Great brands are built upon the foundation of good products that sustain their value over the long term. These products achieve an iconic status, crossing generational boundaries with their appeal. Coca Cola is such an iconic brand, recognized throughout the world. For years, it was number one on Interbrand’s Top 100 Listing of Best Global Brands, but slipped to number three in 2013, after Apple and Google.
Great brands also develop and deploy devices that help them position products with consumers, some of which may also take on iconic stature. In the case of Coca Cola, its vending machines have succeeded in capturing consumer attention through great designs that augment and compliment the appeal of the product they house and dispense.
Since 1929, the development of Coca Cola vending machines to deploy products broadly in a manner that satisfies the immediate need of a consumer, to conveniently buy chilled refreshments, has been ongoing. Innovations have paralleled advancements in electro-mechanical technology, and have recently incorporated networked digital capabilities that have opened new opportunities to offer non-traditional products. These additional new revenue sources have expanded the value of vending machines. They have also turned the traditional “dumb, unconnected” device into a “smart, connected” device. It now sits firmly in the ecosystem of the Internet of Things. It is also a major player in the Internet of Soda.
(For a wonderful and quick pictorial tour of the evolution of the Coca Cola vending machine, click here and click through the photo set.)
The evolution of the device in conjunction with customer engagement experiments continues and can take on very intriguing forms. For this past Valentine’s Day, a virtual vending machine was created that would only appear when couples passed it. Here is the video. This is an example of the merger of point of sales entertainment and functionality that lends itself to social media exploitation.
Coca Cola vending machines have become ubiquitous. They, and competitors’ machines, are seemingly positioned everywhere, but in reality, their placement is contingent upon certain infrastructure requirements that enable the networked digital capabilities to function.
On an historical note, there is a story that places the origins of The Internet of Things to the efforts of some frustrated, thirsty computer students at Carnegie-Mellon University wanting to know the inventory level of their local Coke machine. In 1982, they wired up the Coke vending machine with microswitches to report on levels in the racks in the machine.
What are some of these capabilities? Let’s see what Coca Cola says. Coke has a B2B (business-to-business) segment, called CokeSolutions, which positions and deploys vending as a managed services opportunity. The business value that smart, connected vending machines can deliver are tied to interoperability with other smart devices that consumers use, such as their smart phones used as mobile wallets.
Coca-Cola has taken a strong infrastructure position with its latest smart machine, reportedly acquiring 16 million unique network IDs to use with its Freestyle vending machines as they deploy. A network ID for each machine is essential for network connectivity, giving each machine the ability to be identified in space (location) and time. Machine stock levels that automatically trigger replenishment orders, delivering third-party value offers to mobile wallets, and realtime test marketing are just some of the intended capabilities of networked vending machines.
Few consumers know that Coca-Cola positions it machines in quick-serve merchant venues, such as Burger King. Consider this a managed services business opportunity for Coke.
As I have written before, American brands including Coca-Cola and McDonalds have used Japan as a learning laboratory for the advancement of digital capabilities in its operations. In the case of Coke, it presently is experimenting with gamification to allow customers to bond more closely with hundreds of thousands of its vending machines.
Another ongoing experiment is the “peak shift” energy conservation vending machine which when more broadly applied in other countries will have an impact on smart city initiatives.
As early as 2005, in Japan, one could download ring tones from a Coke vending machine to a cellphone.
The most important development has been to synchronize the vending machine with the mobile wallet in the consumer’s smart phone. Coke machines in Japan had this capability since the early 2000s, built upon Sony’s contactless transaction chip, FeliCa. FeliCa was the dominant contactless format in Japan for the first decade of the 21st century.
In the U.S., the first significant deployment of contactless payment-enabled Coke vending machines was announced in 2006, based on MasterCard’s PayPass technology. This first effort was focused on taking a contactless payment for a Coke product in the vending machine.
Efforts to take advantage of contactless technology’s capabilities have broadened, with Coke’s “My Coke Rewards” becoming a digital part of the mobile wallet in smart phones equipped with a NFC-chip (Near Field Communication. A good example of this is the ISIS trial announced last year for deployment of its mobile wallet service in Austin, TX and Salt Lake City, UT. Coke has apparently benefited from this trial:
“Coca-Cola’s vending machines are among them. More than one-third of active Isis Mobile Wallet users in Austin have reportedly loaded a My Coke Rewards card into their wallet since the pilot began and 90% of them are new to the My Coke Rewards program.”
ISIS was formed by three of the four top wireless communications companies in the U.S. to promote smart phone payment services.
I have grown up with the Coca-Cola vending machine, from its days as a dumb, unconnected device to today’s smart, connected “Happiness Machine.” What I have witnesses is the transition of a simple device designed to keep a Coke product cold at the point of purchase to an entertainment engine that enhances the brand experience and delivers value offers—Coke’s and other merchants’—seamlessly to the consumer’s mobile wallet. It can do on the spot market testing, and self-manage inventory replenishment. It can sell and deliver non-beverage products to me.
And, yes, it still delivers a cold Diet Coke for me to enjoy on a hot summer’s day.
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