In the early 1980s, Steve Jobs was trying to convince John Sculley, Pepsi’s former CEO, to join Apple. Job asked a question that sealed the deal: “Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?”
Fast forward to 2020. Sugar water still won’t change the world, but tech companies are no longer the only ones producing cutting-edge technical innovations.
This is the Coca-Cola freestyle machine. Most people who read this have used or at least seen one. The more I’ve used this machine over time, the more I’ve come to marvel over the achievement. Coca-Cola absolutely hit it out of the park with this one, improving every core business unit in the process.
This machine lets you combine over 200 flavors to create a drink that is all yours. We all love choice and personalization. But what we love even more is when those things are made easy for us to accomplish without screwing something up. And the freestyle gets this right. First, you narrow down what you want by your preferences on calories, caffeine, etc. Then, once you pick a base flavor like, say, Diet Coke, you can combine it with some but not all of the add-in flavors like cherry, vanilla, etc. This ensures we don’t take more than a few seconds to find the right drink, yet still end up with something that’s unique and meets Coca-Cola’s quality standards.
The customers of the freestyle are not the ones gulping down the drinks. They’re the restaurants and vendors selling the drinks. For them, this machine has a lot to offer in the form of:
- Exclusive beverages
- Streamlined inventory management
- Higher store traffic
The marketing opportunities with freestyle are incredible. First, Coca-Cola is able to attract eyeballs to its iconic red color and logo by consuming far more real estate than a traditional fountain. Then, there’s a ton of engagement with the brand once a consumer begins using the machine. And recently, an app has been introduced where people can build their own drinks, try them at the machine, and digitally share them with friends.
Higher consumer satisfaction and more marketing opportunities have a tendency to juice sales. So naturally, stores that install the freestyle machines, on average, experience an 8% uptick in beverage sales.
Analytics & Insights
But this is the real game changer. A machine as revolutionary as the freestyle does not exist merely to increase satisfaction and get a single percentage point increase in sales. No, it also streams data back to HQ constantly. And that data can be sliced and diced in all sorts of interesting ways such as by the base flavor, supplemental flavor, region, store, time of day, etc.
For example, consider a key insight related to caffeine-free Diet Coke. Before the freestyle, only 1% of stores sold this drink in normal fountains. But data revealed that when made widely available via the freestyle machine, the caffeine-free varient was in fact an extremely popular drink starting in the late afternoon. Surely, that will advise how and where this variant is sold in the future - even in those old school fountain and refrigerator inventories.
This one technological innovation singlehandedly:
- Increased consumer satisfaction
- Increased customer satisfaction
- Amped up marketing efforts
- Grew sales markedly, and
- Continues to provide Coca-Cola’s product and marketing groups with extremely valuable data
That’s amazing. And it’s exactly why I believe that every modern company has to be a tech company. Even the ones selling sugar water.