been expanding by over 6% per annum in recent
years. A massive 95% of all wines sold are priced under pounds 3.89 a
bottle, with 85% of all wines sold in multiples such as supermarkets
costing less than pounds 4.
Having already cornered a large share of the volume market, supermarkets
have been late entrants into direct marketing - unlike The Wine Society,
founded in 1874. It is a co-operative society; members have to be
nominated for membership and pay a joining fee of pounds 20. Though
non-profit making, the society has a professional marketing operation,
offering mixed cases that are selected for you as part of a standing
order, as well as regular mailings and offers, storage and tasting
facilities, plus a collection point in France for members wishing to
avoid UK duties.
As the UK wine market matures, buyers are seeking more variety and
Greg Hodder, managing director of Bordeaux Direct, says: ’Supermarkets
are good at mass-produced wine. Our market is for people who want to
As the home delivery market grows, specialists like Oddbins and
Thresher, which sell 75% of their wine at over pounds 4, have moved in
to increase their share of the market. Oddbins offers a postal ordering
gift service, a sophisticated mailing strategy, and free local delivery.
Supermarkets have also moved in for a share. The mean price of wines
exclusively available through Waitrose Wine Direct, as opposed to
in-store, is pounds 11.76.
The entry of the national chains has occurred in parallel with a more
efficient service from the package delivery industry - a key reason for
growth in alcohol home delivery.
Another development is the Internet. Tesco Wine Select
(http://www.tesco.co.uk/wines/html) has a site aimed at those with
limited experience of buying wine, as does Waitrose Wine Direct and
Victoria Wine. Berry Bros & Rudd (http://www.berry-bros.co.uk) and
Direct Vintners (http://www.direct-vintners.co.uk) both have sites.
Home delivery is attractive to people in their mid 30s, particularly
households with a double income for whom time is a premium. Convenience
is a major selling factor. So, too, is having a wealth of information
about a complex and bewildering market explained in an accessible
Greg Hodder points out that wine is intimidating for many people and
there is a need to make the subject approachable. Bordeaux Direct’s
mailings take account of this, with background information explaining
why better wines need to be rested, and where to store them.
Together with convenience comes choice. Wines from The Wine Society and
Bordeaux Direct are not generally found in the shops. Scotland Direct is
a mail-order company with a number of branches, including Whisky
Connoisseur, Scottish Gourmet and the Great British Beer Club. Arthur
Bell, who founded the operation, says that, recently, demand profiles
have changed for Whisky Connoisseur, with a new emphasis on the
exclusive - over the pounds 100 mark - as well as the cheap and
Whisky Connoisseur’s offerings generally aren’t available in the shops,
while the Great British Beer Club offers ales and stouts exclusively
from breweries that mostly produce in quantities too small for national
Direct-order beer is relatively recent. Scotland Direct is nearly 25
years old, but the beer operation has not yet been operating for two
Still relatively small, the direct beer market is expected to grow as
consumers become used to the idea of home delivery.
Home delivery is an attractive business proposition. For specialist mail
order companies, it avoids investment in an expensive retail
Conversely, established retailers can plug gaps in their market. They
can also gain repeat business in a market not known for customer loyalty
and offer exclusive, more expensive, products unavailable in shops.
Home delivery attracts custom mostly through off-the-page
The press mix is often quality national media and specialist
The vast majority of business is repeat. The Wine Society, which never
advertises, enjoys considerable customer loyalty, with the customer base
expanding through word-of-mouth. Its mutual status is one reason -
prices are currently being cut because it made a bigger surplus than
needed last year.
A big advantage of direct selling is the opportunity for improved
targeting through careful database analysis. Tan Harrington, founder of
Mulcaster & Associates, a PR company specialising in the drinks
industry, points out that if you know your wine you will appreciate
being targeted. If you display specific tastes, you will like being
recommended new wines.
Home delivery companies employ sophisticated databases. CDMS undertakes
Superprofile analyses, and some coupon redemption levels reach 30% to
40%. A recent questionnaire for Oddbins attracted 30,000 responses from
a mailshot of 80,000.
For groups such as Oddbins, special offers in mailshots are more about
publicising discounts than growing home delivery operations. For more
specialist operations, price discounts are usually secondary to
targeting, though the targeting often takes the form of special
Majestic Wines has taken a number of innovative steps that have paid
off. A recent push involved mailing the 2000 highest spenders on their
database with an offer for first-growth clarets. They almost sold out
after four days.
With growth outstripping the alcohol market as a whole, direct marketing
of alcohol products is likely to become keenly contested, with the
development of a growing range of niche product areas. These will be
well suited to direct sales on the Internet, for which the heaviest
users have a similar profile to the keenest fans of alcohol via direct
Booze on tap, no. But booze on line? A very definite yes.
JOINING THE CLUB
- The Wine Society Order tel no: 01438 740 222
- Bordeaux Direct/The Sunday Times Club Order tel no: 0118 947 1144/
- Waitrose Wine Direct/Findlater Mackie Todd Order tel no: 0800 188
- Scotland Direct Order tel no: 0500 340 640.