Coca-Cola Learns and Grows Via E-Commerce

Minneapolis — The Coca-Cola Co. entered the e-commerce channel in early 2013 and learned a lot in the ensuing 18 months about how to connect with e-commerce audiences. This evolution has put a new twist on Coca-Cola’s traditional marketing goal: to have Coke within an arm’s length of desire.“Our legacy is about trucks and getting to stores; e-commerce is a whole new experience,” said John Mount, vice president, commercial operations & marketing, during a Shopper Marketing Conference & Expo presentation in October. “There are a lot of physical barriers for us. A 24-pack of Coke cans is heavy, and the drones won’t be able to carry them to people’s houses,” he joked. But e-commerce growth is real, especially among Millennials.Coca-Cola has pinpointed five ways that changes in shopping dynamics require the brand to adapt:Shopper-led dialogue spins out product purchase (and consumption) to the consumer’s social networks.Personalization is growing, even for high-volume products.Digital data informs pricing.Mobile and social are part of the purchase: Marketers want people to buy the product, and then tweet about it.Integration of online and offline is more crucial than ever.The upshot, Mount said, is that brands must remain shopper-centric. “Using key insights, we want to give consumers a great user experience.”To tap those insights, according to co-presenter Jennifer Brevick, Coca-Cola’s director of e-commerce, the e-commerce team began with syndicated research to understand the channel: How big is it, where is it going, what percent of e-commerce is grocery, what percent is beverage, and who are the major players?Then the team developed proprietary research to understand shoppers, beginning with panel research on e-commerce across four groups: those buying groceries online today; those buying groceries who buy beverages online; prospects (those not buying groceries online now but are open to it); and “no way” (those not open to the idea of buying groceries online).Coca-Cola found that young, affluent males are the most common online shopper. But that’s not the manufacturer’s target audience for e-commerce; the target is “Shopper Mom,” who fits the “prospects” category. “The early adopters are shopping online right now, but right around the corner is Shopper Mom, stocking up for the household,” Brevick said.The next step for insights was to network, internally – especially in Europe and Asia, where e-commerce is more mature – and with non-compete CPG partners whose e-commerce business is more established.Overall, the biggest lessons Coca-Cola has learned are:You can’t afford to not be on the shopping list. E-commerce “favorites” lists populate the shopping basket based on past purchases. In Europe, 84% of the time that Coke is in a basket, it’s from the favorites list. Coke can get on the “favorites” list by sampling (free, full-size package automatically affixes the product to the list), or as an ingredient for a meal such as “lasagna night” (ingredients are automatically included on the list).Blanket fixes don’t usually work. E-retailers have about seven different delivery systems for brand images. It’s tough to update all seven delivery systems when Coke changes a brand’s graphics. The key is flexible fixes, not blanket revisions.This is not brick-and-mortar. European colleagues told the U.S. team not to take its brick-and-mortar store and upload it. The shopper is different, and wants different items (especially hard-to-find flavors) and shops in a different mindset. That makes it crucial to review brick-and-mortar insights through a different filter.E-commerce often is the opposite of expectation. Coke had one product that sold poorly in stores. “We thought it might sell well online, so we tested it in a small quantity,” Brevick said. “It’s now our third-biggest seller online.”There’s always more to learn. New formats are coming up all the time, such as concierge formats like Google Shop Express. There are also new delivery methods (drones!) and new ways to mine, then act on data.Braced with its learnings, Coca-Cola is working now to unify the way its brands are represented online, with consistent high-quality graphics across all platforms, Mount said.

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