Location-Based Mobile Directories: The Real Thing?

Coca-Cola Fountain aims to add value to its customer proposition by offering food service customers go2's US wireless directory and information service. Does this recognition of the value of mobile commerce to its customer retention strategy by the world's largest brand mean that mobile commerce has at last become 'The Real Thing'? WirelessDevNet speaks to industry analysts and executives from both Coca-Cola and go2 Systems Inc. to find out more.

The year 2000 was much heralded as the year of the mobile internet but there has been little evidence of the sort of critical mass widely predicted. Yet, as the year draws to an end, one area that seems to be hotting up is that of location-based wireless directory services. Just last week The Coca-Cola Company and go2 Systems Inc., originator of go2(r), a leading location-based directory and information services provider for the internet and wireless devices, announced a five-year strategic alliance valued at $30M. The companies will work together to offer go2's patented location-based technology, content-rich directory and information services to Coca-Cola Fountain's food service customers. As Coca-Cola Fountain provides the lion's share of the US's 800,000 food service establishments, including fast food counters, movie concessions stalls and franchise restaurants, this deal would seem to put mobile commerce well and truly on the map, making go2 the world's largest co-brand.

Coca-Cola's choice of go2's location-based directory services was strongly influenced by go2's growing availability on major wireless networks and illustrates its belief that m-commerce is the essential next step to drive more customers as quickly as possible to their product. Tom Moore, senior vice president and general manager of Coca-Cola Fountain explains: "go2's web-based technology provides a platform from which we are able to assist our food service customers in growing food and beverage category sales through promotion and mobile commerce. Our alliance with go2 allows us to provide the food service customers that we serve an opportunity to gain entry into the wireless space through go2's nearly universal placement with North American wireless carriers".

go2's powerful, patented technology and products, accessible via both wireless and traditional online applications, will connect consumers with food service locations by providing them easy access to addresses, driving directions, one-click calling, a suite of wireless specials, coupons and discounts, and a mobile commerce platform, for which go2 is currently conducting closed trials.

"We are excited over the opportunity to offer our food service customers go2's wireless locator service, as well as enhanced information and directions capabilities and, eventually, mobile commerce options," continued Moore. "The promotional opportunities here are limitless."

For go2, the deal confirms the organization's position as the leading location-based directory services provider. go2 founder and president Lee Hancock advised: "Adding Coca-Cola Fountain's food service customers to our existing customer base will help us accelerate our acceptance as the definitive source for real-world location-based information and m-commerce solutions. This partnership brings a new advertising and commerce channel to Coca-Cola and an extremely value-driven partner with a large customer base to go2."

Partnering with companies like go2 is just one element of Coca-Cola's overall digital strategy according to Jackson C. Cosey, Jr., vice president of Coca-Cola North America eBusiness eVentures group, who advised: "In addition to pursuing opportunities that provide value to our consumers and customers, it is important that we use digital solutions to deepen our relationships with employees, bottling partners and vendors. Those solutions will help us to become more agile, responsive and competitive."

The alliance comes at a time when more and more people are accessing the internet using their wireless cell phones, pagers and PDAs. While there were few U.S. wireless data subscribers at the beginning of this year, Goldman Sachs Global Equity Research estimated that the number of US mobile internet subscribers will approach 60 million users during 2003, according to the group's September 2000 report.

"The Yankee Group expects over $50 billion retail dollars to be spent using the wireless phones in the US in 2005," said Yankee Group analyst Adam Zawel. "Many more transactions will be enabled once the wireless phone is used as an intelligent product, store, and directions finder. go2 Systems, already one of the most aggressive end-user location information providers on the wireless internet, will only enhance its position by integrating more deeply with retailers' inventories and location."

According to the analyst Mark Plakias, vice president of voice and wireless commerce at The Kelsey Group, there are at least two ways to look at this deal. The first is as a major content player, giving go2 insider access to up-to-the-minute listings of thousands of fast-food locations that are highly relevant to mobile (and hungry) customers. The second way is as a triumph of business development, with go2's growing availability on major wireless networks a key factor in Coke's decision. "The model of location-aware applications combined with wireless network integration is proving to be compelling," advised Plakias.

"One of the longest-running scenarios in interactive media is pizza delivery. More pizzas have been ordered on every conceivable device from interactive television to voice portals than would feed an army of analysts. Nonetheless, the real opportunity is not at home but in the car. And the real quest is not pizza but burgers, tacos and, yes, movies. (Included in Coca-Cola Fountain's customer list is every cinema that pumps Coke.) Forget the metaphorical pizza; this is the"real thing" - a tangible, multi-billion-dollar location-sensitive opportunity that has been mined by pioneers like Vicinity for several years but is now heating up as wireless web applications move from their tentative beginnings to fully developed portals," he concluded.

So, Coca-Cola's vision and leadership in adding wireless commerce to its famous value proposition gets the thumbs up. It is "The Real Thing" according to those in the know. However, The Kelsey Group's report on this deal does not simply celebrate this wireless victory in adding value to the world's largest brand. It goes on to call for a renewed focus on workable wireless couponing, going beyond simple credit card purchasing.

"Wireless couponing will take strong technical developments to match strong business development efforts. We are confident it can be done," advised Plakias.

Nicki Hayes is a freelance writer and corporate communications consultant specialising in business to business internet issues. She has contributed editorial to a number of publications including Unstrung.com, Guardian Online, Financial Times, Banking & Financial Training, eAI Journal and Secure Computing. Nicki is also the European correspondent for The Wireless Developer Network. Nicki is based in Dublin, Ireland and also has a base in Cambridge, UK. Through her consultancy, Hayes-Singh Associates, she has access to a number of technical writers and PR consultants throughout Ireland and the UK.