Artificial Intelligence Delivers Sales And Service Improvement For Coca Cola Vending Machines
Reyes Coca Cola Bottling, based in Irvine, Calif., improved its full line vending profitability by deploying an artificial intelligence (AI) tool. Company representatives gave an overview during the recent NAMA show at the Las Vegas Convention Center.
Reyes Coca Cola Bottling, which manages 19,000 vending machines across California and Nevada, recently completed a two-year project that delivered a 6 percent sales increase and a 15 percent decrease in restocking trips, noted Ed DeFraine, vice president of food service and on-premise for the company.
DeFraine, who was joined by Reza Kasravi, head of IT strategy, architecture and operations for Coca-Cola North America, and representatives of Australia based Hivery, the company’s AI partner in the two-year project, said the project marks the first AI application in full-line beverage vending.
AI makes use of more extensive data than other management tools. The project proved AI’s ability to automatically make intelligent product placement decisions faster than humans acting alone.
The Hivery AI solution utilizes robotics, sensors, natural language processing, speech recognition, text-to-speech, computer vision, machine learning, machine reasoning, decision making, deep learning neural networks, business analytics and data services.
Reyes Coca Cola Bottling previously created machine planograms using a more limited set of location characteristics, DeFraine said. The drivers filling the machines were permitted to make adjustments to the planograms based on personal knowledge of the locations. The company’s vending management software selected the products based on the machines’ sales histories.
The company’s vending revenue had been declining before it began to explore the Hivery solution in 2016, DeFraine said. He felt the company needed a better understanding of the products being stocked and the top selling items.
DeFraine learned that Coca Cola North America was testing the AI software in 25 machines in Las Vegas. He visited some of the Las Vegas locations to see what impact AI had on the product selections and the sales.
He noticed that the AI software was making product selections that would have been impossible for a human. A machine in a hospital emergency room only had one facing of the Monster energy drink instead of the typical 15 to 20 facings. The reason was that AI recognized that people don’t normally buy energy drinks when visiting the emergency room.
Reyes then launched its own test with the Hivery AI tool.
In a sports and entertainment stadium in Sacramento, the AI tool allocated two rows of Minute Maid lemonade beverages. The reason for this was that the location was patronized by roadies, who usually drink a lot of lemonade.
DeFraine said the AI tool was optimizing based on the specific location and the specific consumer set, something that no beverage driver would have been able to do on their own.
For the AI tool to work, the machines must be able to report data accurately, DeFraine noted.
The company equipped the machines accounting for 80 percent of the sales with telemetry to report data in real time. The machines not equipped with telemetry have sales tracked using predictive modeling, which DeFraine said provides sufficient accuracy for machines with slower sales.
The vending management software, however, could not take into account as many factors as the AI tool. Nor could it predict a product’s performance as accurately.
The AI tool does a “what if” analysis for a product the company might consider placing in a machine. There is no need to actually test the product to determine how it will perform in the field.
The AI tool was also able to more accurately determine the best times to service the machines, which made restocking more efficient.
Matt Robards, a Hivery data scientist, explained that the cloud-based software identifies the right product, the right space-to-sales ratio and the right promotional activity for products in every one of Reyes’ vending machines. The Hivery software sits atop the existing vending machine management software.
Jason Hosking, CEO of Hivery, said AI doesn’t replace humans. While AI can complete a task faster and better than humans, it does not surpass the performance of humans working in partnership with AI.
By Jeff Adair
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