May 1, 2020 | 02 min read
Route-To-Market execution in emerging markets and on-trade channels is expensive. Unfortunately, the greater the reach the brands aspire to, the more expensive is the distribution. It can impact a brand’s ability to grow and thrive.
Consumer brands have to contend with several other debilitating factors that are integral to emerging markets. Distribution inefficiency is at the top of the list. Markets in emerging economies are primarily General Trade driven and are unorganized. There is a dearth of real-time data, and along with the low adoption of tech, capturing relevant data is even harder. It’s a vicious cycle.
Brands, therefore, suffer from the lack of visibility in unorganized channels including on-trade and traditional trade channels. Also, choosing the right distribution channel is as critical as pricing the product correctly. In emerging economies, there are several touchpoints before reaching the consumer. The quantum of errors increases at each touchpoint leading to inaccuracies in order fulfilment. Such inefficiencies in the supply chain only increase the cost for brands.
Such constraints within retail ecosystems of emerging economies make it exigent for brands to drive transparency in their supply chains. For instance, European stores fare far better than those in emerging markets. Developed markets have moved to direct distribution with technology enabling all forms of transactions between the brand and the retailer. This means, retailers typically don’t have to worry about overstocking and brands have visibility into POS sales and stocks at the retail store.
In emerging markets, brands are unable to offload costs because people are not buying. But the real barriers to gaining visibility come from the reluctance of distributors to share data. They fear losing autonomy or aren’t digitised to capture data. Without insight into tertiary sales, brands cannot forecast better for their downstream supply chain. It also impacts upstream supply chains where they cannot plan their production.
A Retailer App can plug the holes in visibility for brands. It allows retailers to send their orders directly to the brand. This demand data over time will help brands to forecast accurately, increase accuracies in order fulfilment, reduce delivery times and also better plan their production. It also empowers retailers to service their customers better by having the right products in the right quantity at the right time.
More currently, the Coronavirus pandemic has also brought the need for contactless direct distribution. This challenge can be addressed through a combination of Retailer App, Distribution Management Systems and Retail Analytics. The data aggregated from the retail intelligence platforms can help brands to predict demand, get a better share of shelves, empower sales reps with insights like with suggested orders, ensure planogram effectiveness on the field and others.
To summarise quickly, brands should aim at digitising retailers, connecting inventory positions across the supply chain, fulfil orders by integrating the supply chain through distribution solutions. Here are three simple steps to consider:
Step 1: Digitise retailers and distributors through simple integrated distribution solutions
Step 2: Start collecting data to gain visibility
Step 3: Use data to make more intelligent decisions. For e.g. what replenishment should be done both for distributors and retailers?
With such interventions, brands can bring analytical capabilities, especially forecasting in terms of inventory positions at every touchpoint in their supply chains, and understanding turnover ratios among others.
Bizom’s retail intelligence platform enables brands to drive effective distribution strategies through a range of AI & digital capabilities. Our solutions can help digitise the distribution network and optimise operations for brands. The following infographic says it succinctly.