With more consumers starting to go online for their grocery needs, beverage maker Coca-Cola is beginning to move towards e-commerce in order to stay relevant.
The 131-year-old company announced its new approach towards innovation at its investor day earlier this month. The popular beverage maker originally relied on impulse buys and invested in eye-catching displays near the checkout isles of grocery stores and convenience stores. Now that more consumers are going online for basic necessities, the company identified a need for change in their sales tactics.
“A big piece of the business is going online, whether that is brick and mortar or whether it’s pure players like Amazon, so not being online means your brands are not being as relevant,” John Carroll, general manager and vice president of e-commerce for Coca-Cola North America, told Food Dive. “We’re following the consumer and where they’re going.”
Coca-Cola introduced its plan to partner with meal kit companies in order to offer coke as a pairing for their menu items. They will also be investing in a voice ordering system that suggests adding a Dasani water at the end of each order. When a consumer uses a locker to store his/her grocery orders, the individual can be prompted to buy a drink to go along with their food purchase as he/she gets closer to picking up the order – the drink can be added within two minutes or less.
The company is also working with its key customers, such as Walmart and Amazon, to find ways to incorporate their beverages in apps and online operations. The “digital shelf” allows manufacturers to display their products online in ways they could not do through traditional brick-and-mortar stores. It gives them the ability to promote the functional benefits of their products and educate consumers on their brand. The digital space allows companies to add more visual value to their goods and tempt customers through targeted offers.
Wells Fargo analyst, Bonnie Herzog, who upgraded Coca-Cola’s stock this month, had positive things to say about the company’s e-commerce initiatives.
“We were impressed with (Coca-Cola’s) increasing focus on positioning itself for the future through digital platforms and engagement,” she said in a recent report.
Although the company plans on taking this transition slowly, these new innovative changes will help Coca-Cola expand their consumer reach and prepare them for the growing e-commerce grocery industry.
“It is still early … our objective is testing, and learning and piloting,” Carroll said. “We expect this to grow very quickly. We’re not sure if we expect it to be the meal-kit industry or direct to consumers with our bottlers or the digital shelf, so we’re trying a lot of different things right now and try to understand what’s working and what we need to invest in the future.”