- Coca Cola Co. is encouraging small mom-and-pop retailers to use a mobile app that notifies the soda giant when the retailers need new product, according to the Wall Street Journal. The technology, which is being used in six countries including Chile and Vietnam, helps the company avoid lost sales and keeps its soda brands available on store shelves.
- Businesses use the app to send their inventory needs to local distributors, which bid on the deal. The distributors agree to a certain price and time period for delivery. Orders are filled in between 45 minutes to four hours, which compares to two or three days by traditional trucking.
- Alan Boehme, chief innovation officer for global IT at Coca-Cola, compared the process to the ride-hailing business models of Uber and Lyft. “There’s a mechanism that matches demand and supply in real-time,” he told the Journal.
Coca-Cola, PepsiCo and other soda manufacturers are watching as soda sales lag and consumers flock toward healthier, less sugary alternatives. They also are facing mounting pressure from taxes levied on soda purchases in Philadelphia and other cities that discourage purchases. For Coca-Cola, investing in teas, energy drinks and water have provided promising revenue streams, but the company remains largely dependent on soda, which represents 70% of all sales.
It remains to be seen how much more soda the Coca-Cola app will enable the company to sell, but if it can replenish empty shelves with a few cases of Coke here or Sprite there, it could add up. Investing in technology that allows a business to iron-out wrinkles in its supply chain can make it easier to get their product to the retailer when needed, ultimately boosting profits. Coke is no exception.
For small retailers, the benefits could be huge. Mom-and-pop businesses often have limited storage space to keep products until they need to restock empty shelves. In this case, a long delay in getting soda potentially means lost revenue for both the manufacturer and the retailer. If small businesses are able to devote less storage space to one item because they can reorder and receive product almost immediately, it might allow them to use that area for other products they sell.