‘A Good Bottle of Wine Is a Good Bottle of Wine'
Cork-popping wine sales driven by retailers' new focus on engaging consumers,
says U of G prof
BY REBECCA KENDALL
There's much more to a glass of wine than pouring and drinking, and LCBO retailers who have enhanced their sales and service offerings through innovative new pro- gramming have consumers lining up in droves to learn everything from how to cook with wine to how to select the proper bottle for an occasion.
All this hard work is paying off at the checkout counter with skyrocketing wine sales, according to a recent study by Prof. Joe Barth, Hospitality and Tourism Management.
For the past five years, the LCBO, a government-run entity that held a monopoly on the province's wine sales for many years, has been rebuilding and redesigning its stores to offer wine appreciation courses, tutored tastings and lifestyle events in a bid to engage customers and teach them about its products, says Barth, whose study is published in the International Journal of Wine Business Research.
He found that the new stores are selling more bottles of wine, the total sale per customer is greater and the average price per litre is higher compared with the old-style stores. These findings are consistent with what the LCBO has been claiming all along, he says.
Barth, who studies wine retailing and therefore excluded all other beverages from his study, notes that competitive pressure from the privately run Beer Store network, Ontario retail winery stores, U-Brews and U-Vints and cross-border shopping have played a role in the transformation of the LCBO stores.
“The old stores were quite attractive,” he says. “They had shelves and aisles and helpful, friendly staff, but in essence, you'd go only to shop. The new stores are quite different. They have tasting rooms and wine consultants, and some even have kitchens for demonstration cooking. This is proving to be a very smart business move.”
Although most Ontario communities, including Guelph, have a new-style store, some communities have both new and old, says Barth. He selected data from eight municipalities with old- and new-style stores and looked at the number of labour hours in each location and the revenue generated.
The study also found that the most efficient LCBO store ranked as highly as the top privately owned winery retailer, which suggests that the LCBO is working to keep customers happy and is not complacent in its role as a retailer, he says.
“Customers are coming in, they're browsing, they're learning about and exploring new wines, and they're buying better-quality products. Now they know how to read a label, and they know the difference between a $12 bottle and a $20 bottle other than the $8. This is quite a steep change for wine retailers.”
It's the labels affixed to wine bottles that are driving Barth's latest research, a study that examines how the design of a wine label can attract or repel buyers, specifically those between the ages of 19 and 25. Using prototypes of wine labels designed by his students, he believes his study will shed new light on what appeals to this young demographic of wine drinkers.
“The labels created by the students will compete against those of existing wines to see if they're effective. The labels are all designed to look real, but these products don't actually exist.”
From the cartoony to the classic, his students' labels will be put on full wine bottles and pitted against bottles produced by real wineries to see which are selected most frequently by young buyers.
“People often choose wines by their labels,” says Barth. “In a modern wine store, tasting becomes possible, but you can't taste everything at a wine sampling. Essentially you choose a wine based on the packaging, so you end up with very interesting strategies.”
So far, preliminary results show that his students' labels have been more successful in attracting young buyers than the real wine labels have, he says.
“What this tells us is that the existing labels are not particularly attractive to that target market segment. If wineries want to attract this market, they'd better start selling each brand using labels specifically geared to the groups they want to attract.”
Younger consumers are generally drawn to more creative labels, whereas older, more experienced wine drinkers seem to prefer a classic look, he says. Choice also depends on the occasion and the impression the customer wants to make.
“Although different groups of people choose their wines based on different visual factors, there's one thing they agree on: A good bottle of wine is a good bottle of wine.”