/Insights/5 digital trends that are reshaping the wine industry

5digitaltrendsthatarereshapingthewineindustry

Nov 28, 2022

8 min. read

The centuries-old business of producing, distributing, marketing, and selling wine has changed dramatically with the adoption and proliferation of new digital technologies.

From IoT devices, to big data analytics platforms, to AI and machine learning algorithms, wine merchants now have access to a wide range of digital tools that can help lower costs, improve product quality, sell products in more locations, and better understand their customers.

For wine brands that have already been around for more than a decade, digital transformation is a critical step toward maintaining a competitive edge in the industry. However, many brands get stuck in the old ways of doing things, or simply lack the technical expertise and resources to effectively modernize certain elements of their business.

The first step in any successful digital transformation strategy is understanding the current trends and technologies out there, and how they can be applied to your business.

Here are 5 digital trends that are currently reshaping the wine industry:

Ecommerce for direct-to-consumer sales

Businesses across industries are investing in eCommerce to supplement their customer experience, and wineries—even the super old-fashioned ones—are no exception. Relying primarily on in-person sales, many wine brands have an outdated website, not enabled for eCommerce. However, there was a major shift within the industry in response to the COVID-19 lockdowns, when wineries were forced to modernize with a digital buying experience.

Today, the most successful wine companies sell products online directly to consumers on their website. Helping save a trip to the liquor store, modern D2C storefronts allow customers to browse and learn about different bottles of wine, add items to their cart, check out, and have the wine delivered to their front door. You can also collect and analyze user data from your online store to gain new insights into your customers’ wants and needs—but we’ll talk more about that later.

In addition to traditional D2C sales, most wineries need eCommerce functionality to support their wine club membership experience. This may require a separate and more complex portal, where users can create an account, log in, manage their subscription, make payments, check the status of orders, and so on—all without the help of a sales or customer support representative.

Other essential D2C sales channels are marketplaces like Amazon, Wine.com, and Drizly. And on the marketing side, your brand should routinely connect with customers via email and SMS, as well as on social media platforms like Facebook and Instagram.

So how do you effectively implement, manage, and optimize these disparate sales and marketing channels? The key is modernizing your legacy technology stack with custom and third-party solutions to centralize data, oversee the performance of various channels under a single roof, and ultimately achieve a truly omnichannel customer experience.

IoT for superior vineyard operations

Viticulture has seen incredible advancements due to the internet of things (IoT). By embedding smart sensors into vineyard operations, producers are able to:

Prevent diseases and pests: The wine industry loses billions of dollars in revenue every year because of invasive diseases and pests—and the traditional solution of applying pesticides to crops is often unreliable. Smart sensors will detect and communicate early warning signs of infected crops so that producers can intervene before any real damage is done.

Improve crop and soil quality: Air temperature, rainfall, solar radiation, and other environmental factors can be communicated to producers in real time via IoT technology. Access to this data results in superior crop management decisions, such as when and where to plant for the best possible yield.

Improve irrigation levels: Smart sensors can also measure and communicate the amount of water in the vines, allowing producers to optimize irrigation workflows, choose the best picking times, and react more efficiently to sudden spikes in rainfall.

Better monitor the aging process: Once the wine is in the bottle and stored in a cellar, IoT devices can be leveraged to monitor key factors in the aging process, such as light, humidity, and temperature.

IoT for vineyards enables streamlined workflows, a stronger yield, and a better-tasting end product. The implementation of smart sensors—along with an internal portal where data from these devices can be properly organized, analyzed, and reported—will help your winery lower its operational costs, improve processes with each yield, and ultimately sell more products.

AI and ML for automating tasks

With AI and ML technology, you can automate repetitive, time-consuming tasks across departments, from operations, to compliance, to sales and marketing.

Let’s go back to discussing IoT for a moment: When collecting massive amounts of data related to soil quality, wineries leverage AI bots to review the data, then identify and communicate any irregularities in real time. This helps producers stay on top of crop management, without having to manually analyze the data themselves—a task that’s not only time consuming, but also prone to human error.

When it comes to optimizing the eCommerce experience, AI and ML bots help match online shoppers to their perfect bottle of wine. After collecting a few pieces of information around the customers’ taste preferences, either through a product finder quiz, chatbot, or similar feature, AI bots will provide personalized product recommendations. This helps simplify the wine selection process—especially for beginners—in an environment where tasting is not an option. Plus, the customer data that’s collected in this process can be used for retargeting campaigns later down the line.

Real-time data analytics for smarter decision making

In a post COVID-19 world, wineries are relying on data more than ever to guide their strategies, from vineyard operations to sales and marketing. By collecting data from internal and external sources, wine brands better understand their customers and their surrounding market, which leads to smarter business goals and metrics moving forward.

With the right integrations, you can measure the performance of your website, from how much traffic it experiences over a given period of time, how many new—versus returning—customers it attracts, which pages get viewed the most, where users appear to get confused, and so on. From there, you can run tests to experiment with different page designs and discover insights that lead to higher engagement and conversion rates.

You can also leverage external sources with pooled data from other wine brands in your niche to acquire knowledge of market trends within different regions, different times of the year, and so on. This helps in defining consumer expectations and targeting specific customer personas, so that you can gradually sharpen your sales and marketing efforts over time.

E-labels & E-certificates for a paperless experience

Sustainability is a chief concern among today’s businesses and consumers, and the wine industry generates massive amounts of paper documents—whether it be for maintaining tax compliance or shipping across state lines. By replacing physical documentation with e-certificates, your business can not only help save the environment, but also reduce operational costs.

With e-labels, customers scan the barcode on a wine bottle and are directed to a page that provides all the information they would ever need to know about that particular wine. This may include a lengthier product description that couldn’t fit on the bottle, a video that shows how the wine was produced, additional information about the winery, and other content that helps make the customer more engaged. Plus, as a growing number of wineries ship D2C to multiple states and countries, e-labels are helping make their wine more traceable.

Get started with innovative digital solutions for your wine brand

When it comes to implementing the technologies discussed above, most wine businesses don’t know where to start. And like the process of making wine, there are many different approaches to digital transformation. What are the best solutions, given your brand’s unique goals and requirements? And how do you go about implementing, managing, and optimizing those solutions?

Here at Codal, we plan and execute digital transformation strategies for brands in the beverage alcohol industry, enabling them to sell more products, drive internal efficiencies, and expand their business to new territories.

Our team can help bring your winery online, develop an omnichannel customer experience, integrate IoT technology with your existing technology stack, promote smarter decision making and forecasting via data analytics, and more—all while maintaining compliance with federal and state regulations.

Industry

Retail & consumer goods

Topic

Strategy

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