E-commerce marketplace set to reach US$6.8 trillion
The spate of high-profile dotcom failures in the past 18 months has done nothing to dampen the true potential of the web to revolutionise the way the beverage industry does business. Kelvin King investigates the future of e-commerce.
Few people in the beverage trade - whether producer, distributor, retailer or ingredients supplier - would take issue with the claim that the internet is changing the way we do business.
New e-business technologies are rapidly modifying almost all transactions, especially business to business (B2B) but also business to consumer (B2C). New technology applications are reinforcing existing competitive advantages creating even further benefits.
The value of Internet-based e-commerce will grow from US$5.7bn to a staggering US$6.8 trillion in 2004
Failure of over-hyped 'dotcom' enterprises has not been the setback that some commentators have portrayed either. Most of these were based on unrealistic expectations and poorly planned strategies, making headlines because of huge investment inputs and spectacular stockmarket crashes.
Over the next few years, the beverage industry will see a marked shift to e-business, notably e-procurement and systems such as Collaborative Planning, Forecasting and Replenishment (CPFR).
CPFR allows trading partners to share forecasts and data via the Internet, analysing the information and alerting everyone along the supply chain to situations that could affect delivery or sales performance.
One reputable international research company has predicted the value of Internet-based e-commerce will grow from US$5.7bn to a staggering US$6.8 trillion in 2004.
Are e-commerce and e-business interchangeable terms? Electronic commerce, which has been around for a long time in the form of EDI, is mostly seen as involving financial transactions. E-business is about business processes, from procurement to marketing, from information management to sales, from raw materials to human resources.
Typical of soft drinks producers who are addressing e-commerce holistically is Coca-Cola Amatil (CCA), the Asia-Pacific bottling group. Speaking to an economic development conference, David Kennedy managing director said e-business must be viewed in context of business strategy.
CCA's strategy is brand marketing; customer-centred culture; efficient product and service fulfilment. "There has traditionally been a trade-off between richness and reach in the delivery of information to our customers," he says.
"Quality information can be simultaneously delivered to an unlimited number of customers via a web-based portal."
CCA is a member of corProcure, an independent entity set up by some of Australia's largest companies to provide an online trading exchange.
has opened up multiple levels of online activity
Consumer websites have become the rule rather than exception for major soft drink brands. Several sites are massively appealing, with games, competitions and the opportunity to purchase or win branded merchandise. Application of Shockwave software has opened up multiple levels of online activity.
Grocery and specialist liquor retailers are renowned for their reluctance to comment definitively on product mix strategies, but anecdotally soft drinks are regarded as a core category by most online supermarkets.
A survey of supermarket-based retail purchasing websites shows that most deliver a broad choice of packaging variants and cover all key sub-categories (waters, carbonates, juices etc). There appears to be a skew towards major brands, possibly because some house brands are too price-sensitive to make online sales attractive except in larger volume packs. But house brands are widely available. The highly utilised Woolworths HomeShop in Australia, for instance, presents 'home brands' alongside the likes of Coca-Cola and Pepsi. Other chains separate their house brands, sometimes identifying them as such but often leaving it for the customer to judge.
Epicurious & BevMo websites
Lifestyle websites such as CondéNet Inc's www.epicurious.com feature soft drinks as thirst quenchers in punches, mocktails and alcohol-based cocktails. The global renaissance of cocktails, many incorporating soft drinks more creatively than as passive mixers, is also showing up on consumer food and beverage sites.
Premium soft drinks can also grab attention on some sites, for example BevMo.com. Leveraging its customer base in 20 US stores statewide, BevMo.com went live in January this year, using online direct marketing solutions from Digital Impact Inc.
BevMo.com aims to broaden the company's reach to those other US states, which currently allow alcoholic beverages to be purchased from out of state. Soft drinks are only a small factor in the mix ("3,000 wines, 1,200 spirits, 800 beers, 150 cigars, and thousands of specialty food items and accessories") but there are over 140 product choices, including the Coastal Fog 'family' of premium sodas (latest addition: ginger beer).
For real soft drink aficionados there's POP The Soda Shop (www.popsoda.com), which sells only soft drinks. It is worth visiting the site if only to see the breadth of choice that can be achieved credibly. Based in Scottsdale, Arizona, POP The Soda Shop's online operation is anchored on a storefront and open six days a week.
And then there's Harrod's. While this London retailer may not be interested in customers making basic soft drink purchases online, it is happy to offer stylish French white, pink and cloudy lemonade as part of its deluxe hamper. Price: a mere £5,000.
The European Beverage Consumption Manual 2001
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