Coca-Cola Looks to Google to Boost Retail Sales

Mar 15, 2017

Beverage giant Coca-Cola is using several Google technologies to power a digital signage system that it says is less expensive than existing systems while laying the groundwork for a better connection between Coke and its customers.

Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. Digital signage often appears at bus stops and in building lobbies. Some restaurants use these changeable signs to publicize specials.

But the price of these systems can add up—especially for a company like Coca-Cola, which sells beverages from its namesake soda brand to flavored energy water at thousands upon thousands of stores. The goal is to put interactive endcaps (retail industry jargon for signs at the ends of store aisles) in all those locations.

Digital menu boards can cost up to $40,000, said Greg Chambers, global group director of digital innovation for Coca-Cola (ko). "Four Best Buy TVs and a Honda Civic don't cost that much," he told Fortune.

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Chambers said he thought he could do better putting together his own system. Toward that end, he looked into several alternatives, ultimately cobbling together several Google technologies: the Chrome operating system, Chromebits (essentially "computers on a stick") to add processing power and connectivity to off-the-shelf display hardware, DoubleClick ad-serving software, and other Google Cloud Platform services (such as machine learning and BigQuery analytics) to get the most of the information collected.

Using all that, "we can produce a highly digital menu product at a fraction of the cost of current providers," Chambers told Fortune at the Google Cloud Next conference in San Francisco last week. The system has been rolled out in hundreds of stores, with more to come.

Google 

Initially, the computerized signs flash offers to passing shoppers with Android or iOS smartphones or tablets using Google's Eddystone wireless beacon technology. Eddystone, like rival Apple (aapl) iBeacon technology, communicates wirelessly with people's devices to send offers or coupons tailored to them—all based on what is purportedly anonymous information about them on their devices.

"When you walk by an endcap, you'll get an offer with no log-on. The shopper can keep moving," Chambers explained. "The interesting thing is that these offers lift the whole category. They not only mean the store sells more Coca-Cola, but more soft drinks in general."

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Over time, Chambers said he hopes the in-store implementations can also feed more information about sales and inventory levels back to Coca-Cola. But in the near term, he speculated that the company will more than earn its money back on each device within one year.

"This is all about driving a better customer experience in the store for Coke," Chambers said, adding it's important to get into these stores early to standardize the technology. "Because Coke uses third-party resellers for the most part to sell its product, it struggles with fragmented technology in different environments."

Rolling out this technology—which is available and works worldwide—is one way to prevent that from happening, Chambers said.

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