Amazon and Coca-Cola partner on niche nostalgia e-commerce
Thanks to social media, what a decade ago might have amounted to a few scattered conversations about a long-forgotten soda, instead has two commercial giants partnering to test-drive a new distribution model. Years of fervent online chatter over Surge, a soda discontinued 12 years ago, led Coca-Cola to announce earlier this week that the beverage is returning to production and that it will be available only through Amazon.
Per Coca-Cola’s blog post, Surge is "Coke’s first discontinued brand to return to the market."
The groundswell of grassroots enthusiasm for Surge over the past few years has been impressively well-organized. A Facebook "Cause" page entitled "Surge Movement" now boasts more than 140,000 followers. In 2013, the group raised $4,000 and used it to purchase a billboard near Coke headquarters agitating for the soda’s return.
Catering to the demands of this noisy niche would have been prohibitively expensive through a traditional distribution channel. But Amazon and Coca-Cola may have arrived at a heretofore unexplored way to meet the demands of a small yet vocal audience.
As the new 16 oz. cans arrive online to mass fanfare in Amazon’s review section, though, there are plenty of questions raised about the long-term value of riding this lemon/lime-flavored wave of ’90s nostalgia. It is clear from Coca-Cola’s comments that the company is paying attention to metrics and treating it like a trial run.
"If expectations are met, this may be only the first of a variety of efforts we explore to launch niche products through e-commerce relationships," said Wendy Clark, president of sparkling and strategic marketing, Coca-Cola North America, in a statement. "This will be a great learning experience for us and a refreshing opportunity for fans."
A key question, then, is what expectations Coca-Cola hopes to meet. Given the kitsch factor of a campaign to bring back a discontinued soda, it seems quite possible that the fight for Surge might prove more exciting than the product itself. If that is the case, one wonders if that is still enough to justify Coca-Cola pursuing these kinds of promotions.
Discussion Questions
Is there value in heeding the demand of social media and bringing back a defunct product the way Amazon and Coca-Cola have? What are the long-term possibilities of these sorts of niche e-commerce promotions?
Ironic or not, scarcity breeds demand. And demand can deliver a stronger price. The craft beer industry has proven this in spades as they continue to make year-over-year gains against the strongest beer brands on the planet.
Coca-Cola and Amazon are well-positioned to leverage the opportunity here. They both can control product distribution, production costs and promotional possibilities. Some products just move through the pipeline with more efficiency. Even if it is merely flavored water with an added dose of sugar.
Win-win for both Coke and Amazon.
Nostalgia products come back in vogue in different cycles. The challenge is estimating demand relative to the major go-to-market costs. The big win for Coca-Cola is very limited and targeted distribution through Amazon, without having to incur the inventory and marketing costs of distributing through normal channels.
Big win for Amazon continues to be differentiated products that they can weave into their overall strategy. The fact that grassroots customers mounted the campaign for Surge is another win for Amazon in terms of the kind of consumer traffic that it desires.
140,000 people is enough of a groundswell to bring back a discontinued brand, and it’ll be sold only online? Who buys soft drinks online?
This sounds purely like a publicity stunt. There’s clearly a niche demand for old-timey brands (look up Quisp cereal) but it doesn’t mean there’s a business model there.
Another reviewer asks, “who buys soft drinks online?”
I respond: Why wouldn’t you buy soft drinks online? In this universe of one, I buy just about everything online that I can possibly get, from soft drinks to kitty litter. It’s convenient, the price is (usually) right, and selection is far greater than at brick-and-mortar stores. Also, I don’t have to haul around bulky or heavy purchases.
While I’m not planning to pick up any Surge anytime soon, I’ll continue to buy Hansen’s and other hard-to-find products at Amazon and other dot-coms. There’s no way I’m the only one.
A unique product that you can only get thru Amazon is a win for them. It is also good viral/social reaction on Coke’s part to give the people what they want.
This likely won’t be meaningful from a sales perspective, but it is beneficial from a marketing perspective.
This is not a social media play at all; it is market segmentation pure and simple. Surge was discontinued due to low sales. The brand could not keep its shelf space. This happens when only a small segment of the market purchases the brand.
Amazon is looking for new and exclusive products to sell. When a small segment of the populations favors a brand and you service that demand in a limited number of distribution centers, the result is profits. A quarter percent market share funneled through a single distributor results in significant sales and profits. No direct store delivery, only truckload. No shelf stocking, only item picking.
Coca-Cola will only have to manufacture Surge in a limited number of plants. This is the same issue for regional brands which don’t have a following outside of their region.
Yes. This is a new way of test marketing in the soda wars, and re-introducing products that were poor performers in the past, does not mean that they will not be good performers today…or perhaps not. Perhaps the offshoot of all of this is the great PR that both Amazon and Coke enjoy over a low-cost test market….
This could have real legs with the Freestyle vending machine data overlaid on Surge purchases. Can you create an opportunity to add flavors to Freestyle, and vice-versa? Identify some global (but not found in US) brands selling on Freestyle that Coke can partner with Amazon for limited runs?