How does a $230 billion company with thousands of products bundled under dozens of brands connect with billions of customers on an individual basis? Today, hundreds of mobile apps is used. But Athina Kaniura, PepsiCo’s chief strategy and transformation officer, has a digital transformation plan that will build a customized direct-to-consumer for PepsiCo, reducing that number to what she calls one.
According to eMarketer, direct-to-consumer is a product sales channel that will be worth $213 billion by next year and is growing at nearly 17% annually. For Nike alone, through Nike Direct he will generate approximately $19 billion in revenue in 2022, and other big brands want a piece of this growing and highly profitable pie. Among them is PepsiCo, which currently ranks 46th on the Fortune 500 list.
“We’re talking about billions of consumers who engage with us,” Canioura told me at the recent Web Summit in Lisbon. “So what we’re trying to do, and what we’ve been trying to do especially over the last two years, is, can we bring all of this together into one consumer data platform?”
This consumer data platform enhances engagement and interaction with end customers through localized apps that serve the company’s entire product portfolio. The goal is customer convenience, cross-selling and up-selling Pepsi, and centralizing loyalty points and rewards programs.
But PepsiCo is a much more complex company than that, and Mr. Caniola hasn’t built a traditional direct-to-consumer model.
Going full-scale into D2C would not only jeopardize Pepsi’s relationships with local bottlers, distributors, and retailers; It would be virtually impossible to carry out.
The app therefore provides access to PepsiCo’s entire product portfolio, but distribution is primarily through its existing go-to-market network. However, the purpose of this app is to be your single point of contact with businesses for loyalty benefits, complete product selection, and direct and immediate connectivity.
“If you go to an online provider, for example Amazon, you’ll find a curated portfolio of PepsiCo, but you won’t find all of PepsiCo’s SKUs,” Kaniura said. “If you go to a Walmart or Carrefour store, you’ll find the core brands, but you won’t find all the PepsiCo brands.”
Therefore, for PepsiCo, direct-to-consumer is about presenting customers with a wide selection of products that they may not find in one particular store, but may be available in another. (This also gives retailers an incentive to offer more PepsiCo products, making them a recommended retailer when Pepsi fans are looking for new products.)
And while this is one place for loyalty benefits, which is important for a company that sponsors most of the big sports leagues and many of the world’s major music artists, the activation and awareness of Pepsi’s sponsorship, as well as We offer you the opportunity to participate in them.
Something of this scale, with so many distributor and retailer connections, doesn’t roll out globally overnight. It is now up and running in Mexico and will soon be up and running in Brazil, but in North America he will have to wait until sometime in 2024.
“So this is a connected, global D2C ecosystem, so there will be more cohesion when it comes to D2C applications, and you’ll see more commonalities in UI, UX, and service experiences,” Kanioura says. . “Now, if you go to another market, there will be another D2C application. We are trying to standardize that component and link it with a WMS system for fulfillment purposes and an inventory management system. Masu.”
Direct-to-consumer models allow businesses to strengthen their brands, deliver a unified customer experience, personalize services, improve customer loyalty and increase profitability, said e-commerce consultant Amit Samsuka. Helpful.
This trend is increasingly occurring in the food and beverage industry, which has been slow to embrace e-commerce thanks to existing large-scale distribution through brick-and-mortar stores. But that percentage has increased rapidly during COVID-19, to 67% in just a few months by one measure, and that increase is likely to continue and even increase. .
If so, PepsiCo would be in a position to ride the wave, installing one app at a time.