Posted on | May 26, 2015
Written by | Jeff Siegel
A study of back label terms vs. consumer perception holds clues for retail merchant strategy.
Wine back labels are famous for their faux pas, whether it’s bad translation, illegibly small text or over-the-top winespeak. In this, retailers are often as much in the dark as consumers; how are you supposed to explain post-Parker descriptors or Lifestyles of the Rich and Famous adjectives to someone who wants to buy a $9.99 Merlot?
That may be about to change, though, thanks to a Harvard PhD student named Mark Thornton. His recent on-line paper, “Buying Wine from the Back Label: Using Data to Decipher Winemakers’ Language,” took information from 75,000 wines in the Wine.com inventory, and compared what was written on their back labels with ratings from the site’s users and from wine critics. His findings found a correlation between certain terms and perceived quality, with wines with certain words getting consistently higher marks than wines with other words.
“I don’t know that I was surprised about the difference in back label terms and quality,” says Thornton, “but I was surprised at the relationship between certain words and whether consumers and critics thought they were quality wines. Several patterns did emerge, and there were particular differences in perceived quality between the consumers and the professionals.”
Thornton says his research is only the beginning, and remains far from complete. Among the questions that need to be answered: Is the Wine.com database representative of wine that’s available at retail in the rest of the country, so that any conclusions from this study would apply to other retailers? Is the Wine.com customer demographic similarly representative of wine drinkers in general? And do the consumer and critic ratings, which have long been criticized for being too subjective to be meaningful, skew the results? Is there a better way to measure perceived quality? Finally, what’s the correlation between Thornton’s research and sales?
PARSING THE NUMBERS
Having said all of that, the study still gives retailers a leg up in moving past back label confusion. “The thing about this kind of information is that it would help me sell wine,” says Chris Keel, who owns Put a Cork In It, a boutique shop in Fort Worth, TX. “If I knew the wines that consumers liked, based on the back label information, then I would be able to use that information more effectively.”
Among the most interesting findings:
–Restaurant food pairings or terms like pasta appear on the labels of the lowest-rated wines. Thornton says this may well be because the wine doesn’t have any wine-like qualities to recommend it.
–Words typically used to describe Sauvignon Blanc—grapefruit, herb, clean—are on the back labels of the critics’ lowest-rated white wines.
–A place name on the back label seems to indicate lower quality for white wine (more so then red), while “handcrafted” is often found on the back labels of highly rated wines. The fact that handcrafted, in terms of wine production, has no legal meaning points to how little most consumers know about wine production and to the positive connotations the word has in general.
–For reds, “value” and “soft” are poor-quality words, while “powerful” and “black,” used to describe dark fruit, infer higher quality.
The study also tracked prices in terms of perceived quality, both for consumers and professionals. The consumer ratings were divided into five price ranges, and there was little difference in perceived quality between the first three ranges. In other words, the ratings suggested that consumers believe they get the most value buying the cheapest wine.
The critic price-value rankings were even more intriguing. The worst value came from wines that got scores in the mid-90s, even when wines in the high 90s cost less than the mid-90 wines; and the best value wines were around 90 points. Thornton says he isn’t quite sure why this is true, though it may have something to do with critic bias or the way the scores work.
PUTTING IT TO WORK
So how can retailers use this information? “Without knowing the exact relationship between sales and back label language, you’re not working with the best information,” says Dan Graham of the Dechert-Hampe retail consultancy in Southern California. “But you do have your sales data to work with, which would help.”
First, is there a correlation between higher-ranked back label wines and some of the wines you carry? Do your wines that have those words sell better than others? If so, then it might be time to feature those wines in an endcap or with shelf talkers that emphasize the back label language.
Second, consider doing a “If you like this wine, you’ll enjoy this wine” promotion, comparing one of your wines to a highly-rated back label wine where your wine has the same back label language. The advantage? Marketing a wine that may not have a score or favorable reviews, which makes selling it that much more difficult.
Finally, says Keel, knowing the most popular back label language would allow him to write more efficient shelf talkers. He could emphasize the most accepted back label words while ignoring those that consumers saw as implying low quality. For example, if a red wine label had both negative words, like food pairings, and positive words like powerful, the shelf talker would emphasize its powerful qualities.
Having said that, and as Graham noted, more data can only help. The linkage between back label language and sales would be invaluable. One difficulty, though, is that much wine sales information is proprietary, and retailers and wine rating sites are reluctant to share it. Until then, this study reveals a variety of information most retailers don’t know and can use to better sell wine, which isn’t a bad tool to have.