Cooler Leaders: Daphne Stopforth, Lucozade Ribena Suntory (LRS)

Nexo spoke with Daphne Stopforth, Chilled Solutions Manager at for Lucozade Ribena Suntory (LRS), about her experiences investing in connected coolers.

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Daphne, thank you very much for talking to us today. Perhaps we could start with you telling us a little bit about your role at LRS and what you are trying to achieve.

My job title is Chilled Solutions Manager for Lucozade Ribena Suntory (LRS); and I lead the team responsible for the equipment solutions that support the business in selling our drinks. One of my responsibilities is making sure that we have great solutions available for our Sales teams. This includes looking at innovation and how we can incorporate innovation to ensure our equipment solutions are best in class.

Everything that we do has to deliver return on investment (ROI), that’s a big focus for us. We have already introduced significant innovation into our vending estate and LRS is ahead of its key competitors with the vending solutions that we offer.

Now it’s time to turn our attention to chillers and how we can improve what we do there. ROI on chillers is very difficult to measure, primarily because there is less accessible data.

Our number one objective is to have a better understanding of our ROI, but we also need to understand how we can improve asset utilization through better knowledge of what is going on in the channels, in the locations of our chillers and inside the chiller itself.

Asset tracking is another significant factor. We know that we lose chillers, but we don’t fully understand the scale of this. Being able to understand this better is another advantage.

Are there particular hurdles for LRS that have driven you to investigate gathering this information from your chillers? What type of information do you feel is currently missing about the ROI from these chillers?

We simply can’t measure very much currently. There are certain locations where we can, such as where we receive EPOS data. For those we are able to measure the impact that a chiller has.

However, many of our chillers are in locations where we have no access to that type of data. It might be an independent convenience store, or perhaps a food service outlet, and there is no data available that enables us to measure impact.

Our only option, in these cases, is to work on assumptions to see whether or not we believe these chillers are going to meet our hurdle rates, and hope that we have it right.

This new solution will provide us with much better data. We can start to use actual data to help us determine which chillers are performing and which aren’t. We can then take action to improve underperforming chillers.

With vending, we’ve had telemetry data for about 10 years. We have an excellent handle on how our vending estate performs and we can take action to improve performance where we need to. This solution will help us move in the same direction with our chillers.

We’ve seen various different types of connected cooler solution deployed across the world. LRS have chosen to go for an ‘Always On’ solution combined with an image recognition solution. Can you tell us why you decided to take this approach and then perhaps discuss what you intend to do with that very rich set of information that you will have access to?

The image recognition piece, for me, is the critical part of the solution. Without it, there is still a significant amount of information, but the image recognition gives you so much more. You can literally see what is going on in the chiller.

Indicative rates of sale will give us a strong indication of how many bottles have been sold, but not which bottles those are. The ability to see exactly what is in that chiller tells us how compliant it is for our products, and therefore if it is actually LRS bottles being sold. Without it we could be making rate of sale assumptions based on sales that are not even from our products.

The camera solution doesn’t just give us the compliance and purity information. It also tells us how well stocked the chiller is, and interestingly it also provides an indication of the location of the chiller.

During the trial, we were able to identify that one of our chillers was in a store stock room. We could tell from the picture that it wasn’t on the shop floor, it was just being used as a back-up storage chiller! It’s actually quite amazing what you can find out from the images that come through.

The camera makes the quality of the information so much more robust. One of the things we haven’t seen yet, but have been told should be possible is the indicative rate of sale by SKU. This will be incredibly powerful, we are looking forward to seeing that.

Another significant aspect of the solution is the predictive breakdown element. One of our other key objectives is to drive ‘up time’ of the chiller. We are measuring up time now, but we can currently only measure it from when a customer phones in to tell us ‘my chiller has broken down’. What we don’t know is how long the chiller had been out of action before they picked up the phone. This solution will give us visibility of whether the chiller is working and whether there is any risk of break-down, in which case we can send somebody to attend to it straight away.

I am pretty sure that a chiller appearing in someone’s stock room is an all too painfully common story for many of our customers!

Considering that you are deploying quite a complex technical solution I would imagine that you have had to engage a range of stakeholders in the initiative. One of the more common problems our customers raise with us, is that they aren’t sure who to involve in deploying such a solution. What approach did you take to making sure that this solution had the support of everybody internally and what did it require?

This was a challenge, because there are so many people to involve and there are a number of aspects we had to consider. Internally within LRS, we initially engaged with the Sales teams and Finance.

For the Sales teams, we needed to demonstrate how the solution could help them do their jobs more effectively. We needed to get them excited about the innovation and technology, but also illustrate the potential pay-back, which is difficult to measure before the solution has been deployed.

I can’t, at this stage, say I am 100% certain what the pay back will be on this, but we created our model based on the trial and that was strong enough for us to put forward the case justifying the cost and to get sign off to move forward.

The Category and Shopper teams have also been involved, because they can see that they will get additional data to help them understand better what is going on in store. The Data & Analytics team are now getting fully involved too and thinking about how they can use the information.

The only other people we’ve engaged, at this point, are our external equipment partner. From a technical perspective they have a massive role to play in setting this up for us and managing the technical side, as well as getting the customer masterdata to Nexo and responding to some of the suite of alerts.

Once we are further along in the process and have more data, we’ll be able to share more with other parts of the business, such as Marketing, to see how it can help them too.

Because everyone is so busy, it can be difficult to get enough of everybody’s time to really get their engagement and their input. Even me, I have had so many different projects that, in hindsight, I didn’t give this as much time and focus as would have been ideal to move the project on as quickly as we could have. So time is probably the biggest challenge, but people in the business are very excited about this.

That moves us quite nicely onto another question. You have been on a considerable journey to get it to this stage. What do you know now about deploying this kind of solution that you didn’t when you started; that perhaps would be valuable for anyone setting out on their journey now?

This is definitely a question to ask me again in six months!

My initial thoughts are that I have found it more difficult than I thought it would be. I am not a technical person, so I think there has been something of a language barrier. I don’t speak ‘techy’! Some of the emails and documents have been quite technical and difficult to translate into layman’s terms.

We have found that retrofitting to our existing coolers is quite challenging and more costly than we had anticipated. As we move forward and buy new coolers this will be less of an issue, because the solution will be fitted at source.

Also, we are now at the stage where we are working through the implementation of the suite of alerts. Unfortunately, the solution doesn’t appear to be quite as flexible as we had been led to believe. Plus, the various Sales teams want different things. Consequently, conversations have turned more towards ‘We’ll have to check on how easy it is to do and what is involved in doing it’, rather than setting these up quickly and easily.

I’m afraid, in terms of what I didn’t know then, compared to what I know now, it’s mainly negatives. However, I think if you ask me six months from now, or in twelve months, then there will be more positives, because we’ll be so much further along the process, and more established, and may even be identifying things that we didn’t expect.

Whilst positives are nice to hear, your honest feedback is important to us, because then we know what we need to do to improve.

Let’s go back to a previous question, where you had finished by talking about the various teams that were going to be involved with the deployment, from Sales to Data & Analytics, to the Shopper teams, etc. There are obviously a wide range of uses where you can put the solution to work. Considering all the different teams, how do you intend to make the data work within the organization?

This is one of the things we have been looking at with the Data & Analytics team in particular; the best way to use and share the data. We don’t yet have a complete answer to this, but we know it will allow us to make better informed decisions to help shape our strategy.

Another thing we’re thinking about already is how we could use the whole solution in the future. We are already starting to think about how we can extend the use in subsequent phases, such as use of the i-Beacon and potentially adding further digital add-ons.

Let me wrap-up with a final question. You talked earlier about the business case not yet being realized, but that you have modelled it. I would be interested to know how you have dealt with those who are skeptical about rolling out this kind of solution. Would you have any advice to people who face negativity about deploying such a solution in their own organization?

In the overall context, the costs are not massive.  I believe the best option is to trial it, as we did with you. That way you soon get an idea of, or can at least model, an indicative business case.

I know we have spoken about it already, but the image recognition for me, is one of the key pieces – the visibility of the chiller and the contents of the chiller. The camera and the connectivity are an extra cost, but it’s cheaper than regularly sending someone to look at what is going on in that chiller. Simply modelling against that could demonstrate a saving. Although you still need people for follow-up actions, you can use your people resource more effectively by replacing some of what they do with these cameras and directing their activity based on the alerts.

Cooler Leaders: Karen Shevchenko, Carlsberg Croatia

Nexo spoke with Karen Shevchenko, Business Development Director at Carlsberg Croatia, about his experiences investing in connected coolers.

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Please tell us about your role at Carlsberg Croatia, and what you are trying to achieve.

My title is Business Development Director. I have key accounts reporting to me, but I mostly focus on business development- which means that my responsibility is to work on commercial efficiency projects. Anything that has the potential to help us to sell more, to generate more profit, or generate more value.

To name just a few projects: we have, for years, run value management; we looked at execution excellence, how we can improve our operations, and use the time in our sales trips more effectively, all with an aim to generate more value.

What are the challenges you face in achieving your objectives? What part do connected coolers play?

For a country like Croatia, coolers play a very important role, because first and foremost it’s a highly seasonal market. The index of the season versus the off-season can be one to five, or one to ten- meaning that, during the season, you sell ten times more than off-season. Of course, coolers play an important role in this regard because being able to provide a cold product during the hot summers here gives you a competitive edge. That is why all beer and beverage producers in Croatia invest a lot in their coolers.

Also, because Croatia is a highly tourist-driven market, with a population of four million, increased by 16-17 million tourists every year, you can imagine how much that affects the sales of any beverage. Our main objective is to understand how we can get maximum value out of the cooler, so it comes down to which outlets to place it in, and in what location in the outlet.

The biggest challenge we had in the past, working with standard coolers, is that we had very little idea how efficient the coolers actually are. We tried to guesstimate, using some assumptions, some empiric knowledge- but it was never a truly data-driven decision process. And this is where a connected cooler gives us an advantage.

The connected cooler allows us to see how the environment around the cooler changes, depending on where it is placed, and what we do with it. This is recorded using two simple metrics, foot traffic and door openings- which are good proxies to tell you whether the cooler is efficient or not, or whether the efficiency is going up or down depending on what you do with the cooler. This creates a wide field for decision taking, for now you can predict results depending on how you use your equipment.

Which stakeholders are involved in your project, and did you need to put any new capabilities in place?

I don’t think the stakeholders changed, pre- and post-Nexo; all of them are interested in the same point: using data to prove different hypotheses, or concepts, or ideas, circulating within three major functions.

Sales, interested in selling more using the coolers, and want to see the data to be able to manage the customers. Finance, interested in return on investments and want to get our assets working as efficiently as possible.

Marketing are interested the most in which brands or SKUs we put into the coolers. They fight for the planograms, to include certain SKUs; for Marketing, having a broader presence is important, whereas for Sales, a major task is to narrow it down and have fewer SKUs, and through that, increase efficiency.

To maintain a constructive discussion between all three functions, you need to operate credible data, to try to maximize your output on all three dimensions: volume (for Sales), value (for Finance), and assortment (for Marketing). With connected coolers, we receive an opportunity to have better understanding of how to manipulate these three dimensions efficiently. Therefore…

Rather than new capabilities, what changed was access to the credible data. We are still trying to answer the same questions; the only significant change that happens is that, where before you had to speculate – unless you had a specific market study – now you have access to specific data, through which you can take decisions.

A lot of companies ask us where they should integrate the data that comes from connected coolers into their business. What is your advice?

I think that Nexo, or data per se, is not a panacea- having more data is not going to solve your problems. It still comes down to capabilities, and the people that work with this data: develop entrepreneurial culture, train your people and they will take care of data, they will find the best way to use what they have at their hands to improve results. If you only invest into better data, it would be a waste of money to get a very powerful tool that you don’t know how to use.

How will you ultimately measure the success of the connected cooler program?

For us, Nexo data is a means to get to the final destination. Efficiency of the equipment is measured through sales per unit, and we use Nexo and other tools to achieve our sales targets.

The trick is, if you focus purely on Nexo, it becomes very difficult to measure its effect, because there are a lot of other factors in the market, affecting your final efficiency: competitors’ activities, weather, out-of-stocks situations, and others. You consider all of these to understand if you’re able to achieve your final target. Therefore, rather than focusing on small parts, we focus on the holistic view: are we getting there using all the tools we have, Nexo included?

I will give an analogy to demonstrate the concept. Take an artist: he needs to learn to mix pigments, prepare the canvas, to put the layers of paint on the canvas, wash his brushes – this is the learning process, this is how you build your people’s capabilities. You need time and experience. But when it comes to creating the masterpiece, you do not control how well the artist mixed the pigments – you look at the final result. But if you trained him well, he will be able to use his instruments to create the best possible results. The same with managing value – sometimes it is an art to create value using the resources you’ve got. And Nexo in this case, as an additional tool, can give you a bit more to work with.

Are there things you know now about deploying this kind of solution which you didn’t know when you started?

Certainly the things you need to take care of before you launch such solutions include: a) a clear understanding of how you will use the solution – having a pilot is highly recommended; b) a plan with clear roles and responsibilities; and c) strict discipline and training – we lost some time at the beginning to train the sales organization how to work with Nexo coolers, scanning them, processing data, and so on.

What would you say to people who are skeptical about investing in connected coolers? We hear people say that the business case isn’t yet justified, it’s not proven- and they’re absolutely right. What would you say?

I’d advise them to try the same approach as we did. Two years ago, when considering an investment in Nexo, we did a pilot in Zagreb, where Nexo provided twenty units that were retrofitted into existing coolers. We were able to see how the technology works.

It was a very controlled pilot. We looked into the data, and experimented for several months; and found that there was enough proof for us that we could scale it up to the entire cooler fleet that we have. We saw that we are able to take decisions that would allow us to increase our efficiency faster than before, and have more transparency on each individual cooler in the market.

Again I think that we, as producers, shouldn’t focus very much on proving whether Nexo is generating uplift or not, because sometimes that’s very difficult to prove: there are a lot of factors you need to take into consideration. Assess the result in its entirety: did you make your equipment work better, or not? Sometimes you need to take the decision based on intuition. In the case of Nexo, our intuition was pretty strong- and it wasn’t very tough to sell this case to the rest of the management of the organization. Everyone was able to immediately grasp that if we can use the data correctly, then we can generate benefits.

I have a strong belief in Nexo. There are so many opportunities- as soon as we are able to find the way to use it.

Cooler Leaders: Cristian Araya Tobar, Andina Chile

Nexo spoke with Cristian Araya Tobar, Head of Cooler Operations at Coca-Cola Andina in Chile, about his experiences deploying connected coolers.

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Please tell us about your role at Andina Chile, and what you are trying to achieve.

I’ve worked at Andina Chile for about nine and a half years, and my role is head of Cooler Operations. I’m in charge of everything related to the company’s marketing assets, whether coolers, vending machines or coffee machines. I oversee purchasing, maintenance, installation and distribution, as well as analysis of these operations. We look after the whole lifecycle of the assets.

What are the challenges you face in achieving your objectives? What part do connected coolers play?

Well, we know that the main driver of sales is the cooling equipment; what makes the difference is often the presence of the equipment, or its size for example. Given this, we have two challenges: how to provide useful information to the sales team so they can make the right decisions to win and increase sales at each PoS; and secondly, how we can best look after the assets, so that once they are installed, they’re registered in our asset list, the retailer performance is available, and our information is up-to-date. We see this second challenge as fundamental to sustaining sales through coolers.

How we solve those two challenges through a connectivity implementation is the challenge we’re addressing now. It can, to begin with, help us with the care of the asset; and beyond that, once we have collected the data, we can transform it into valuable information so that we make good decisions, and increase sales.

Which stakeholders are involved in your project, and did you need to put any new capabilities in place?

Our department is 100% involved in this project, and I have instructed team leaders to drive progress, and ensure that connected coolers gain importance over time.

We’ve already incorporated the idea into the DNA of the commercial department, so they know that we’re already working on concepts ‘of the future’. I’ve also introduced the project to IT systems teams.

Where we have perhaps the greatest challenge is to introduce this project to the marketing department. I predict that a restructuring will be necessary when we have scaled up- by which, I mean that we will need analysts that dedicate 100% of their time to monitor the solution and to validate things such as location data.

I can see that we will also want analysts to mine the data, process and distribute this to the commercial teams.

A lot of companies ask us where they should integrate the data that comes from connected coolers into their business. What is your advice?

I believe that a new department and capability ought to be built- a connectivity department, a customer engagement director perhaps- where every project related to connectivity should reside.

And that area is the one that will process Nexo information to make it available for salespeople: to advise on the best regional opportunities, and actions to take to drive sales for existing customers. The department would present information, to show what’s currently happening and where things are moving. In short, it’s a new concept that needs to be generated, to make the most of this sort of product.

How will you ultimately measure the success of the connected cooler program?

One of the best outcomes is the communication with the customer. Several initiatives, not just this one, will allow us to hand over a tool to provide valuable information to the retailer, information that is useful to them and to us. I would like them to connect, to see the data, and provide more useful information to us. So, it would be a win-win, to strengthen the retailer partnerships we already have. I hope that customers will be more proactive, committed, and connected, with us.

The outcome that connected coolers is going to enable is for the retailer to sell more, but also for us to control the asset, and make things such as product ordering and sales more efficient. We can improve our operations, and at the same time protect the assets in case of loss.

Are there things you know now about deploying this kind of solution which you didn’t know when you started?

With Nexo’s arrival came a million opportunities, ideas and processes. Opportunities were opened to us that we previously thought were unthinkable. We had been looking for connectivity, but perhaps through incorrect paths- GPS and RFID.

What gaps do you see between what you still need, and what vendors in this market are providing?

From my experience with Nexo, I would describe there being a gap between simpler software that was previously available, and Nexo Discovery. A leap was needed to understand that the web application should be more user friendly- and it changed completely. So, the Nexo solution has been transformed.

However, there is another thing to highlight, which is the surrounding support to accompany the innovation. Usually when companies come to us with an innovation, there is no accompanying support, and typically that innovation will be lost, no matter how good it is. It’s necessary to understand whether the company has support on its agenda.

What Nexo does is very good because it supports us, pushes us so that this project goes forward.

The challenge for vendors for the future is to make sure that the development of both the mobile app and the web page will be as efficient as possible in terms of the user’s time. Everything needs to be executable in a fast way, that doesn’t involve ten steps to get to the final result.

What would you say to people who are skeptical about investing in connected coolers? We hear people say that the business case isn’t yet justified, it’s not proven- and they’re absolutely right. What would you say?

My advice for those that are skeptical about this technology: the best thing is to try it, have it in hand, go out to the field and perform studies. What convinced us at Andina was using the solution in real situations with the customer, and understanding the results having them analysed by professionals. We decided to try it, look at it and analyse it. Only after doing that can you evaluate its true worth.

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Cooler Leaders: Arturo Tapia, Sigma Alimentos

Nexo spoke with Arturo Tapia, Director of Commercial Transformation at Sigma Alimentos, about his experiences investing in connected coolers. Sigma Alimentos is a global food company headquartered in Mexico.

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Please tell us about your role at Sigma, and what you are trying to achieve.

I have worked at Sigma for twenty years, and nowadays I’m in charge of the transformation of the commercial area. I look at improving operations, technology, information, resources and integrating best practice from all over the world in order to drive better performance for the next five to ten years.

What are the challenges you face in achieving your objectives? What part do connected coolers play?

I believe we are at the point where we have to bridge the gap between our existing expertise, and the new information we can discover.

If you can’t fully understand what’s going on, and translate this into a vision that helps your team to make better decisions, it’s going to be a tough time. There is a huge need for companies like us to engage properly with customers, wherever they are- and likewise, we are at threat from new entrants that could maybe do this job better. Things like eCommerce pose a threat and an opportunity depending on how we react. We are therefore always looking out for tools and techniques that help us to perform better.

One of the objectives we have is to personalize the offer that we give to customers- every week, we serve 300,000 of them. So, it’s not easy to make a proposal to each of them in a personalized way. The way that information from connected coolers helps is to address a better customer segmentation, and to understand what the best offering is for that customer.

We are at the beginning of understanding what’s going on at the point of sale, and trying to connect with the other touchpoints in the area. Because of the nature of our products [dry meats, cooked meats, dairy], we are always on tables in homes, or in refrigerators- but we don’t know why customers choose to buy them in a mom-and-pop, a supermarket, or a convenience store. We have many studies and insights into this, but no single source that tells us about the product’s performance. This is our driver for collecting, and understanding data from connected coolers.

What kind of stakeholders have you involved in your project, and in pushing a strategy like this forward?

First of all you need to be very aware of what is going on with the sales team, what’s bothering them, what are their needs- what’s happening in the marketplace. Secondly, I’ve involved marketing, because we have a strategy for the brand, and we need to address each point of sale.

The finance team is also involved, because you need to have a profitable model; as are the areas that support the project, such as our eighty sales offices, with distribution and vehicle managers, administration colleagues, and so on. We need to be connected in a way that allows us to find metrics and processes that will help us in all areas.

My vision is that, in providing a solution, you can help not only the sales team, but make all processes more efficient; but it’s not easy.

Have you simply found new ways of working, to achieve this- or have you had to add new capabilities to teams?

Both of them. It has to be about new processes, new technologies and new capabilities, in many ways.

One of the things we’ve learned in the last year is that we must handle the change in a very professional way, taking care of the emotions and the needs of the people; our commercial team in Mexico numbers 14,000 people. It’s important to be aware of what they are thinking, and how we are involving them in this change- and training them in order to achieve what we want to.

How do you envision that the connected cooler data will be integrated into Sigma’s business?

For me, it’s an enabler. It’s going to help us to make better decisions for sales reps. Currently, it’s difficult to achieve a high level of accuracy in selecting the best portfolio, or location for a cooler. With connected cooler data, we’ll be able to see the number of times the door is opened; how many SKUs should be placed; if the planogram is right; whether the purity is ok or not.

In that way, we can help the sales reps simplify their way of thinking, and use their energy for challenges that I can’t solve with technology. So, we’ll help them with the basics, and train them in a more advanced way of creating solutions and proposals for customers.

Many readers of this interview will work for beverage businesses. Are there any particular challenges that a company like Sigma faces, that a beverage business would not?

We are a multi-category company, so we need to understand the best place to put our products- and mix them. There are people in our industry that think the best way to place products is based on the solution that you’re offering- for example, to provide for sandwiches, you place ham and cheese together. Others say that you have to think about category, and the need you’re solving: this could mean putting yoghurt out in the morning, and changing it to ham in the afternoon, because of what is typically consumed at different times of day. I’m not an expert in beverages, but it looks simpler than the things we try to do, because we have many categories.

And, as you know, we are not a traffic generator to the Mom and Pops [independent stores], so we need to allocate another kind of resource, material or communication that brings us closer to the consumer. That’s why we need to understand what kind of consumer is going to that location. Connected coolers give us the opportunity to connect with the consumer, to give a tailored promotion for that consumer, going to that fridge, at that store; this is the way we can track what’s going on with our brand.

How will you ultimately measure the success of the connected cooler initiative?

The obvious one is sales. That’s what you’re looking for, sales and market share.

The difficult task here is to find the correct time interval to measure. Sometimes you want to see a return on investment within one or two months, or maybe one year; but maybe it will take two or three years. It’s something right now we don’t know.

But it’s a no-brainer. I feel that, with experience, you know that you have to do it, because it’s going to help you to address many other things that you can’t yet predict.

Are there things you know now about deploying this kind of solution which you didn’t know when you started?

I think that we as a large company can sometimes forget about the basics. They are very important. Your data must be accurate, your number of customers- the link between the cooler and the customer, too- is very important. When you want to build programs like this, the first thing you have to achieve is to be clear that your data is correct.

Even though we have processes that we are not touching, what we’re doing right now is to clean and segment the database- because sooner or later, we’re going to use it for those processes. I’m taking care not to have to invest more time and more resources when that happens.

Secondly, try to understand what you’re looking for. It’s a basic objective: you want to be more productive, or more efficient; to send the message to your customers that you are a high-tech company looking for better solutions. So define an objective, and work on it.

What gaps do you see between what you still need, and what vendors in this market are providing?

I think the big mistake, as I personally see it, is that most vendors are providing platforms in which you can look at the granular detail of the data. For example, you may have detailed information on routes, on cooler maintenance, and performance; who is going to look at that kind of detail in each of the portals?

The challenge I put to vendors is: how do you translate and present KPIs around these alerts and measurements that you’re making, in order to help your customers make better decisions? And, for key decision makers, I need something actionable, that helps me to increase sales, reduce waste, increase productivity or improve performance in any sense. It also has to be connected to your own platforms, in order that the user can work quickly across all our business information.

What would you say to people who are skeptical about investing in connected coolers?

I would tell them that sometimes you should take a risk on something that looks likely, but which you’re not 100% sure will give you the exact number of efficiencies you’re looking for. With the experiences that you’ll have, and with the possibility of growing or thinking differently, sometimes it’s better than not doing something because you’re not sure of what the benefit is.

If you’re not sure, try with a sample, do an experiment at a scale that you can handle- but don’t do nothing, it’s a bigger mistake than doing it.

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Cooler Leaders: Carlos Arango, Quilmes

Nexo spoke with Carlos Arango, Commercial Capex Director at Quilmes, about his experiences investing in connected coolers. Quilmes is the AB InBev Opco in Argentina.

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Please tell us about your role at Quilmes, and what you are trying to achieve.

I look after Commercial CAPEX in the company, which covers coolers, draft beer, and post mix for soft drinks. I have under my control the cycle and lifetime of this equipment- from the very beginning when evaluating suppliers, to purchasing and defining what kind of coolers and equipment to buy; to making changes in the technical specifications that adapt to our needs. I work with finance to develop the budget, and with the sales force to tackle the challenge of where to send equipment in the market, and in what volume.

Regarding maintenance, I look after commercial and technical aspects: tracking coolers, and understanding the sales volumes. I work on better defining our technical services, managing the servicing in the field. My department also repairs equipment, and manages write-offs. Examples of measuring success include having a target of cleaning the draft beer pipes at least once a month, and processing cooler sales calls within a certain time limit.

What are the challenges you face in achieving your objectives? What part do connected coolers play?

We have many, many coolers in the field, and it’s not easy to be sure that the minimum sales volume in the store is good enough. We are also faced with the basic challenge of being sure where the coolers are. To know where, exactly, each cooler is in the field; connected coolers allow us to align this information with the code or the owner of the store in our database.

Secondly, we want to try, with the information we can get from the controller, to find some metrics that help us to have a better understanding of the business in each store. The idea of that is to give us a competitive advantage.

Do you think you know what all those metrics are, or do you think you’ll learn as you explore the data?

We have some ideas, some theories about how the data will help us. We are not yet sure. One idea concerns the ‘invasion’ of the cooler with products of competing brands; and we are also focused on knowing our market share in the store. That, to me, is important.

Another is, regarding the function of the cooler, to have a sense of the temperature in the condenser. It could help us to define if the compressor could break in the future.

Which stakeholders are involved in your project, and did you need to put any new capabilities in place?

Business information [BI] from the connected coolers is to be used in the whole sales department, including Trade Marketing; Pricing; Tap Sales; and Operations. We intend to use it in the whole department.

We are already working with KPIs in our department, and this is another way to work with them, so I found we didn’t need any new capability. It’s about adding new information to the current information we have, to make better decisions.

A lot of companies ask us where they should integrate the data that comes from connected coolers into their business. What is your advice?

In the beginning, we felt that it was ok to keep the information in the cloud [Nexo cloud], separate from the rest of the information in the company. But, when we really knew that the information was relevant for the business, we felt it should be integrated with our BI, and the company should have its own cloud, with all the relevant information of the company, to compare with the other information- sales information.

Our sales information should be integrated with the information of the controller, so we could have more interesting or more relevant KPIs. It’s not only about the KPIs that we can develop from the controller; if we combine the information from the controller with our sales information, I believe we can create more interesting KPIs for the business.

How will you ultimately measure the success of the connected cooler program?

We’d measure success with more sales. But… not only that…

If we can make something happen that helps the consumer to perceive us as a better brand, in the long term it should impact the sales. Maybe not in the short term, but it’s also a good reason to do it. We are not yet sure how to involve the controller in improving perception of the brand. But this is not only about sales. That’s the obvious objective in the short term, but with the technology we will have the possibility to manage some marketing campaigns, for example.

Are there things you know now about deploying this kind of solution which you didn’t know when you started?

In the beginning, I thought that it would be quicker to develop the integrated hardware and software solution. And, maybe one mistake was not trying to find help in other departments in the company to do it more quickly. One reason for that was that nobody was really sure; partly because it’s seen as fashionable to have a project involving connectivity. But in general, people in the company are as yet unsure about how to benefit from connected coolers and then how to do it. It’s very new, and ours is not a technology company- unlike a bank, or a software company. However, if you look at the competition, nobody else is doing it, so we hope to take advantage of the time we have spent on this subject to date.

What gaps do you see between what you still need, and what vendors in this market are providing?

There are two things. Firstly, to have a website that is really oriented to the needs of the client. Which is not easy, because I don’t know what I need! So, the first challenge for vendors is to have a really good understanding of the business.

The other thing is regarding data mining, or some kind of methodology with which to classify or segment our clients. I am talking about the South America market, where it’s not easy to find a partner to work on this kind of thing. We’d like to take a second step, and take things further. Profiling case studies that I’ve read are typically about banks, or insurance companies; it seems there is no experience in the market in working with a mass consumption market like ours.

What would you say to people who are skeptical about investing in connected coolers? We hear people say that the business case isn’t yet justified, it’s not proven- and they’re absolutely right. What would you say?

I think the issue for people who are skeptical is more the cost of the solution; because nobody is in a position to say this doesn’t work. To me, cost versus benefit is where the discussion is. We think that this is interesting and new, and that probably we should do it; but in the moment when we need to define the costs of the project, we worry that it is massive. We’re talking about thousands of coolers. So, if you have a strong case to show the benefits are relevant, against the cost- there is no big argument against it.

Download

Asset Tracking: How to improve your location information

Download here: Nexo White Paper – Asset Tracking – how to improve your location information

Training slides: http://info.nexo.com/geo-location-resources

Your coolers are being automatically mapped onto your BI portal, but locations may not always be precisely accurate. What’s behind this- and what can you do to improve things?

The situation

Knowing the location of assets is crucial to your marketing equipment effectiveness, and budget. Coolers that are vulnerable to being moved or stolen must be closely monitored, while logging the relocation of assets improves the auditing of your asset registry, reducing costs. What can be done to ensure high quality in your cooler location information, right from the outset? The Nexo solution has been developed with this in mind.

The technology

Asset Management techniques

Your asset is located during the data collection process. When commissioned in field, and/or when the cooler is re-synchronized, the mobile device or modem used in the field sets a location for the cooler. The mobile device or modem, not the smart controller or beacon, determines the location. Setting up your cooler and its sensing technology automatically locates it in Nexo Discovery. You can then review the cooler’s location, at your desk, alongside that of your whole fleet.

A related part of asset management is the asset audit. The Movement History tool in Nexo Discovery shows a record of the assets that have moved more than 200 meters since the last time data was collected. Collecting data for coolers regularly ensures you maintain an up-to-date asset registry, confirming and/or changing addresses. And when data is updated frequently, and over a large volume of coolers, the precise location of assets can be improved upon over time.

This is related to the variety of performance seen in Smart phone location pinpointing. Why are differing levels of location accuracy found in different areas? The answer lies in the layers of technology used by most connected cooler vendors, including Nexo, to determine a location.

Smart phone location technology

How mobiles are located, this image shows the main ways in which mobiles and smartphones can be placed on a map

Smart phones determine their location through several geo-locating technologies. Cell towers, WiFi networks, and satellites- using GPS- can all contribute to the determination of a location. The level of accuracy varies across these methods, and is summarized in table 1.

 

Method Cell tower triangulation Wifi network triangulation GPS (satellite positioning)
Accuracy 100m 10-20m Less than 10m
Medium Good Good
Pros Widely available Accurate Accurate
Low battery consumption Low battery consumption
Cons Not accurate Depends on density of network High battery consumption
Does not work inside buildings

Table 1.

 

With all three location services switched on, a Smart phone will determine the optimal combination of these to use in each situation. It therefore follows that, with all three services switched on, you have the best chance of the Smart phone selecting the correct location. Note that the location of the cooler is not shown on a map to the person collecting data through the Nexo App.

 

Figure 1.

Using the Nexo solution to optimize geo-location

Nexo knows that the quality and accuracy of location data points vary (Figure 1). To address this, the Nexo solution has been designed to continually assess and improve the location data collected when coolers are visited, or polled by a modem. Further, to avoid incorrectly marking a cooler as having moved, a specially developed algorithm checks the quality of data point. In this way, the likelihood of the location data being high quality is continually improved.

In-field examples conducted by Nexo and its clients have shown that location data points can vary depending on terrain, urban/rural, and country. Furthermore, repeated syncs of data improve the accuracy of location data. As the natural process for managing Nexo connected coolers involves regular collection of cooler data through synchronization, location accuracy is continually improved through no deliberate intervention.

Yet, you can take steps to accelerate this process. Ensure that coolers are synchronized frequently to collect more location data points, as well as maintain all other Nexo metrics. Monitor the Location Management dial on the Nexo dashboard to help you prioritise coolers for syncing. Enable as many location services on smart phones as possible: the cellular network, GPS, and WiFi. Switching on WiFi is not, as is sometimes assumed, a drain on the battery. A good location estimate can be created: it will ‘listen’ for nearby networks, even if they are not in the same building.

Having a picture of the changing shape of your data can enable efficient planning. Consider the growth of both cooler numbers, and location accuracy, as the waves of cooler commissioning and synchronization are undertaken. Use table 2 as a way to frame your thinking.

 

Phase 1: low cooler number, medium location accuracy Phase 2: medium cooler number, medium / high location accuracy Phase 3: high cooler number, high location accuracy
What are your priorities? What kind of things are you going to focus on testing and evaluating going forward? What do you need to test at scale, that you learned in phase one? How can you maintain high levels of location accuracy?
How can these be combined with a focus on location accuracy?
What testing and education can be undertaken?

Table 2.

 

The future

Beyond the rollout of your connected cooler program lies the ongoing work of asset renewal. Each year, the addition and removal of equipment from service must be managed alongside servicing and sales initiatives. After you have set up your connected cooler deployment plan, how will information about the estate be continually refreshed? We recommend initiatives to educate maintenance staff, and regularly reassess asset processing, in light of the outcomes from the phases above.

Developing consumer experiences of the future: three tips for FMCG brands

mobile lifestyle marketing out-of-home retail "consumer engagement"

What needs to be done to enable consumers to discover new, compelling brand interactions?

IoT is rapidly growing in importance for FMCG brands. The ways in which a connected device deepens the experience for the consumer- from a car that tailors tools to your driving habits, to a home store using a VR experience for tactile online shopping– present limitless capabilities to meet marketers’ objectives, now and in the future.

Marketers know that experiences, not technology itself, drive the adoption of new tools and interactions by consumers. What needs to be done to enable consumers to discover new, compelling brand interactions? There are three key areas that brands must align to take advantage of the opportunities presented by IoT.

Firstly, consumers need to warm to the notion of interacting with physical objects. We have begun to see this in the large scale launches of Amazon’s Alexa, and Google Home, and the future of consumer interaction will be primed by this type of lifestyle tool. The experience for the consumer needs a number of factors: they should not be disrupted by the process; they need to appreciate the value of the interaction, beyond rational acceptance; and they ought to be inspired by the benefits the interaction brings.

Secondly, the progress of mobile platforms (apps, and mobile devices) towards a holistic consumer experience will be critical. We currently know our mobile phones primarily as search devices, portals to our social networks, and media devices, so developing usage as a tool with which to interact with the exterior world is another necessary step. While technological development in this area is inevitable, earning consumer trust will be vital to enable full acceptance.

The third component of a successful IoT consumer experience is to provide an end-to-end experience for all parties involved. There’s little point in providing a coupon to a consumer if it cannot be redeemed there and then, or requires further effort to be validated. Equally, brands and retailers will not invest if a campaign’s return path analytics do not allow them to analyse outcomes and develop actionable theories. In summary, the tools that will enable the best IoT consumer experiences will be developed for the consumer and for the vendors to service specific and meaningful needs.

This will give heart to those taking the advice of the recent R3 Worldwide whitepaper, that pointed to a strong consumer dialogue as one of the key tactics in strengthening brands’ market share, in the face of retailers’ growing dominance.

Nexo Discovery is the leading connected cooler solution offering consumer engagement, together with operational management tools, and a sophisticated new approach to commercial analysis. It has been designed specifically for brands and marketing equipment management. Where human behavior is evolving rapidly on its own, and mobile platforms keeping pace, Nexo provides a ready technology solution for brands wishing to expand their relationship with consumers. The only challenge now is a creative one.

Take a look at some of our favorite tech-enabled consumer experiences:

Tesco – virtual shopping screen http://www.bbc.co.uk/news/technology-19148154

Born Free – free an Orca screen https://vimeo.com/228971024

Molson Canadian – beer fridge https://www.youtube.com/watch?v=8gper3YkzMg

Heineken – Departure Roulette departures board https://www.youtube.com/watch?v=cg0oBV32ZDk

 

Find out more about the Nexo solution here.