Majestic Wine
Earlier this year, the UK wine company Majestic agreed to sell off its retail stores to Fortress Investment Group for £95 million. The company is shifting its focus to its online subscription service Naked Wines, which it bought for £70 million in 2015. This sale, which is to be completed after Christmas 2019, will free up capital to be directed at Naked Wines and promote the evolution of Majestic towards online retail. Josh Lincoln, the managing director of Majestic, calls it a growing sector where wine sales in the £8 - £15 range are growing faster than cheaper wines. In light of Majestic's increasing focus on their online presence, I decided to scrape their website for data on pricing and customer satisfaction to see if I could glean anything from their business model.
Having scraped their website using Selenium, I found initial exploratory data analysis added weight to the managing director's statement about sales in the £8 - £15 range. This density plot shows that Majestic is clearly targeting that market. If we look at the average price of bottles grouped by wine type, rosé is cheaper than red and white wine and, unsurprisingly, dessert and fortified wine is the most expensive of them all. It is quite misleading to look at average pricing, though, as it's heavily skewed by a minority of very expensive wines; density plots are more reliable. The following density plot illustrates the price distribution of red and white wines. There is a sharper peak in the proportion of white wines around the £11 or £12 mark than red wines which are slightly more expensive.
Majestic offers its own descriptions of wine styles. As a result I was able to segment them into groups and compare prices to ratings. For example, red wines are split into three groups: Fruity Reds, Smooth Reds and Big Reds. If one judges on price, one would expect the most expensive wines to be reviewed best. Big Reds would then be top-ranked as the bottles are on average £5 more expensive than Smooth Reds. In reality, though, Smooth Reds are the most popular.
Likewise, in the case of white wines, the most expensive Rich White is out-reviewed by the much cheaper Fruity White, suggesting that customers may not possess such sophisticated palettes as those at Majestic in charge of pricing!
Finally, perhaps the most interesting discovery was how much a cork increases the price. Majestic's target market isn't a customer looking for fine wines to store in a cellar for sixty years but looking for wines that are ready to be drunk. So there's no real need for a cork except to pander to those who expect one. But if it gives Majestic extra leeway to hike up prices, then it's a worthwhile pricing strategy.
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