Across the FMCG industry, sales growth is directly tied to overall company growth, as 50% of all the value created by an FMCG company rests on the sales force. Driving next-generation sales growth will require CPG companies to develop advanced insight, agility, and technology capabilities. An industry survey shows that brands willing to shakeup their traditional sales models and embrace these next-gen capabilities are growing their revenue at twice the rate of GDP. The survey also shows that that top-performing sales organizations have developed and perfected the ability to make data-driven decisions at scale.
An analysis of these top-performing organizations show that their sales teams base at least 60% of their decisions on relevant market data, while laggard companies base a startling 70% of their decisions on gut feeling. Unfortunately, the vast majority of FMCG sales teams in emerging markets, up to 58%, still rely on gut instincts and personal relationships with retailers to drive sales.
This over-reliance on instinct and personal relationships rather than data-driven decision-making, can lead to inconsistent sales performance across the organization. Available research shows that focusing on data-driven decision-making provides a 2–5% sales boost and integrating analytics into the sales process can deliver a 10–20% boost in productivity.
Therefore,FMCG brands must leverage data-driven decision-making at scale to gain a strategic advantage over their competition, increase market share and drive growth. This is especially important for sales reps, as they, in many cases, represent the only contact retailers and sellers have with the brand.
Why data-driven decision-making is key for your FMCG brand
Over the last few years, the consumer-goods industry has experienced significant change.The pandemic has revealed the inefficiencies in the traditional FMCG sales model and amplified many trends that have been disrupting the industry for close to a decade. As demand and consumption patterns change rapidly, gut feeling and instinct are no longer enough to predict where the demand for products is or guarantee sales growth.
An analysis of the fastest-growing CPG companies shows that they invest in centralized data analytics 19% more than the slow-growing companies. By clustering workflow integration, data science, business intelligence, and other cross-functional skill sets, sales teams can identify new growth opportunities faster, iterate, and exploit them at scale. Sales leaders that build data analytics capabilities also report greater confidence in their ability to harness the incredible potential of available data and analytics to drive consistent sales growth, and are 1.4x more likely to outperform the competition.
Driving data-driven decision making at scale for FMCG sales teams
Having established the importance of data-driven decision-making among FMCG sales teams, the next question is, where do you begin? Several data-analytics solutions on the market promise to provide the insights you need but choosing the best solution for your brand can be tricky. Furthermore, you must select a solution that is easy to use and will be widely adopted across the entire salesforce. Many digital transformations eventually fail due to a lack of adoption by sales reps who find the solution too complicated or cumbersome to use.
To choose the best solution that will enable data-driven decision-making at scale, FMCG sales leaders must first look inwards to determine what data type is the most relevant to driving sales growth. As an FMCG brand in an emerging market, your sales teams need to know:
- Where the demand for your product is: Under the traditional distribution chain, sales representatives must physically visit merchants to know if they are out of stock and if the products are in demand.Thus, sales leaders lack real-time data on where the demand for each product is and must depend on legacy data, which makes data-driven decision-making in real-time almost impossible.
- Who is buying your product: The traditional retail market is largely informal, with 80% of all FMCG trades occurring at small shops, kiosks,and stores. Reaching these small merchants often depends on personal sales relationships with sales representatives. Unfortunately, sales force turnover is the highest in the FMCG industry at 35%, and the departure of a sales rep can mean the loss of multiple retailers or merchants. The manual reporting system often employed in FMCG sales teams also means that leaders are in the dark as to who is buying their products and lack the data to create targeted growth campaigns and promotions.
- How often your products are bought: In many cases, sales velocity and frequency is determined by how often a sales representative can visit a merchant. However, available data shows that many retail outlets are severely underserved with limited direct coverage from sales reps. Without real-time visibility into sales volume and velocity, the sales team cannot identify and maximize any growth opportunities that exist in the market.
Your FMCG brand needs a solution that provides the sales team with real-time, in-depth visibility across the distribution chain to increase data-driven decisions and drive sales growth. The solution must also integrate seamlessly with your existing technology stack and be easily adopted by sales reps, many of whom may not be technically sophisticated.
The only platform that combines all these features is open commerce.
Make better,data-driven decisions with open commerce
Open commerce is a new type of digital commerce that will revolutionize how FMCG brands, distributors and retailers buy, sell, and pay for products. The traditional e-commerce model is broken, as it is heavily centralized and controlled by a small number of players who restrict brands and merchants from trading directly with each other.
Under traditional e-commerce, brands are often blocked from seeing who is buying their products and cannot create targeted campaigns to drive sales. With open commerce, FMCG brands, retailers, and merchants can trade directly on an open platform without any artificial restrictions enforced by the platform.
RedCloud has built the world’s open commerce platform, Red101 Market. With this revolutionary platform, brands in emerging markets gain full visibility across their distribution chain and can see where the demand for their products is,who is buying their products, and the micro-consumption patterns in the market.
The Red101 Market app allows merchants and retailers to directly order stock from the manufacturer without needing a visit from sales reps, leading to a massive boost in productivity as reps can now spend more time on revenue-generating activities. Our open commerce platform also provides real-time sales data atPOS, analyzes the data, and makes it accessible to the entire sales team on easily customizable dashboards. This enables sales reps to make more data-driven decisions and identify growth opportunities in real-time. With real-time, actionable data at their fingertips, sales leaders can also create target promotions and campaigns that drive sales growth.
Schedule a demo today to see how RedCloud can help your FMCG brand make more data-driven decisions and increase sales by up to 25%.