Can Coke Lure Germans With GetHappy?
After operating in Germany for 86 years, Coca-Cola has become something of a cultural touchstone in the country. A few hours after the Berlin Wall fell in 1989, red Coke trucks greeted citizens streaming in from the East. Coke has been a longtime sponsor of the country’s Bundesliga soccer league and supported last year’s World Cup champion national team. Now the iconic brand thinks it’s discovered another way to get German consumers to buy its fizzy drinks: an app to make it easier to order takeout or delivery from the neighborhood cafe or falafel shop.
Coca-Cola Erfrischungsgetränke, the company’s $2.35 billion German bottler and distributor, will start arming small restaurants and bakeries in more than 10 German cities with Coke’s “GetHappy” smartphone and tablet app, allowing their owners to better compete with larger, tech-savvy establishments. Restaurants can put menus online by keying in their information and prices or sending them to Coca-Cola to have them digitized for a fee. Eateries will pay Coke about $22 a month plus a percentage of sales for the ability to take digital orders for pickup and delivery, and reservations. Using technology from Salesforce.com, an earlier version of the app already lets Coke-carrying restaurants offer customers simple-to-manage digital loyalty card programs.
While the small establishments aren’t required to sell only Coke beverages through the app, Coca-Cola Erfrischungsgetränke is betting it’ll benefit handsomely from any increased revenue at these tiny accounts.
Coke soda shipments in Europe are flat so far this year. It wants to boost sales by taking charge of software and data management for low-tech restaurants that either don’t know about or don’t understand electronic ordering, says Ulrik Nehammer, the company’s CEO. The German soda industry “has been innovation-averse,” says Nehammer, a 23-year Coke executive. “Unlike Amazon and others who start digitally, in Germany, it’s a very traditional business. This is a shift that’s happening to us and our customers.”
Nehammer also is pushing mobile tech as a way for Erfrischungsgetränke to get more efficient. The company has equipped its 1,200 field salespeople with iPads and an app—also created with Salesforce.com—to help with inventory-taking at restaurants and stores, ensuring that coolers are stocked properly. “Restaurant ordering is one of the best uses of mobile, and it’s growing rapidly,” says Sucharita Mulpuru, an analyst at Forrester Research. Forrester predicts smartphone and tablet e-commerce in Europe, including retail and travel, will grow from about $71 billion this year to $154 billion by 2018.
Small restaurateurs view the app as a way to attract young, mobile-connected customers. “Coca-Cola already knows that many small businesses haven’t yet arrived in the digital era,” says Ingrid Hartges, managing director of the German Hotel and Restaurant Association, which represents more than 220,000 lodgings, eateries, ice cream shops, and caterers. “And now they have the opportunity to participate.”
Nehammer foresees “tens of thousands” of retail customers by the end of the year. “We can generate traffic to smaller dealers who are not digitally active,” he says. “If you get more customers into the shop, buying more than they did before, you make more money. Sometimes we forget that business is that simple.”
The bottom line: Coca-Cola is betting it can boost soda sales by offering small eateries inexpensive mobile ordering apps.