"Coca-Cola 100 Won Discount When Bought at Night"... Japan Introduces Dynamic Pricing System in Vending Machines

Remote Control from Headquarters According to Time Zone
'Boksungamul' Irohas 130 Yen → 120 Yen

Japan Coca-Cola is introducing a dynamic pricing system for beverage vending machines. As a pilot project, the price of beverages sold at vending machines during nighttime will be discounted by 10 yen. This strategy aims to respond immediately to demand fluctuations depending on the time and location. There are expectations that this will lead to changes in pricing strategies in the retail industry in the future.

On the 14th, Nihon Keizai Shimbun (Nikkei) reported that Coca-Cola Bottlers Japan Inc. (CCBJI) plans to introduce a dynamic pricing system for beverage vending machines. The dynamic pricing system allows the headquarters to freely raise or lower prices according to demand, location, and time. It is mainly used in industries with large demand fluctuations such as airlines and hotels.

CCBJI will implement this system by lowering the price of beverages sold at Coca-Cola vending machines by 10 yen (91 won) during nighttime. The 540ml PET bottle beverage from the brand I Lohas, famous in Korea as 'Boksungamul' (Peach Water), will be sold from 130 yen to 120 yen from nighttime until early morning. When the price is reduced, the vending machine button will display a 'Price Down' sign to indicate the discount.

According to the results of a pilot experiment conducted internally by CCBJI since May, the introduction of this dynamic pricing system led to growth in both quantity sold and sales revenue.

CCBJI plans to implement this system in thousands of vending machines within this year. CCBJI owns the largest number of vending machines across Japan, totaling 700,000 units. CCBJI’s vending machines account for 30% of all vending machines in Japan. Among these, 60% are already equipped with modems for online inventory management. Since the modems allow remote control by headquarters, prices can be changed without significant costs. Nikkei reported, "Only parts need to be replaced to digitally display prices. The dynamic pricing system can be introduced without large-scale facility investments." However, CCBJI has not yet announced the exact discount times or timing.

Beverage vending machine of Japan Coca-Cola Bottlers Japan. (Photo by Japan Coca-Cola)

The dynamic pricing system for vending machines is expected to become a new pricing competition strategy in the beverage market. In the case of CCBJI, about 20% of consumers purchase their beverages through vending machines. Moreover, vending machine beverages can be sold at uniform prices, resulting in higher profit per unit than at marts or supermarkets.

CCBJI has struggled to generate profits in recent years due to increased logistics costs for replenishing vending machine beverages. Since distributors are required to unify prices uniformly, it was practically impossible to respond to demand changes based on location or time.

Japanese media are paying close attention to how CCBJI’s experiment might change the landscape of the beverage market. Nikkei stated, “CCBJI’s new system, with the largest vending machine network in the country, will be a turning point in pricing strategies for Japanese companies.”