Virgin Wines scraps delivery charges for Wine Bank customers

25 July, 2016

Virgin Wines is scrapping the £7.99 delivery charge for all Wine Bank customers in a bid to reward loyalty and recruit new shoppers.

Currently 60,000 wine lovers use the service, where they get £1 in interest for every £5 they add to their accounts, to be spent on wine from around the world.

The majority spend £25 a month and they are the retailer’s most loyal customers, accounting for around 70% of orders.

Virgin is therefore effectively giving up £7.99 on every order placed by its most valuable shoppers.

But it believes this will reward existing shoppers and encourage them to spend more, while it hopes to double the number of Wine Bank customers to 120,000 in the next year thanks to the news.

Virgin Wines chief executive Jay Wright told OLN: “I think this is the biggest thing we have done. Giving up £7.99 on every order from 60,000 of our most loyal customers is a pretty big financial turnaround for us. There is obviously a challenge in making sure we replace that by having more customers spending more and using us more often. We are pretty confident we can do that.

“I am determined to make Wine Bank the absolute best wine service for everybody in the UK.”

The retailer has conducted a large amount of customer insight research and found that speed and cost of delivery are among the most important considerations for them.

Wright said: “Our Wine Bank customers are our most loyal customers. They spend the most and stay with us the longest amount of time. We are always trying to think of how to add something of genuine value for them. Offering free next-day delivery as a standard service, forever, with no asterisk, does that. I don’t think there’s anybody else out there doing that. That £7.99 is like getting another bottle of wine.”

Wright hopes to win over shoppers that buy from online rivals that might be wooed by free next day delivery and 20% interest, and also from those that have never bought online due to delivery costs.

“We will be focused heavily on Wine Bank as part of our acquisition mechanic. It will be advertised very heavily,” he said. “We will be talking to as many people as possible, getting the word spread. Wine Bank customers are so much more active and they stay for so much longer. The economics, the metrics of a customer on Wine Bank compared to someone not on Wine Bank are so much higher and the profit we make from a Wine Bank customer funds the free delivery.”

Customers on Wine Bank spend anything from £15 to £60 a month.

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