Coca-Cola RGM Levers: Expand AI Retail Personalization & Adjust Price Pack Architecture
Coca-Cola’s latest RGM efforts include accelerating its digital B2B platforms for better tailoring of product, price, and packaging architecture, which are expected to reduce out of stocks and optimize physical inventory placement.
The consumer goods company is also expanding its coverage of these eB2B platforms and increasing personalization efforts to its retail customers. Early pilots indicate that Coca-Cola customers receiving push notifications written by artificial intelligence are more likely to purchase recommended SKUs, resulting in incremental retail sales, the company said.
“We're just scratching the surface of what's possible, but we're investing in digital capabilities now to expand our potential down the road,” said James Quincey, Coca-Cola Company CEO, on an earnings call.
Why This Matters: Digital Retail Relationships
There are currently 6.9 million customers connected to Coca-Cola’s B2B platforms. Having customers on these 24/7 platforms can enable more productive and lucrative relationships with both large and less-modern independent retailers. Once a more efficient relationship has been established, the CPG can layer on an AI component for greater personalization.
It’s a strategy that’s extending into Coca-Cola’s U.S. bottling partners, which are similarly investing in their digital capabilities throughout their supply chain and operations. A number of international bottlers have been working in coordination on an AI-supported B2B relationship over a platform that provides suggested purchase orders, said Quincey.
“There's a lot going on and there's a lot of connectivity among the bottlers on the enterprise software side because … [most] use a shared platform to get things done that's referred to internally as CONA. So there's a lot of investment on making sure the supply chain is as efficient as it can be and a lot of support from ecosystem partners to get it done.”
Pack Diversity Opportunities
Coca-Cola sees more opportunities to leverage greater packaging diversity in the United States, a marketplace that offers opportunity for more segmentation, said Quincey. This includes a range of can sizes and its new PET bottles made of recycled plastic.
“We're not capturing all the opportunities that are there, and the leveraging of greater pack diversity actually helps in an environment where, as you have in the U.S. at the moment, certain segments of consumers feel under disposable income pressure and would look for more affordable options,” said Quincey. “And yet, there are plenty of segments either in terms of their income or in terms of the channels they're going and spending in who are more disposed for premium options.”
Other regions, including Latin America and Europe, are successfully using more packages, he noted.
