Welcome Guest to Happi

Subscribe Free: Magazine | eNewsletter

current issue December 2014
 •  Charlotte Tilbury Channels Hollywood  •  Croda Reveals Findings on Volarest FL  •  Lubrizol Joins Roundtable on Sustainable Palm Oil  •  Antitrust Regulator in France Fines Major Companies  •  Paradigm Science‚Äôs Cervino Wins Award
Print

Agile Selling



Take the indirect channel model to the next level.



By Robert Wollan, Naveen Jain and Michael Heald, Accenture



Published May 21, 2013
Related Searches: brand products media levels
Post a comment
Selling diapers, toiletries, dog food, snacks and other consumer goods used to follow a standard playbook:use a wide variety of analytics and sales criteria to identify the likely consumers in a target market, get your products on a local retailer’s shelves, and then spend money in advertising, mass couponing and retail channel promotions to drive consumers to purchase.

Unfortunately, most playbooks are not changing as quickly, or as dramatically, as the consumers and markets they target. Consumer demographics are shifting rapidly, with dizzying growth in the sheer number of consumers globally and the rise of a more dynamic and less-predictable middle class in emerging markets. New levels of online comparisons and consumer switching in mature markets show the unprecedented levels of power and influence consumers have gained. And, given emerging markets’ robust growth and the concurrent saturation of mature markets, consumer goods manufacturers are compelled to manage an expensive and uncomfortably diverse global product portfolio.

Looking upstream, commodity prices continue to be volatile. But it isn’t always possible for low-margin companies to pass higher material costs on to customers—especially given today’s tough economic climate and its effect on retail purchasing behavior.  Consumers are pickier. Generics have greater appeal as do private-label brands, which are flourishing.Private-label growth is an ongoing fact of life in the consumer goods industry, as retailers continue to increase the amount of private-label categories and shelf space. This makes it harder for branded products to compete for consumers based on traditional metrics.

What’s the solution? We believe consumer goods companies must look to new areas for answers, forging deeper, more collaborative relationships with a much broader ecosystem that includes partners, suppliers, vendors, co-developers and even competitors. In doing so, they can build a sales capability that is much more flexible, adaptable and responsive—evolving as necessary to meet the needs of customers in both established and new markets.We call this agile selling.

Of course, consumer goods manufacturers long have relied on channel partners to reach their customers. Agile selling takes indirect selling to a new level of collaboration characterized by several key practices.

For instance, companies that have embraced agile selling often excel at applying analytics to understand the effectiveness of specific channels and routes to market, and to ensure that each step and partner in the sales process may contribute to ROI. They also recognize the importance of giving channel partners access to what they need—tools, data, training and insights—thus incentivizing those partners to profitably sell the company’s products instead of competitors’ products.

With more end customers embracing digital channels, agile selling proponents excel at creating compelling online experiences—and often use digital channels (as well as other techniques) to more deeply engage intermediaries and customers. And, perhaps most important, companies that have adopted the agile selling model recognize that “dynamic ecosystems” are becoming increasingly important to their ability to achieve business goals. Thus, they’re continuously looking for ways to redefine channel boundaries and develop relationships with new partners.

Some of the most successful consumer goods manufacturers have developed leading edge agile selling capabilities that are helping them thrive in today’s complex, often volatile world. These capabilities enable leaders to implement a variety of sales-related innovations that help them extend their reach and capitalize on new growth opportunities.

Build multiple routes to market: Consumer goods leaders have become extremely adept at selling through various types of distribution. Retail consolidation in developed markets often means that these companies’ sales efforts are becoming more concentrated. In emerging markets, top manufacturers are more likely to use numerous channels, some of which have been orchestrated in-house (field sales, direct store delivery, van selling) and others through third parties or multiple parties (distributors, wholesalers, independents).

Constantly measure sales effectiveness: Leaders have processes and systems that provide accurate windows into what is happening at the point of sale. On the process side, teams of merchandisers assess product/shelf compliance in larger retail outlets. On the technology side, new POS-analysis capabilities help leaders refine product mixes, devise better sales forecasts, enhance supply chain execution, assess promotional effectiveness and improve overall category management.

Maximize availability: Better data captured in the field or supplied by a channel partner is helping leaders make significant improvements in product availability. More often than not, companies that excel at rapidly and accurately interpreting retail sales trends, quantifying the impact of a particular trade promotion, and understanding when (and under what conditions) out-of-stocks occur also are highly adept at determining and adjusting inventory and replenishment levels. The net effect is generally higher availability without higher costs.

Manage and optimize trade spend: Below-the-line promotional spend represents a significant proportion of the industry’s net sales value. In fact, a 1% improvement in trade spend effectiveness can create millions of dollars in bottom-line benefit for a typical manufacturer. Thus it’s no surprise that consumer goods leaders have enhanced the visibility and management of their trade spending by using advanced analytics tools instead of relying solely on their instincts and past practices. They also are using more-sophisticated tools to collaborate more tightly with channel partners, formulate promotional activities, justify expenditures and identify optimal spend levels within categories.

Increase direct-to-consumer communication: Consumer goods leaders often are pioneers in embracing new communication channels with shoppers and consumers. That’s been especially true of the digital channel, which leading consumer goods manufacturers have become masters at using to raise their visibility among and interaction with consumers.As one example: These companies were among the first to provide digital couponing and vouchers that are redeemable in-store.

The consumer goods industry has always had to deal with globalization, more complex distribution channels, and strong competition. Out of necessity, manufacturers have become adept at structuring channels and partner relationships in ways that enhance their reach and profitability. But given the rapid and far-reaching changes taking root in global markets, that may no longer be enough. By adopting agile selling, consumer goods companies can capitalize on the next step in the evolution of the indirect channel model—and, in the process, develop the capabilities that can help them find and capitalize on growth opportunities, wherever they may be.



About the Authors
Robert Wollan is global managing director of Accenture’s Sales & Customer Services practice and Naveen Jain and Michael Heald are both a managing directors in the practice. The executives are co-authors of recently published book, Selling Through Someone Else: How to Use Agile Sales Networks and Partners to Sell More.
 
 


blog comments powered by Disqus