Coca-Cola’s DTC ecommerce operation in Chile bubbles up 500% in 2020
From a mouth-watering elixir served in 1886 in downtown Atlanta to the world’s largest nonalcoholic beverage company – that’s the journey of the Coca-Cola Company and its iconic brands beloved by billions of soft drink aficionados. Throughout time, Coca-Cola and its partners made sure to sell not just products, but an experience. And the miCoca-Cola.cl direct-to-consumer (DTC) ecommerce operation in Chile certainly fits the bill.
Customer insights, the effervescence of DTC
Since 1946, Coca-Cola Andina has been a Chilean bottling partner of the Coca-Cola Company, manufacturing and supplying Coke and other beverages to numerous retailers across the country. However, many decades later, Coca-Cola Andina found itself between a rock and hard place when it came to knowing what end-consumers desire: the Coca-Cola Company could only advise from a global, faraway standpoint, whereas supermarkets had full control over touchpoints with the buyers. As a bottler, Coca-Cola Andina didn’t have first-hand customer insights to leverage on the local market – so it set out to acquire them with a DTC ecommerce operation.
Going the DTC route was highly feasible because Coca-Cola Andina already had a robust distribution operation that it could use for a lightning-fast last-mile delivery process. Moreover, setting up a digital store freed Coca-Cola Andina from any potential investment in a brick-and-mortar presence and even offered more detailed insights than in a traditional environment, not to mention full control over the branding experience. Thanks to the multiple advantages of DTC, it comes as no surprise that the business model has been increasingly adopted by CPG brands worldwide, propelling it towards phenomenal growth.
Thus, Coca-Cola Andina quickly partnered with Ecomsur and VTEX. After a three-month implementation process, it launched miCoca-Cola.cl in December 2016. In the beginning, the site served only a few areas in the Santiago region, but as delivery locations increased and promotional alliances with partners were made, so did the number of customers.
“We knew that we had a strong and reliable service that we wanted people to try out. And we knew that when people tried our service, they were going to come back.”Daniel López, Ecommerce Manager at Coca-Cola Andina
miCoca-Cola.cl, a one-stop-shop for parties
Nonetheless, in 2019, after growing 20 times compared to 2017 figures, miCoca-Cola.cl reached a point of saturation. Sales remained constant yet modest, despite a fully-functional website with a healthy conversion rate and loyal customers. Something had to change in order for miCoca-Cola.cl to continue to evolve.
“In 2019, the site was like a Ferrari, greatly engineered and sturdy – but no one was driving it anywhere. So we set really ambitious goals in order to grow.”Daniel López, Ecommerce Manager at Coca-Cola Andina
One of the first changes in strategy was diversifying the store’s portfolio through buying inventory of other brands and taking care of the fulfillment process. First addition? Alcohol – after all, some spirits go way better with a bit of Coke. Coca-Cola Andina made a network-wide distribution partnership with Capel, the main producer of the highly popular Chilean brandy type called Pisco, and started selling Pisco & Coke bundles online in a clever move that was bound to appeal to party people. It then brought on board Diageo (Johnnie Walker, Tanqueray, Cîroc, etc.) and, in 2020, AB InBev (Stella Artois, Corona, Budweiser, Beck’s, etc.).
Next addition? Snacks and sweets. Last addition? Merch items – branded glasses, mini-coolers, t-shirts, etc. Slowly but surely, miCoca-Cola.cl offered anything you could possibly want for a great party or get-together, delivered straight to your door in 24 hours.
“Our website went from only selling the Coca-Cola portfolio to a website that had a wider variety of products. We could sell anything that logically complements Coca-Cola – alcohol, snacks – but it has to have the requirement that it doesn’t weigh down our operation.”Daniel López, Ecommerce Manager at Coca-Cola Andina
In parallel, Coca-Cola Andina revved up its customer acquisition techniques for its DTC ecommerce. It offered free shipping and promotions and struck even more corporate alliances to get to more Chileans. The cherry on the cake – or the ice in the Coke, if you wish – was the new attention devoted to returnable bottles, which is at the origin of over 50% of miCoca-Cola.cl’s orders.
Scaling a DTC ecommerce operation in the middle of a pandemic
For 2020, Coca-Cola Andina set its eyes upon an aggressive YoY growth rate of 250% for miCoca-Cola.cl, but no one could anticipate the frenzy on the horizon.
When the COVID-19 pandemic hit mid-March, the company could immediately see how events were about to unfold: people would stay in-doors and they would heavily rely on online shopping. That meant orders on miCoca-Cola.cl would skyrocket. This scenario presented a double-edged challenge for the operation: matching the increase in demand while upholding a quick delivery and a great service for old and new customers alike.
Since the DTC ecommerce operation was on its way to being scaled that year anyway, Coca-Cola Andina knew what it had to do next – it just needed to speed things up. Significantly.
“We already had that growth mindset and we had the plans and the team ready. Coronavirus only accelerated everything: what we wanted to achieve by December, we had to do as early as April.”Daniel López, Ecommerce Manager at Coca-Cola Andina
The decision was well worth the risk. miCoca-Cola.cl tripled up its daily orders in a week’s span. It limited the amount of daily scheduled deliveries and, soon enough, its next-day delivery promise became a 10-day delivery promise.
“At that point, we had two options: grow our operation in order to take down that promise from 10 to maybe five days really quickly; or deliver to the people scheduled over nine days quicker than they expected, in order to shorten the distance to our usual 24-hour delivery period before offering more space to new customers.”Daniel López, Ecommerce Manager at Coca-Cola Andina
Unbeknownst to customers, the operation was expanding and streamlining. For instance, the website temporarily stopped promotions for single units and instead promoted master packs, incentivizing customers to choose items that would not slow down the operation. With a few tricks here and there and with a close collaboration between the commercial and logistics teams, miCoca-Cola.cl started to increase its delivery capacity.
After a few weeks of trial and error, everything stabilized, allowing the DTC website to grow in a business-as-usual fashion. In the end, miCoca-Cola.cl grew in 2020 500% compared to 2019, crowning the Chilean DTC ecommerce operation as the most successful digital store in the Coca-Cola system worldwide.
“Most Chilean companies reached their sales peak between June and July, at the height of quarantine. But we kept scoring record sales up to November 2020, which had a Cyber event. December was next in line as our second best month.”Daniel López, Ecommerce Manager at Coca-Cola Andina
Taste the feeling of success
After the massive triumph it has experienced since 2019, Coca-Cola Andina is looking towards the future, hoping to expand miCoca-Cola.cl even further.
“We are trying to understand what our maximum potential is. Two years ago, the site was a tiny project that wanted to get in touch with the customers in a really soft way. But we know that we are not even halfway to where we could be.”Daniel López, Ecommerce Manager at Coca-Cola Andina
However, managing a DTC ecommerce operation of this size brings new challenges. Coca-Cola Andina is stepping up its (digital) marketing strategies for miCoca-Cola.cl, finding innovative ways to entice customers (e.g. cocktail recipes, bottle personalization, gift cards) and, of course, further integrating its traditional and ecommerce operations.
“We can’t rely on what used to work, it’s a different business now. But we’re not afraid of trying.”Daniel López, Ecommerce Manager at Coca-Cola Andina
Until the future arrives, though, here’s a toast to Coca-Cola Andina for daring to refresh the world – digitally! And cheers to a 4-year collaboration with Ecomsur and VTEX that made it pop from a technological perspective.
“A lot of the things that we desire can easily be done on the VTEX platform and, for the rest, VTEX and Ecomsur find solutions and workarounds to our pain points. I know you listen to us, so we are more than happy with the service we have.”Daniel López, Ecommerce Manager at Coca-Cola Andina