Ask a wine pro about valuable real estate, and they might start talking about vineyard land in high-priced Napa, or historically significant Burgundy, or even off-the-radar Tasmania.

But if you're an entrepreneur in the wine industry, you're more likely to talk about a different kind of real estate altogether, that is, the front and back labels of the bottle. The reason? It's pretty simple: consumers buy wine with their eyes, which makes the look, style, and general appeal of your wine of the utmost importance.

Visual merchandising is critical for wine retailers and the wineries that they position on their shelves, and it's a differentiator for the online marketplace as well. Here are three strategies that digital entrepreneurs from other industries can apply, straight from the wine world's version of "valuable real estate."

Visual Storytelling, Guts and All

Most wine storytelling is telling the beautiful story, like drone video from some of the world's most picturesque landscapes or photoshopped table settings with the perfect wine poured into perfectly-shapped glasses. But, particularly because online merchandising is so inherently visual, there is also a call for the whole story, guts and all. That drone video can just as well be shot over a vineyard that's just been devastated by hail, and that tablescape can just as well reflect the reality of an everyday Tuesday night's thrown-together dinner.

It is all part of a complete visual narrative that, for most of its history in wine, has veered toward the beautiful and aspirational but can now also more organically include the reality of everyday life. Both situations are opportunities for the rich content of visual merchandising in wine, including "celebrity influencers targeting sub- and micro-segments of our customer base," said Zac Brandenberg, CEO and co-founder of DRINKS, operator of a direct-to-consumer (DTC) platform for wine properties in the US, including Martha Stewart Wine Co. One of the big consumer benefits of DTC businesses is that "they get to get 'closer' to the product itself, and with wine being so experiential, that's a critical value to add."

Tweaking the Recommendation Algorithm

Online sales of wine incorporate recommendation algorithms, and utilize machine learning, just like online sales of books or cars or clothing. Unlike with books, however, where consumers can sample a chapter or two before buying, shoppers can't taste wines on a store shelf or on their screens.

It takes some tweaking when you're trying to optimize wine recommendations based on what makes someone choose one bottle over another when they haven't tasted either wine yet, Brandenberg said. It's about connecting a product graph with a customer graph: DRINKS' technology links attributes like packaging shape and modern versus traditional label design, which helps "inform our product graph, which we then overlay onto a customer graph to make logical connections of what wine a particular shopper would be most inclined to buy."

Solving for the Last Mile

It's clear that consumers who shop online want a significantly easier experience than shopping for wine at a grocery store. "Customers tell us that they don't want to sort through pages upon pages of wines," Brandenberg said. "They want to be directed to great wines right away." That's tricky to do, however, when purchasing access to literally tens of thousands of wines is just a few clicks away.

That's when personalizing the experience matters, when online retailers can put the top 15-20 bottles that a shopper is more likely to buy in front of them right away, Brandenberg said, instead of displaying a non-personalized selection of wine. "Then we make the shopping process quicker, easier, and ultimately increase consumers' likelihood to purchase."

It's tricky enough, but now online retailers face one more hurdle that brick-and-mortar stores do not: the last mile. In a traditional store, consumers simply walk out the door and carry the wine home. In the online space for wine, logistics (that is, having to sign in person for an alcohol delivery), freight and "last mile rates" has long been a bone of contention and frankly obstacles to purchase.

"We are working hard to break down every barrier to online wine buying," Brandenberg said. "In the past year, we've partnered with FedEx to deliver wine to 10,000 local pickup locations nationwide at no additional cost. This makes it easy for anyone to get wine delivered, even if you're at work and can't sign for a daytime delivery."

Published on: Jun 25, 2018