Online Shopping Taking a Toll on Coca Cola, CEO Explains

Digital marketing is quickly taking over the world, with the United States alone spending a total of $6.8 billion on different formats of digital media in 2015. This new world of digital media challenges small business owners to fight for visibility online, but it looks like now one large global brand is facing some challenges as well.

Coca-Cola is the world’s most popular soft drink. In almost every country of the world, it is common to see Coke’s iconic red and white label on dinner tables, in fast food restaurants, and peeping out of backpacks and purses. But Coca-Cola Co. CEO James Quincey is saying that Coke is suffering as a result of the digital age.

However, the reasons for this recession are quite different than what Coke executives originally expected. It all has to do with the rise and popularity of online shopping.

Since worldwide consumers are spending more time shopping for clothes online and skipping trips to the local mall, no one is grabbing a Coke at the food court anymore. And as a result, Coke isn’t on the minds of consumers anymore.

“Digital is changing the way you behave,” Quincey explains to Bloomberg. “It affects other categories that are not the primary reason you thought about making the shopping trip.”

For perspective, global sales have caused Coca-Cola’s stock to decline 4.9% within the past year.

Who knew not stopping to grab fries and a Coke at the food court could be such a detrimental change for this 131-year-old soda powerhouse?

Quincey just took over as CEO of Coca-Cola Co. on May 1, and with the digital age in mind, he sure has an uphill battle to climb. While 46% of shoppers say that a website’s design is their number one criterion for determining the credibility of a company, Coke is such a widespread global brand it doesn’t have to worry about its image. Rather, they need to worry about recent backlash about sugary soft drinks and the health impacts they have with constant consumption.

For example, in a way to become more competitive in the ever-growing food market, more grocery chains have added the benefit of delivering groceries to consumers doorsteps. So for health conscious buyers, they aren’t tempted with the soft drink aisle in their supermarket.

As a way to stay competitive and to show consumers Coke can appeal to everyone, the soda giant has recently invested in the health conscious brands of Suja Life and Aloe Gloe.

“Unless you’re adapting to the secondary effect, you can find — all of a sudden — weird and surprising changes happening to you,” Quincey said.

Additionally, the British CEO has some good ideas to get Coke bottles back in the hands of consumers. He has been using his previous experience as Chief Operating Officer to watch how the emerging digital world has impacted multiple different markets and is taking careful notes.

He first noticed a dip in sales in China back in early 2016, when more noodle shops started to offer delivery. The glass bottles of Coke were either too large or too fragile to be delivered, so consumers were forgoing them all together. Because of this, Quincey is in talks about developing more easily transportable plastic bottles and containers that won’t cause such a hassle for little scooters.

The switch to plastic, easily recyclable containers is just a simple technique Quincey is using to modernize his 131-year-old company. And considering that 52% of people around the world make a purchase decision partially due to the fact that the packaging shows the brand making a positive social and environmental impact, this could be exactly what Coke needs to make a comeback.

And Quincey believes Coca-Cola will soon bounce back, as it is all about having the right mindset.

“Technology has provided lots of new ways to do things, and in the end, that displaces some work and some people,” he said. “You have to adapt.”

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