British beverage company Diageo is the largest producer of spirits in the world and owner of some of the world's most storied brands, including Gordon's, Smirnoff, Bailey's, Captain Morgan and Johnnie Walker - as well as alcoholic megabrands Guinness and Pimm's among others. Tradition is a byword at Diageo, but so is innovation.
"A lot of our brands are 300 or 400 years old, or even older than that," says Venky Balakrishnan Iyer, global vice president, Digital Innovation, Diageo. "There's a lot of craft and tradition that goes into creating our products. What we're trying to do here is take the latest innovations and see how we can take something that's special already and make it a richer consumer experience."
"By taking a customer-centric approach we are taking a leadership role in driving significant tranformation across the company," he said. "I ensure that all IT and shared service functions are focused on the consumer; I see no reason why they should be viewed separately from the business."
Franz also said that "our customers and consumers want personalised services at any time and anywhere via their preferred communication channels" - which underpinned the organisation's new focus.
Johnnie Walker is a case in point of this attention on the customer experience. Nearly 200 years ago, John "Johnnie" Walker started selling his Walker's Kilmarnock Whisky in his grocer's shop. And 150 years ago, his son Alexander started selling Walker's Old Highland, the company first blended Scotch whisky. Johnnie Walker is now the most widely distributed brand of blended Scotch in the world, with annual sales in excess of 130 million bottles.
Johnnie Walk Blue gets smarter
The brand and its iconic square bottle - first introduced in 1870 - is well-known nearly everywhere. But it may be time for that bottle, or more specifically its label, to change with the times. At the Mobile World Congress in Barcelona this past March, Diageo and partner Thinfilm Electronics introduced a prototype "smart bottle" for the flagship Johnnie Walker Blue Label whisky.
The smart bottle features a printed sensor tag made with Thinfilm's OpenSense technology. It can detect the sealed and opened state of each bottle. OpenSense uses smartphones' Near Field Communication (NFC) capabilities, allowing Diageo to send personalised communications to consumers who read the tags with their smartphones.
"Although these are very traditional product categories, there is a huge amount of digital interaction that is happening with our products," Balakrishnan says. "These are people standing in stores or bars and wondering whether they buy the single malt or the blend, highland or lowland."
In fact, he says, Diageo sees millions of searches about its brands occurring, and more than 50% of those searches happen through mobile within a few feet of the bottle on the shelf. Communicating with those consumers at the point of sale is a major push for Diageo, Balakrishnan says. But Thinfilm's technology goes even further, because it can detect the closed or opened state of the bottle.
Diageo wants to continue communicating with the consumer once the bottle has been opened, but it wants that interaction to be responsive. Once the bottle is opened, it's not about presenting sales information anymore.
"We know the bottle opening event has occurred," he says. "Our communication can change from guiding the consumer on which bottle to buy to how to best enjoy this product."
Tracking the supply chain
Diageo is primarily focused on the marketing elements of the technology, but it also has application in the supply chain. Companies with products equipped with Thinfilm sensor tags can track those products across the supply chain, in-store and to the point of consumption, with the sensor tags remaining readable even when the factory seal has been broken. This provides an additional layer of security to protect the authenticity of the product.
Thinfilm's sensor tags consist of an antenna and an integrated circuit (IC) printed on a label, says Matthew Bright, director of Product & Technical Marketing at Thinfilm and chair of the Retail Working Group at the NFC Forum. They have an engineered weak point that is designed to break when the seal of the container is broken, changing the information transmitted by the circuit.
Each tag has a unique identifier encoded by Thinfilm and is 100% read-only, making them very difficult to clone. Bright notes that Thinfilm uses partially randomised non-sequential identifiers using very large numbers.
"We can identify a trillion products a year every year for a trillion years without duplication," he says.
The technology could help detect counterfeiting, he adds. For instance, counterfeiting in the cosmetics world is a known problem. The product in a cosmetics container could be replaced with something that's inferior or even dangerous, Bright says. With Thinfilm's OpenSense technology, companies can track their product through the supply chain and detect whether containers have been opened prior to sale. The technology can also help with diversion, where a product is intended for sale in one geography, but then diverted to another location where it can be sold for a higher price.
Smart labels can even be manufactured with temperature sensors that can detect if a product, like vaccines, goes beyond a set temperature range, Bright says.
But for Diageo, it's all about beverages, and the smart label is just the tip of a larger ice berg. Diageo has been working with EVRYTHNG, a software company which specialises in an Internet of Things (IoT) smart products platform intended to connect consumer products to the Web, helping manufacturers manage real-time data associated with those products to drive applications.
The Web of Things creates a network of data
EVRYTHNG helped Diageo build a strategic technology platform called +More that runs on EVRYTHNG's engine. +More allows digital interaction with retailers and other supply partners based on how products are made, sold and used. Diageo is using the platform for a range applications that allow it to track products in the supply chain and deliver interaction analytics.
Niall Murphy, co-founder and CEO of EVRYTHNG, says the mission is about more than IoT, it's about creating the Web of Things.
"The Internet of Things is about how stuff gets connected," he says. "The Web of Things is about how things are connected in a broader network. How stuff is getting connected is the least interesting part of the whole puzzle. The value arises as a consequence of the data getting connected."
When an inventory item is connected to the Internet of Things, it becomes a data generator, Murphy explains.
"From a CIO's point of view, the operational capability of the business can become informed by its assets," he says.
That means consumer products can help you instrument your supply chain and inform you about the performance of products in the field, or the LED lights in a building could detect the amount of daylight in a room and dynamically throttle their output for maximum energy efficiency.
"When products become smart it's transformative to the enterprise providing those products," Murphy says. "What is a product? It used to be defined as being a physical thing. Now it's a combination of physical capability, software capability and data."
Leveraging the cloud-based EVRYTHNG Engine, Diageo used APIs and web services to integrate its +More marketing platform with internal global ERP and CRM systems, external agencies, developers and social networks. As a result, it can manage each OpenSense-equipped smart bottle's unique identity and associated dynamic data, allowing it to trigger "in-the-moment" marketing experiences and capture real-time supply chain analytics.