Direct store delivery Webinar transcript

Subtitle
July 14, 2011

Name: Accenture CAS Direct Store Delivery Webinar with Gartner Research and The Coca-Cola Company Speakers:
Kevin Sterneckert, Gartner Research Vice President, Research Consumer Products & Retail Industry Lutz von Nida, The Coca-Cola Company Director, Process & Solutions, Bottler Service Group - Global IT Dr. Ramin Shariatmadari, Accenture CAS Director Product Marketing, Retail Execution, Direct Store Delivery, and Mobility

Moderator: Gary Adams, Accenture CAS Director, Product Marketing, Customer Management Length: 60:00

Gary Adams (Moderator)

Welcome, good morning, good afternoon and good evening to all of you who have joined, we're very excited about you coming online and listening to the presentations we have today. The actual agenda we will walk through will provide a Gartner Research perspective on direct store delivery relative to consumer centric retailing, and how consumers and retailers are impacted by not only the DSD processes, but by the data that now becomes available to help make better decisions. We will then hand off to a representative from The Coca-Cola Company to talk about direct store delivery from their perspective, and how it truly is viewed to be a key part of how they improve the performance of The Coca-Cola Company. And then thirdly, we have a speaker from Accenture CAS who will talk about our perspective on a software platform capability to enable this growth in your business. I'd like to introduce the people that are speaking today. From Gartner, we have Mr. Kevin Sterneckert, who is a VP Research CP and Retail Industry associate. From The Coca-Cola Company, we'd like to welcome Lutz von Nida, who is the Director of Process and Solutions for the bottler service group within their IT organization. And then last but not least from Accenture CAS is Dr. Ramin Shariatmadari, who is the new Director of Product Marketing for the retail execution, direct store delivery and mobility platform that is the Accenture CAS offering. A little bit about today's presenters, Lutz as I mentioned is the process solution director for all customer facing processes, and is responsible for the strategy and process and solution design for the bottler service group. Lutz has a broad and extensive background in the carbonated beverage business, and were very happy to have him with us today speaking to their perspective. Secondly, Kevin Sterneckert is, as mentioned, a VP within the research group, focused on consumer products and the retail industry. He focuses on researching and analyzing pattern-based strategy optimization capabilities, demand driven value network, downstream data, et cetera. And has really, really got an extensive background in how the analytics can drive better performance for both retailers and manufacturers. So without further ado, I want to get to what we've asked you all to come and listen to, I'd like to turn over the agenda and the presentation to Kevin to get us started. Kevin, the floor is yours.

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Kevin Sterneckert
Thank you very much, Gary, and I appreciate everyone who has joined this webinar. I look forward to sharing with you the content and research findings that we have prepared. To begin, and to really focus on the value that companies are extracting through a direct store delivery relationship between manufacturers and retailers, we see at Gartner companies receiving as much as 30 percent improvement in working capital. And this is primarily due to the fact that there's a faster replenishment and payment cycle than the traditional distribution cycles of ordering from a manufacturer, delivered to a warehouse and then warehouse to locations. We also see that this is a contributor to a more responsive replenishment cycle. As many of the direct store delivery processes take a look at the actual inventory in a given location, the expected needs for the cycle between deliveries, and then delivering the exact quantities at a far closer cycle than traditional replenishment cycles. We see that this replenishment automation results in as much as five times faster response to demand. That's an incredible number if you think about it, five times faster. A GMA study in 2011 found that DSD in-stock levels were as high as 98 percent, 98.2 to be specific. And traditional warehouse replenished products were at 94 percent. And as retailers have struggled for decades to move the needle on that in-stock percentage that has hovered in the low 90s for a very long time, this is an important notation to understand how DSD can be a contributor to satisfying your customers. Now we're, of course, not advocating that every product within a store become a DSD item, but for those items that have high degrees of demand volatility, or interesting financials, the DSD model delivers an important advantage in the business. We also see an interesting aspect in point number four around innovation and differentiation. IRI observed that 48 percent of the new products in the CPG business were introduced via DSD. This gives opportunities for retailers to use a try before you buy kind of model before they dedicate all of the conditions required to carry something in the main channels of distribution, and provide an opportunity to have greater flexibility and product assortments. So as we think about the key conditions and benefits that come from DSD, I thought it would be best if we started off with what those are, and then dig into some of the conditions that are in the marketplace today, which I intend to do at this moment. What we see today is a significant upheaval of the amount of information that is available to the trade, so between manufacturers and retailers, the amount of information is significant. And the expectation by consumers for retailers and manufacturers to more quickly respond to consumer preferences and sentiments and adjustments in changes and behaviors, we see a greater demand upon this trade network to deliver for the consumer. The retailers and manufacturers who are finding a way to better understand their customer, and creating and developing channels that deliver on those customers' needs and expectations are pulling away from their competitors in performance. When we look at demand driven leaders, and this is an area that we focus significant amount of research, and we're about to release the 2011 report on this very category, we examined 100 global retailers that were public. And as analysts, we took a look at those 100 companies, and we identified the top eight that we believe were most demand driven. As we dig into an understanding of these retailers and trading partners, and look at their behaviors, we're able to determine who we think is most demand driven, those focused on understanding consumer behaviors and translating it throughout their trade network.
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We see those companies having a significant advantage in the marketplace relative to return on asset, inventory turns and revenue growth, three numbers which are publicly quoted in publication, and that are audited. And as we look at the peer group, those companies that were not of the top eight, we see a significant difference, as you can see from this chart. Now to be fair, we did not stack the deck and find the best eight performing companies. We identified the behaviors of a demand driven retailer and manufacturer, and then identified who those companies are, and then looked at the numbers. And this year's numbers are even more striking, when we take a look at what companies are telling us that they're working to deliver, the trade network is looking to deliver 20 percent better perfect orders. The leaders are focused in this area, how do I make sure that the right product is on time and in full at the desired location? Laggards, those companies that are not the leading performers in the industry, are not focused on this goal the same way Leaders are. Further, Leaders are looking to hold less inventory, so closer to the demand with fewer protection points within the supply chain. We see that Leaders have 54 days of inventory on hand, and Laggards have 72 days. We also see that Leaders are reducing their costs in the total supply chain. And we see that DSD has the ability to provide performance for companies who are focused on these three primary areas and goals. When I think about the retail trends that are happening within the industry, and as I talk with a number of companies, both manufacturers and retailers, I hear consistent themes. One of the themes that I'm hearing is, is that companies, both manufacturers and retailers, are focused on becoming more consumer centric. Now this title has been used for a very long time, but I believe that we are beginning to see a realization of consumer centricity as we see companies like Kroger and Macy's and Target and Safeway and others who are focused on truly understanding the consumer, truly understanding their behaviors, and focusing on delivering a value offering that represents the needs and desires of those consumers. We also see companies focusing on connecting their corporate goals with the execution across their divisions. In the past, you would have siloed activities where companies would put up a Chinese wall to hopefully keep people honest, and things were shared or done to people given a budget, this is your number, now you have to figure out how to deliver it versus today by saying jointly, what does the customer want, and how do we deliver on what the customer needs from an execution perspective, from a financial perspective, from a merchandising perspective? We also see companies focusing on identifying and reducing SKU and brand duplication, and I'll go more into that a little later. Companies are focused on optimizing key levers within the merchandising process of assortment, space, price, promotion, offer and inventory. Focused on understanding how they remove products from the supply chain that customers do not want, that they truly see as duplication, and maximizing the opportunities within these levers. We also see companies that are focused on a unified forecast for demand, understanding the true demand of consumers at the end of the day, that last inch at the shelf or online. Now those behaviors and strategies that I just shared with you are really realized through a series of different technologies that companies are licensing. And when I think about the focus of investment, of companies of those that are on the phone today on our call, or those that we speak to on a regular basis, we see companies investing in lifecycle price optimization, intelligence store clustering, using advanced analytics, also assortment optimization and rationalization integrated with

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space planning and optimization. We see companies focused on how to connect with the consumer in a one-to-one relationship specific offers for specific consumers. Companies are definitely focused on cross channel transparency, connecting customers with the products and the orders required to deliver on that demand. And also, a significant focus of collecting, measuring and acting and shaping consumer demand signals. Now I mentioned one of the behaviors that companies are focused on, and that is SKU rationalization. And I believe and predict that this is a top five initiative for winning trading partners and retailers over the next two to three years. We see a number of companies who are focused on these activities. In the marketplace we've heard a substantial amount of interest in companies who are focused on this set of activities. So why is this so big? Well in research that we have completed, we identify that there's between 10 to 18 percent of true duplication on the shelf. Well what does that mean for DSD? If you were to examine the assortments and identify that there's 18 percent of the actual SKUs in certain categories that are duplicative, and they were to be removed, this opens up the opportunity for new products, differentiated products, more of that 48 percent of the new products that are initiated via DSD have the opportunity to now share some space on the shelf. We also see companies focusing on differentiation, eliminating the sameness, but providing the focus of what customers are looking for. Many companies have spoken about localizing their assortments, and identifying the true differences from one store to the next. And as companies look to achieve this third objective, we see significant response by consumers to improvements in sales and volume. It also is a very interesting, competitive weapon as companies are focused on providing the right assortments for the customers in the given location of where that store or outlet may be. The other items within this list, you certainly can see for yourself. I think that it's interesting to note that when companies are looking at how they will improve their merchandising plans, 100 North American retailers responded that they're first looking at consumer demand preferences. But they find that it represents the largest gap of their capabilities. And what does this mean for companies who are involved in DSD and delivering the capabilities to retail? I believe that the companies who have that capability and are looking to advance on the primary objectives and benefits that I mentioned in the beginning of my presentation, have that opportunity to deliver insight and information to their trading partners in a way that they cannot gain themselves. So a manufacturer does insight research and they are able to identify certain aspects of given locations that represent insight and information that the retailer did not have themselves, they can be a leader for the category, and offer opportunities in how that might be resolved through a DSD offering. Now when we think about companies that are progressing from good to better, we see companies that are integrating demand, supply and product. Now we certainly can speak to these terms and have done so at Gartner for many years, but what we find is, is that there are companies that are fantastic at supply, and companies that are fantastic at product. And there are companies that are trying to be good at all three, but in a siloed and separate way. When we examine the companies that are leading, those companies that are the most demand driven, and are the most consumer centric, they are representing disciplines that are balanced across demand supply and products. And it's

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representing also a level of maturity in the way that they coordinate their efforts with their trading partners. When we think about companies that are the very best, we see behaviors of orchestrating across the innovation of excellence where companies are truly sharing information with their trading partners, where retailers are providing the details that they have within their own transaction logs with their trading partners, such that the manufacturers have the same information that the retailers do. And companies are beginning to share not only data, but also insights that are derived from that data. Those companies that are willing to share the insights are those companies that are also leading the pack by the best performance in the trade. When we take a look at this process of bringing demand, supply and product together. We see behavioral patterns that are beginning to emerge, companies that are finding ways to use analytics to understand demand, the sense demand, that they can model that information that they're using to sense demand in a way that allows them to shape demand. It also enables companies to profitably respond to demand. Now, across the supply chain, we know that there's risk in supply chain management, there are opportunities around technology and there are insights that can be shared and understood with demand. But it's when these things are brought together and shared across the trade network that we see the most significant advances of companies. As we think about the different pieces of information that are important to share, we see companies who are beginning to provide insights and capabilities around the circle that I'm looking at called consumer demand engine, where companies are beginning to share insights of incrementality and loyalty, also a product attributes and decision trees and clustering and shelf and product dimensions. This insight in information that's being collected and created within a demand engine can be leveraged across all of the decisions, and leading companies are beginning to share these insights, as I mentioned, to be able to extract additional value within the trade network. There's always been this kind of push and pull between manufacturers and retailers about who has the balance of power. And I would suggest today that the balance of power has shifted to the consumer, and that those companies, the manufacturers and retailers who recognize that the consumer holds the power today will find that working together is far better than trying to figure out who of the two has the balance of power because I believe that the consumer has that power and that that is something that will not change for a long time. We believe best practices in direct store delivery are about seeking joint value, looking for the win-win, even when there might be an opportunity for I win a little more than my training partner. We also see that it's important to evaluate the resources that are available, to look at how you might be able to mitigate retail labor constraints but improve scalability. Companies are evaluating their order to cash processes and understanding how DSD can leverage and benefit that in a very positive way. We also see a best practice of companies aligning their goals and their insights and their information. Many of these activities are not common in the industry today. However, they are the leading trends of those companies that are finding the most value from a direct store delivery relationship. And with that, I'm very happy to hand the microphone over to a co-presenter of mine, Lutz von Nida. Lutz, I'll give you the ball. And if they are questions that you have about my material, please feel free to ask those questions and well answer them at the end of the segment.

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Lutz von Nida

Thank you. Thank you, Kevin. Thank you very much, Gary, for the introduction. You guys prepared the ground very well so probably I will have a very easy session right now. I want to give you, first of all, an overview about the strategy that we are following at The Coca-Cola Company and show that our strategy is to provide the best possible service to our customers, but also being able to show the customers the value he or she gets out of service that we provide to them during the DSD process. This does not only include the delivery or the pickup of goods, but also the execution of additional services like merchandizing, stock rotation, fulfilling additional product requests and services addressed to the driver. We also have to appreciate the specific situation of each customer and work on this in a collaborative manner. This means he or she has no time to talk to dozens of our people approaching him, as he has to focus on his core business, and not only talking to us. What is the conclusion that we have to draw here? You have to provide as many services for each customer interaction as possible, and DSD is the largest interaction we have with each customer. To nail it down, I want to give you an example. It is not only the delivery of pre-sold goods, but its also to take orders for the future if that is requested by the customer, execute merchandizing, execute equipment service requests and validate acceptance on site. This is a benefit not only for the customer, but also for us, as the DSD provider, as we save resource time and increasing the service at the same time. This is especially important for us in markets where we see high labor costs by bringing down the travel time and increase the in-store execution time. To do so, our demand on our people is bigger with this approach, we need to have the right supporting tools for our people in the field, plus we have to give our DSD people 360-degree insight into the customers. So the driver in our case is not only the person to execute the delivery, but it's really our face to the customers. So what does it mean for a DSD solution and for a mobile support DSD solution? The solution has to handle deliveries, but it also has to be able to handle customer demand that are usually served by merchandise or sales reps. This requires the right information to be available for the DSD driver in terms of master data, it means product and customer, but also being able to execute other actions. I want to give you a quick update now on the Coca-Cola system. I will not talk about the 125 years of our history, but give you some background facts on why DSD is so important. So the Coca-Cola system runs the largest distribution network around the world. We are available, and our products are available, in all countries around the world but three, which is Cuba, North Korea and Burma, and in our entire system we have 770,000 employees. So we are the fourth largest private employer in the world. The largest employer in the world is the Indian Railways system with more than two million people working for them. Getting back to the interaction we see with our customers, the delivery driver, the DSD driver, is our key representative, as he spends the most time with our clients. Sure, we have sales reps, merchandizing, technicians, full service vending, store auditors and account managers. But the DSD driver is clearly the person that has the most interaction and has the deepest insight with our customers. So our goal is to use this direct access to the customers to broaden our relationship and gain more insight into the customers. Sure we have also other modes of interaction like the telesales agent, rep interactions with customers, but we see the real value and the advantage of dealing with the customer in direct interaction, and that is the DSD driver.
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I want to focus here on the DSD execution, no matter if you execute using mobile devices or paper-based, but our strategy is clear that we move to mobile support for the DSD process. So what do we understand in the delivery execution? Basically it's the delivery of goods, capture these, adjust them if required, track the execution and bill the customers when this is required for the product. We also move more and more into the process to prevent any errors and any inconsistencies. With that process, we manage the customer assortment and the list of products, we try to simplify the delivery execution process for the driver and for the customer, as everything is executed in one process that is on-site. We also want to enable the driver on the ground in the DSD process to correct inconsistent pricing, to cross-selling, up-selling, campaign management and promotion execution. Sure, we see that this process is executed across many areas and many systems so we have to integrate these systems and make sure that they work together and data is executed and exchanged in the right manner. And one very important point, as we are in the food and beverage business, we have to fulfill all legal requirements and regulations. What does it mean, especially in the execution? That means we have to provide to achieve a first-time right principle in the delivery execution the information about the customer, historic order information, visit information, store information, any contact information and the goods that should be delivered to the customer to the driver. We deliver the goods. We collect the trends as I mentioned earlier. In certain markets, where we have a high portion of returnable glass bottles, for example, we have to collect the empties. We have to manage supporting materials and track them accurately. We have to adjust the quantities, and when we have an adjustment of any quantities, we have to be able to do re-pricing if that is required. And also, in quite a number of markets, we see that many of our drivers do deal with cash, so also the cash collection process has to be supported. What do we leave behind? To leave behind meaningful documents we have to make sure that our drivers are able to provide the right documents to the customer that are requested by them these are delivery notes, invoices and pro-forma invoices, these are cash collection slips, legal binding documents. We have to be able to capture the signature also here in a legal binding way, including watermarks, and you also have to be able to validate equipment on site, plus capturing any new requests from the customer for future delivery or for other services right on the ground. After the execution, you have to be able to have all follow-up activities completed by the driver. That means close any open tasks, close visits, have a debrief based on the information that has been captured during the day, executing the checking of cash, the product and a so-called pre-settlement process that allows the delivery driver in the DSD process to get all information of the day to him in a meaningful manner and detect any possible discrepancies before they hit the general ledger. I do not go into the settlement process or the back office activity, but these are all input information that are provided to the settlement process and have to be provided in an accurate manner, that the settlement process will go smoothly. One key topic for us is the mobile support. Why? Because we have to have accurate data available that is validated right on the site, that the customer by the driver, and together with the customer to avoid any issues in the follow-up processing.

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Why do we do that? Our key point is the collaboration with the customers. It's the customer focus. So next to the normal delivery execution, the normal DSD process, we want to provide value-added services to the customer and fulfill any additional demands. We want to avoid the stock-out at the customer. Kevin has mentioned that. And we want to support any mixed scenarios where the DSD person is not only a delivery driver but also a merchandiser, an order taker, order person that does any validation of equipment at the customer. We also want to gain customer insight, as our DSD person is the first contact to the customer, and he has first-hand inside information on the market. We have now direct access to the customer and to all contact we have with him. And the DSD process allows us to serve a variety of customers and a variety of channels at the same time. From a process perspective, we want to increase our accuracy in the entire distribution chain and in our entire supply chain. We want to avoid any losses that can happen in terms of products, returns and cash. And also, as mentioned by Kevin, we want to achieve a better utilization of the asset and the people and improve efficiency, and that's extremely important for us in the high-labor cost markets. Sure, we want to also manage any customer credit information to avoid losses of product or cash with these customers. As mentioned earlier, we are in the food and beverage business. We have to be compliant with any regulations. So they have to ensure tracking and tracing and batch management. We have to be compliant of certain rules and regulations that are different in the various markets, and we have to be able to create legally-binding documents at the customer site immediately. So this enable us a 360 degrees collaboration with our retail partners and provides additional insight. Sure, we also want to gain something out of it. We think that we gain a competitive advantage during the process and can optimize the costs of logistics by doing that in an optimized way and providing the right information at any given time. When we look at the total time we spend at the customer, we have certain parts that we can't really manage. Not all of the information can be managed directly. But the goal is to increase the in-out execution time of the driver; and therefore, we need advanced and modern processes to allow the driver to direct as much of the customer in the DSD process as possible. So that means we have to eliminate all manual steps wherever it is possible. We have to allow automatic processing as good as it can be. We have to increase the utilization for the driver and for the helper. We have to be able to create documents on-site and legally binding documents. And we have to make sure that all the data validates automatically before creating these documents to avoid any revert. Another topic, as you can see here in the slide, is the wait time. In the DSD operation, we hardly can influence the wait time immediately, but we have the option to capture any wait time and disruptive times to roll that back into a later analysis and being able to work on our optimization processes. This can be only done when we have the ability to capture wait times right on the ground and detecting the reasons why we have any waiting times. This has been part of our key initiatives over the last couple of years, and we're constantly working on improving these processes. I think I overspent my time a little bit. Sorry for that, and I want to hand over to Ramin to take a look at the Accenture CAS process.

Ramin Shariatmadari
Thank you very much, Lutz. Welcome, everybody, my name is Ramin Shariatmadari.

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My part is, very briefly, to provide you an overview of the Accenture CAS solution offering, especially for DSD. As you can see on the slide, on an aggregated level, this is the portfolio of the Accenture CAS solution offering. You see here many areas which you already know and what Accenture CAS is popular for, like trade promotion management and trade promotion optimization, retail execution, sales force as well as customer service and the reporting analytics. What maybe some of you don't know yet is that Accenture CAS has understood that there is a certain market demand for an adequate DSD solution which has not really been fulfilled in the past. So we decided last year to establish a separate DSD product derived of our existing solution portfolio. It has to be mentioned that this solution offering is embedded in the same solution core as all the other portfolio areas like TPM/TPO, retail execution, customer service as well as the reporting and analytics. Meaning from that perspective, it's a highly flexible or quite flexible configuration solution so you can, on demand, pull functionality from one or the other areas in the DSD solution. What I would like to do now is to go one level deeper and focus a little bit more on the DSD. So as you can see, here is an overview of the DSD process and our Accenture CAS solution support in these areas. As you might see there are some areas grayed out, meaning mainly at this point of time, our current solution support focus is on the front end application meaning the tour itself. Starting here on the right side and going quickly through the different points, our support starts with the check out, meaning checking the vehicle in terms of any defects or time measurement. This includes, of course, checking out of cash as well as checking out the inventory, here we support various types of checkout. Blind check out, non-blind check out and so on. Coming to the tour, also here we support various areas as we can see on high level. In general, this can be summarized that we support both sides of the DSD business process. As the speakers before me mentioned, this includes, both the logistics as well as the sales and marketing side. We support the logistics in terms of delivering presold products, the delivery of unsold products, for example in a van sales scenario. We support the return and the empties management, printing invoices, delivery notes. But we also support the sales and marketing processes, such as doing store audits, capturing competitive information on store level or any other audit that you want to take in the store itself. Or to perform other tasks like tracking of equipment, validating equipment numbers, cash collection, and so on. After the tour and similar to the check-out, theres a check-in which we also support. Here we support various steps and different matters and variants meaning the checking of the truckload, the pre-settlement, checking of the inventory in terms of quality and quantity, measuring the time, as well as checking in of cash. To summarize and to also provide some screen shots of our solution which you see on the right: It is a highly usable DSD solution designed for good use on a daily business with process guided navigation for the various users, the various setups of different roles. Lutz cited these roles before: these include several such as presales, order taking, van sales and delivery driver. We further support the entry through keyboard or touch screen or bar code. We also support a certain way the capturing of data fast like a quick entry.

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As cited, we support both the logistics and the sales and marketing processes in DSD the DSD process, which is not very common among other DSD solutions. We said at the beginning we have a highly flexible and configurable solution due to being embedded also in the core, meaning that the retail execution SFA functionality is available on demand. We do have capabilities in offline and online on demand. We do support flexible printing, in various ways. We have numerous out of box printing templates which can be used and adapted to your specific needs. We also have e-Signature support, and efficient archiving functionality and much more. Again this was just to summarize some highlights and key functionality of the solution.

Gary Adams
Thank you Ramin and gentlemen, a very, very interesting topic and we're getting a lot of questions coming in via the chat room. So let me get right to those. And again thank you for great presentations and content. The first question, I guess I want to go back to some of your commentary, Kevin. I've had a couple of requests come in more specific to are there retailers today that you're aware of and can you share the names of those retailers with us who are really embracing this more collaborative approach and concept and are actually working with some manufacturers to make some of these new insights-driven decisions take precedence in the business side of running their businesses.

Kevin Sterneckert
Thank you, Gary and for the question. This is actually a great question. So yes is the answer to your question directly. However, it's done in two different ways. We see retailers who are sharing detailed transaction data with manufacturers on a more regular basis than we've ever seen before. So the transaction side is increasing in what is shared. However, it appears there are two different strategies when it comes to sharing the insight. There are companies who are sharing the insights freely and providing that additional value that I mentioned. There are also companies who are choosing to monetize these insights and provide them to their trading partners for a fee. And I think that you will likely understand that this is probably a short term opportunity as more retailers begin to have more insights and more manufacturers look to figure out how they can gain those insights without paying for it. Now that said, generating the insight is not free. It costs money to do it. And I think thats always been a challenge between trading partners is who pays for the capabilities that generates the valuable information whether it be data, transactions or insights. And I think there is still some jockeying about how to make that happen. But we see companies like Target and Kroger and Safeway and Best Buy and others who are sharing information with their trading partners and using it in a variety of ways. Now in this open forum for the audience it would be inappropriate for me to peg which retailer is choosing which approach, but I'll just leave it as there are appearing to be two types of approaches and there are a caution of retailers that I've shared that are using one of those two approaches.

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Gary Adams
Thank you. Very fair answer, I appreciate that. I had a question specific that I'd like Lutz to respond to first but then Ramin I want you to respond to as well. A question has come in from a couple of folks around, the definition and the difference between consumers and customers. Again maybe something we should have said at the front end of this but if you could give a quick understanding of how Coca-Cola defines the consumer versus the customer and Ramin similar to how Accenture CAS looks at that, that would be much appreciated.

Lutz von Nida

OK. Then I take it first. Thank you. For us as a company we usually sell to retail outlets or other guys like restaurants, casinos, hotels, hyper market and so on which are our customers. These guys further sell it to the consumers. So our main action is to the customers through who receive certain business processes of where we have, for example direct interaction to the consumers which for example is the full service lending business. But our main business is selling to people that then further sell to the people that finally consume the drink.

Ramin Shariatmadari
Yes, I fully agree with Lutz. Just to repeat, the customer is basically a business customer or reseller, whether it is a store, an outlet or just a vending machine, and the consumer is the final end user, and the end user drinks the product.

Gary Adams
Great. Next question. Again, this one is very specific to you Lutz and Coca-Colas thinking, but a couple people have asked, you know what is the Coca-Cola platform, and what is your global strategy, you know for rolling out that platform to as many markets as possible so to speak?

Lutz von Nida

OK, so first of all our goal is to provide a technology platform for the DSD process and make it available as part of The CocaCola Company franchise leadership. Make it available to all these bottlers. And what we plan is to build this platform based on software integrated to our back office tools. And we focus on the back office in most of the areas but work together with the bottlers in a collaborative approach to build this platform. We call it a co-ownership between solution development of The Coca-Cola Company and the bottlers participating in that program. Sure our goal is to build an advanced solution and yes it will take a certain time to deploy that to a large bottler community as we have existing solutions in the market. But we clearly think that an advanced solution can provide truly competitive advantage. And especially as more and more markets now arise from developing markets into mature markets. So here the advanced platform is very important.

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That, the other topic you mentioned how to ramp it up, getting back to ramping up the solution. So our goal is to work on the platform and be able to provide that as soon as possible to our partners to The Coca-Cola Company franchise bottlers for pilot installations to detect in a proof of concept the real value that comes out of the solution in a specific market. And then being able to also close or bridge possible gaps. And this is an approach. We have successful piloted with the sales force automation tool in two markets already, and we definitely will move forward with this approach. I hope that answers the question.

Gary Adams
Absolutely. Great answer. Weve got a few more minutes. I wanted to jump back to one quick question for Kevin based on what he may be seeing in the industry space, but the questions come in, what innovative ways are manufacturers using to capture consumer shopper information at a store level, things like profile, purchases, sentiment, etc. Whats that platform beginning to evolve like. What are people doing?

Kevin Sterneckert
I think some of the innovation is coming from utilizing and analyzing the transaction data and POS data that retailers are sharing. There are a few trade networks that are beginning to emerge that are what you would consider the next generation where manufacturers are able to receive the insights and the data and be able to run analytics to provide not only information for the retailers but also on how they might propose different promotions or offers or deals or invoice discounts. Additionally its interesting, manufacturers are also going direct to consumer utilizing social networks and receiving feedback and insights through that channel of information. And some very interesting insights are beginning to emerge not only about the brands, but also, you know what does the customer really care about when they think about this category of merchandise? Where a traditional, say decision tree might provide insights about certain aspects of the buying process, manufacturers are learning that consumers also have additional areas of focus when they think about what they buy and why they buy it. And so we see a marriage of the traditional transaction data and also the social unstructured data that is proliferating the marketplace.

Gary Adams
Great. Thank you. Well weve come to the top of the hour, and again wanted to thank you, Kevin and Lutz and Ramin for great presentations. I want to thank all of the attendees who took the time out of their very busy days regardless what time of the day to sit in and listen to this. Thank you. Take care everybody.

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