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Why Coca-Cola Bet Big — And Early — On Mobile Pay

While mobile pay is far from mainstream, Coke’s Scott Ryan says it’s important for larger brands to help develop technologies that will one day become commonplace.

Last fall, The Coca-Cola Company faced an interesting mix of good and bad news in its attempts to market its decade-old low-calorie Coke Zero brand to Millennials.

The Atlanta bottler found that 85 percent of Millennials hadn’t tried Coke Zero. (That’s the bad news). But there was a huge upside: roughly half of Millennials who do try Coke Zero end up becoming monthly drinkers, said Scott Ryan, Coke’s VP, National Specialty Retail, during a presentation at the Retail Innovation Lounge during SxSW (full disclosure: GeoMarketing was a media partner in the event).

For Coke, the way to reach those 85 percent of Millennials is through the usual mix of social media, but also by using location to know how to direct those messages at the hyperlocal level, alongside traditional media, Ryan says, emphasizing that the company doesn’t view “digital” a single silver bullet.

Interestingly, he also pointed to Coke’s early bet on mobile payments as a key part of its marketing. And with 500 global brands under its corporate umbrella, Coke is the largest retailer in Apple Pay’s system.

In terms of the company’s “big bet” on mobile payments, last spring, Coke began prepping 100,000 vending machines that accepted Apple Pay.

Aside from offering clear convenience — many consumers don’t necessarily have exact change for $1.50 soda — and the immediacy that consumers increasingly expect from all retail interactions, the idea of mobile payments reflects deeper changes in the ways brands can connect directly with consumers, particularly when it comes to the value of rewards programs as a key engagement tool.

GeoMarketing: As a global brand with decades of iconic advertising behind it, how important is hyperlocal and geo-data for Coke’s marketing efforts?

Scott Ryan: It’s incredibly interesting as you start to leverage the data around specific places. If we’re doing any kind of affinity or royalty-type programs to understand the culture of different places, I can tell you based off clusters what products sell in what markets. Or brands spend a lot of time and effort to find who’s that core consumer and how their purchasing habits will play out over the course of, say, the next six months.

We always talk about marketing to Millennials, since they’re such an enormous group whose idea of specific brands is still being formed. And as digital natives, it makes sense to target interactive programs to them. But do those programs influence other marketing efforts that Coke does to other demos?

As you start to look at the power of different groups driven by different promotional strategies, tactics, campaigns, etc., it’s going to start to point to different targeting opportunities. So Millennials are very important. But there are other groups that play a very important role. We also look at the role of mom in the home, or the role of dad in the home. We also look at multicultural marketing and the roles within those groups.

And different products point to different tactics as well. If we’re looking at promoting a juice brand, that’s going to be a very different demographic for someone that we’re going to be looking to connect with. It might be around a trial, it might be around driving brand affinity. Or it might simply be around just driving sales.

When it comes to using location or proximity, does that tend to be for driving direct sales?

There’s a macro answer to that. Digital is not a silver bullet. Digital tech in general, the idea of exploring “innovation,” sits within sort of a promotional ecosystem. I will tell you that we are very much trying to be a digital -first company. When you go look at ad buys, we don’t buy exclusively television spots. It’s really about kind of this omnichannel media approach where everything is integrated.

Looking at mobile pay, why did Coke consider it important to align itself with, particularly at what most consider to be an early stage in that technology’s development?

As you start to look at other evolving and emerging technologies, it’s interesting to see the possibilities as we seek to evolve digitally as well.

Also, there is a certain iconography granted to you by being associated with the founding of a market. And as everyone’s talking about Apple Pay, Google Pay, Samsung Pay, whatever type of mechanism it is, we have to be prepared: how do we make sure that we’re continuing to address the business needs and opportunities of our customers?

When you look at the vending space, a lot of that work that we’re involved with there is driven by core fundamental issues: namely that fewer and fewer people have change in their pockets.

From that premise, we know that most people these days have a cell phone, a smartphone. Therefore, it’s we have to think about how we can use that as a tool to help improve that customer experience.

There’s definitely a lot of opportunities when you start talking about mobile pay. We’ve only seen the tip of the iceberg when it relates to beacons as well. It’ll be interesting to see what that evolution continues to look like over the next year.

And now for our GeoMarketing place-based personal question: What’s your favorite location?

I’d love to be sitting on the beach right now watching the waves come in, coconuts falling from palm trees, etc. But, I have say… this is not just because I happen to work there, but I do love the world of Coke. And the Coke plant in Atlanta is a number one tourist destination. People engage with the brands, they come to bring their kids. Yes, that’s my favorite location.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.