Consumer is probably the most important word in ‘Consumer Product Goods’ or CPG companies and it has never been more true than today. As the consumer goods companies try to drive growth in emerging markets or maintain market share in mature markets, the most important task that they have at hand is ‘Consumer engagement’ – it is both a challenge and an opportunity to ensure their survival. The brand equity that CPG companies are used to, is becoming less and less influential, especially with the newer generation of consumers. As these consumer dynamics evolve, the way we make our purchase decisions are changing. The factors that are more important to us vary widely which means that engaging with consumers in their voice is even more critical. Hence it is no surprise that every single consumer goods company, in fact every customer centric organisation, is trying to get closer to the consumer. We all are trying to get to know our consumers better, get our products or services in front of the right consumer at the right time at the right place and to top it all, try to do this all of the time – No mean task!
I have seen many strategies being applied to achieve this – Social media engagement, Consumer insight driven targeting, AI powered consumer engagement, beautifully designed digital marketing, neighbourhood pop-up stores, in-store marketing and many more. All of these are great techniques and the innovations are getting more and more sophisticated by the day.
However, the progression of these capabilities is not directly proportional to the impact it is having on consumer engagement. In fact, due to the advancements in technology, you and 1000s of your competitors are trying to engage with consumers in every way imaginable, making it very crowded and confusing for consumers. I recently realised how many companies were trying to target me when I received over 100 GDPR e-mails – asking for my permission to use my data. A large majority of them I did not wish to engage with and this included a myriad of marketing agencies, a lot of them probably working for you. However, this does not mean that I would not like to have the exact offer I want when I want it and at the price I am willing to pay – of course I do, who doesn’t?
So what do you do, I do not profess to know all the answers but I would like to share another approach which we are using successfully to help our clients and which may work for you too.
Okay, so let’s think about this a bit differently. Imagine that on a page you have the workflow that describes how your products get to your consumer. At the bottom of the page is you, creating some of the best products in the world and on the top of the page is your consumer. This consumer is getting your product after it has gone through many number of hops across your supply chain through the hands of your partners, their partners, their partners’ partners and ultimately the retailers with whom the consumers deal with on a daily basis.
In my experience the consumer goods industry has spent the better part of the last 30 years perfecting this distribution model and I believe has the best know-how of how it works. I do not mean logistics, I am sure DHL, FedEx and many others would claim to be the best at that and they probably are. However, a consumer goods supply chain involves many different players from distributors, sub-distributors, stockists, carry forward agents, small retailers, large retailers, independent retailers, logistics companies and many more. It’s a complex model of how this trade works. Now multiply this model with number of countries you operate in and in some cases this may also change based on the category you are in e.g. Ice creams.
This complex model is what most CPG companies have been managing for many years, building networks and strong trade relationships. CPG companies hence have a level of control in this that they do not yet have in targeted consumer marketing. That relationship string was always held by the retailers who talk to the consumers daily.
We believe that you need to leverage these retailers and your trade partners far better to reach your consumers. Now I accept that the large supermarkets of the world will not want to give that control to you – I agree that you probably won’t be able to influence Walmart’s or Tesco’s of the world to hand you over this relationship. However I do not believe that this should be something you should be overly worried about as most of your growth is coming from emerging markets where traditional trade is a far bigger than modern trade. Even in developed markets the shift to convenience is helping to drive growth. Both of these channels, you can and must influence. In the UK influencing 40,000 traditional trade retailers is a far manageable challenge that influencing 50 million of us consumers.
We are already achieving with our ‘Retail Marketplace platform – Distiman’ by getting brands a step closer to their consumers. We believe our tech can help you achieve this in any market.
So how can we help you achieve this? Here are three approaches that some of our clients have done over the last 12 months
1. Leverage your home advantage –
The journey for some of our clients has started where they have directly engaged the retailers with their branded app – shifting a lot of retail execution and merchandising directly in the hands of retailers. This is allowing:
- Retailers to order directly from the brand, order as frequently as they need and get it delivered as per demand. This is driving growth for the retailers as they can have a wider range, higher stock turns and all that with reduced capital investment.
- Brands are also able to establish a relationship directly with the retailers and get them to be part of their loyalty scheme. They are having deeper engagement by appropriately incentivising them for e.g. with app only offers. This in turn is driving growth for them by having a much larger share of shelf and ensuring that they win in their focus SKUs.
Leveraging this in areas where our clients have the strongest distribution network has minimised their risk and allowed them to establish this new operating model. One of our clients, a global eye health products company, has launched this in 10,000 stores and is already achieving great results.
2. Play in the entire market –
The key to keep the retailers that you have recruited engaged in this manner and recruit more is to make their lives easy and create an environment where they will thrive. This will only happen when the mom & pop store round the corner can order anything that they want from this market place app and not just products from a single brand. Extending the app is key so that it becomes “The Retail marketplace for retailers”.
One of our clients, a very large global beverage company, has taken the plunge to be part of a new market place and exploit this new form of trade collaboration. This is taking them to an additional 20,000 stores and increase their penetration and growth with reduced investment.
We are running this as a separate business and can scale this platform with you too. By being a core player in this marketplace you will benefit from everybody benefiting and you start to play in the entire ecosystem.
3. Engage with the consumers –
Last but not the least now you have 1000s of retailers as your extended consumer service team. You are now able to drive consumers to the POS through all of your great marketing and analytics efforts. Also you can enable these stores to provide a service or a subscription to the consumers. On an average, today in the world a traditional trade store covers about 250 consumers and these stores can now help you to engage them using our tech.
We have a big dream to drive this change and make it a level playing field for the traditional trade retailers and you can benefit from this as much as they can. We are running at a million miles per hour to get there and get there we will. Question is do you want to be a part of this journey with us?