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Sign-of-the-times: Will the IoT strengthen consumer connections for even the most hallowed brands?

Posted by Alex Brisbourne on 07/10/2014
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CokeWay back when we first got into the M2M business, one of our most consistent predictions about where M2M would create business value (outside of traditional AVL and fleet telematics applications, of course) centered on the vending machine. We’ve long maintained that connected snack machines would one day become more “active” in the selling process via M2M. Examples run from the machine sending a coupon to a consumer’s Smartphone as they walk by, to dynamically adjusting the price of a can of soda in response to weather or current foot traffic.

We were not shocked, therefore, to pick up the June 25 edition of The Wall Street Journal and see an in-depth report on how Coca-Cola itself, the grand-daddy of the standalone vending channel, has turned to the Internet-of-Things (IoT) as a means to strengthen the brand’s appeal (and product sales) among retailers and consumers. What’s more telling, however, is why.

It seems a side-effect of our digital culture is an erosion of brand equity and loyalty. With technology in our hands that allows us to find the cheapest price on just about anything, and quickly, us consumers have drifted into a commodity-mentality towards almost anything we can buy. It could be said that items such as cars, airfare, jewelry, and especially impulse buys such as soda have all gone through a subtle, yet tangible, stripping away of brand value compared to just 10 years ago. So, as an Atlanta-based company it pains us to say it, but “Buying the World a Coke” just doesn’t carry the same cache as it once did.

To combat this new normal in commerce, Coke has been placing sensors on goods and in its vending machines to help track inventory and better maintain equipment; such live connections enable much more control over inventory levels, temperature and other environmental factors and can optimize delivery routes according to projected and historical usage patterns. This is all about business efficiency.

But Coke is also doing a number of new things to help forge better connections with its consumers. For starters, Coke Freestyle gives customers the ability to “mix” their personal flavors right at the machine. Moreover, it has been experimenting with Bluetooth beacon technologies, connected via the Internet-of-Things, so that the vending machine itself can offer discounts to customers participating in electronic loyalty programs. In other words, the machine sends a coupon to passers’-by phones, saying, "Here, press this button, have a Coke. (Not quite “on us,” but close).

Finally, the mega-bottler has integrated mobile sensors as a way to enhance its merchandizing efforts in retail establishments, which has improved product visibility and turnover rates over time. Sales reps can analyze factors such as shelf space availability, total store size, and merchandising displays and make on-the-fly adjustments to product mix and location based on momentary project velocity.

While the beverage industry is a granular example to be sure, the implications for other segments of the consumer goods markets, and for retailers themselves, range wide and far. Stay tuned for a future post exploring some of these developments.

Topics: General