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Reigniting APAC growth through improved traditional trade performance - Accenture

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Reigniting APAC growth through improved traditional trade performance - Accenture

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How can CPGs significantly grow sales at lower cost in Asia-Pacific? By improving their coverage of traditional trade in emerging markets.

Report highlights:
-- the growth opportunities in emerging markets
-- leveraging traditional trade channels and technology to grow
-- case studies

How can CPGs significantly grow sales at lower cost in Asia-Pacific? By improving their coverage of traditional trade in emerging markets.

Report highlights:
-- the growth opportunities in emerging markets
-- leveraging traditional trade channels and technology to grow
-- case studies

Publicité
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Reigniting APAC growth through improved traditional trade performance - Accenture

  1. 1. Re-igniting APAC growth through improved Traditional Trade performance September 2016
  2. 2. 2Copyright © 2016 Accenture Allrights reserved. The opportunity for a $1 Bn CPG… CPGs can significantly grow sales at lower costs 2 1 Grow sales by $100- 200 M… ...while reducing spend by $30-50M… Reach beyond traditional marketing channels Improve consumer and trade engagement Increase coverage of traditional trade Reduce marketing wastage Improved measurement of promotions Sales force control and self-enabled retailers Improved distributor mgmt and activation of trade …expanding the view on MROI 3 Focus on total returns on market facing investments
  3. 3. 3Copyright © 2016 Accenture Allrights reserved. Global CPG: FY15 Revenue (USD bn) The top 15 CPG generate $350 Bn in revenue from Emerging Markets 14% DiageoKraft Heinz 18.3 18% 82% Danone 25.6 43% 57% L’Oréal 27.4 38% 62% Mondelez 29.6 39% 61% ABInBev1 43.6 53% 47% Coca- Cola 44.3 27% 73% Unilever 57.9 58% 42% Pepsico 63.1 27% 73% Nestlé 89.0 37% 63% 70.1 J&J2 15.3 18% 82% 43% 45% 55% 57% KelloggBAT 13.5 19.3 86% ColgatePMI 16.0 50% 50% 73.9 36% 64% P&G 72.5 35% 65% Emerging Markets Developed Markets Note: Only included revenues for CGS MNCs (regional companies e.g. COFCO etc excluded). Emerging markets as defined by the company, if not available APAC, LatAm, Middles East and Africa used as a proxy. Data is for the FY15 if not available latest reported FY. 1ABInBev is currently undergoing a merger w ith SABMiller- revenues above include ABInBev only; 2Included Asia Pacific & Africa revenues(other emerging markets w ere difficult to segregate) Source: CapitalIQ, and Company reported financials
  4. 4. 4Copyright © 2016 Accenture Allrights reserved. • 10-20% Sales Uplift Potential – Reach more traders 2X+ – Increase engagementw/each trader – From 6/mins /week to daily – +10% store visit frequency – +10% increase in drop size • Extend reach into rising consumer base Unreached Potential Significant growth can be generated from extending reach and engagement ~ 20% Coverage CPG Distribution Customer Consumer Traditional Distribution Model (PUSH) 60% Trade Spend Visibility 80% Unserved traders due to traditional channel complexity: large number of small stores organised in a layered micro- distribution Limited targeting of advertising due to lack of consumer visibility Enterprise CRM (SFA, DSD and DMS) W/Sale C&C 3bn Consumers 10m Customers ~ 60% Reach (through traditional mass advertising) Direct In Direct Growth opportunity
  5. 5. 5Copyright © 2016 Accenture Allrights reserved. Emerging markets in 2019(1) For example, CPG’s could generate significant sales by more effectively covering Thailand’s 800K mom & pops Trader opportunities : • COVERAGE – Increase coverage by using direct promotions to new traders • PRODUCT PULL – Use direct, targeted promotions as a pull tool with Mom & Pop shops • SALES COST – Reduce sales calls for small traders which can be reached and can order through their mobile Thailand store coverage by select MNC’s(2) >55% >5000 24,509 38,300 41,013 47,100 221,000 225,000 >600,000 0 200,000 400,000 600,000 800,000 Total Stores ~10-20% average coverage Source: (1) PlanetRetail; Euromonitor International 2016 (2) Accenture Research and Analysis Traditional trade sales - Thailand
  6. 6. 6Copyright © 2016 Accenture Allrights reserved. Limited Distribution – select client example HUGE Uplift Potential: Sales via distributors to 200,000 outlets illustrate that 80 percent of the sales came from 20 percent of the outlets covered – 4% of the total outlet universe • The top 20 percent are a mixture of retail chains, wholesalers, and cash and carry • Long tail, the last 100,000 (51%) outlets, have a low sell-in, generating average sales of US$200 or less • Opportunity to establish direct connection with customers who purchase via cash and carry or larger stores • Opportunity to acquire new outlets • Opportunity to register existing outlets and generate sales uplift via targeted and more frequent messaging $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 160 165 170 175 180 185 190 195 200 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Average sales of top 20,000 outlets grouped by 1,000 outlets Average sales of remaining 176,000 outlets grouped by 5,000 outlets Top 10% (20,000 outlets) 65% of sales Top 20% (40,000 outlets) = 80% of sales Top 35% (75,000 outlets) = 90% of sales Last 65% (125,000 outlets) = 10% of sales
  7. 7. 7Copyright © 2016 Accenture Allrights reserved. Increasing trader coverage with trader self-service solution: Trader’s capabilities will enable CPGs to increase their trader coverage with a full trader self-service solution BRANDTONE “Pull” NEWSPAGE “Push” Trader• Expand ordering reach • Reduces costto sell Tradersynergy: • Create incentive to sign-up • Create incentive to order Costto sell TraderCoverage Low High 0% 100%50% Medium Self-service efficiency+ demand pull incentive 20% Direct selling Indirectselling
  8. 8. 8Copyright © 2016 Accenture Allrights reserved. Driving this impact will require CPGs to re-focus $200-400 M of market facing investment per $1 Bn sales Typicalspend on$1 Bn sales Currentchallenges Opportunity Advertising Promotions & premiums Sales force Trade terms • Reach limited to 60% • Wastage spend in over-exposure • Lack of consumer engagement • Inconsistentperformance and oftennegative ROI • Field sales only covering 10- 40% of mom & pop stores • Poor • Unconditional discounts with little impact on sales • Trade spend absorbedbefore reaching retailers Reach 20-40% more of consumersin a 2-way connection Engagementwith the consumeracross activities Self-service and sales force controlto cover >40% of traditional trade Better activate traditionalretailers $50-100M $50M $50M $50-200M
  9. 9. 9Copyright © 2016 Accenture Allrights reserved. Saving levers For every 1 BN EUR in revenue, CPG’s can potentially save and redirect 30M – 75M to fund growth initiatives This is based on past collaborations with: Marketing Potential savings WorkingNon-Working Brand Events Brand Promotion Sponsorship Packaging Product Dev Agency Fees Ad Production Digital Production Market Research Other Marketing Premiums Sales Samples 10-15% 5-15% 2-5% 5-15% 5-10% 2-5% 10% - 10-25% 15-20% 10-15% 5-15% Merchandiser Point of Sales Sales Brokerage Commercial Rel. Mgmt Sales Demos & Promoters Trade Events Sales Events Sales Incentives 5-30% 5-15% 5-15% 2-5% 5-10% - 5-25% 5-10% Sales Potential savings Efficient Operations Business Building Other terms 5-10% 10-15% 10-20% Trade Spend Media TV Media Buying Digital Media Outdoor Media Sponsorship 15-20% Potential savings
  10. 10. 10Copyright © 2016 Accenture Allrights reserved. Efficient and Effective Reach in Traditional Trade CPGs are deploying sophisticated tools to better serve traditional trade and achieve higher penetration at a lower cost Generate profitable growth Uplift at existing stores Increase sales Push (via sales force) Targeting and Analysis Salesforce automation/enablement Pull (via increased demand) Direct messages/offerings Online portfolio availability Reduce costs Trade spend Reduce leakage Reduce poor performing promotions Sales force costs Reduce calls Switch low-sales outlets to self-serve Acquire new stores New sales Push (new) Canvasing Pull (indirect) On-case promotions Save costs Trade spend Better used trade spend Reduce wastage Objectives How to meet them
  11. 11. 11Copyright © 2016 Accenture Allrights reserved. CPG Colombia case study – using Trader Connect* In Colombiaa CPG client generated a 5 percent revenue upliftfrom TraderConnect enrolled stores Vs non-enrolled stores; the highest increase coming from the hardest to reach smaller stores • Launched initially with 15,000 traders and rolled out to 70,000 inless than 6 months • 70 percentof total GT universe recruited in 45 days • 2.7 million contacts made with traders • Trader Connect enrolled stores on average had a higher responserate forsimilar promotions • Trader Connect enrolled stores achieved 9.2 percentrevenue uplift Vs prior year, mainly driven by increased frequencyof purchase 12.6% 11.0% 5.5% 7.7% 4.1% 2.0% Trader Connect enrolled stores Other stores Personal Care Home Care Other consumer 12.8% 11.7% 7.6% 6.5% 4.5% 5.8% 3.8% 4.3% 3.1% 2.9% Trader Connect enrolled stores Other stores $0-100k $100-200k $200-300k $300-400k > $400k Revenue growth across all categories Revenue growth across trader clusters (by revenue) de Col No. of stores 26.2k 1.8k 15.9k 7.6k 5.1k 2.1k 2.2k 1.8k 3.0k 0.9k *Financial performance, including ROI, was calculated by the client’s Colombia team
  12. 12. 12Copyright © 2016 Accenture Allrights reserved. Trader Profiling Profiling the trader base would allowus to provide valuable insights and supplement existing data set How many people visit your store daily? a) Up to 50 b) Up to 150 c) Up to 300 Do you stock Competitor Brand A at your store? Do you stock Competitor Brand B at your store? How do you expect your business to grow in the next 12 months? a) Positive sales growth b) Stay the same c) Slowing sales volumes Profiling would allow us to segment the trader base according to your business priorities Volume (Group A) Sales Growth (Group C)Mix (Group B) Trader
  13. 13. 13Copyright © 2016 Accenture Allrights reserved. Engaging with Traders Increased and targeted engagements with CPG’s customers would facilitate incremental sales growth in your traditional trade business Segment traders and create sales pull offers Segment A Segment B Segment … 1 Ongoing conversation driving J&J awareness and participation 2 3 Brand: Buy five units of Brand and win two boxes of Product for free! Trader earns their reward for complying with the terms of the offer 4 Sales growth for offered products is validated through Trader Connect reporting  Enhanced profiling enabling highly targeted calls to action  Communicated directly to the traders on their mobile  Enabling an ongoing permissioned conversation with the trader
  14. 14. 14Copyright © 2016 Accenture Allrights reserved. Targeted messages keep traders engaged and drive further sales Regular updates halved sales rep visiting times Motivational messages drive sales uplift Education drives increased assortment uplift Regular updates and timely rewards increase loyalty Hi Beth. Remember to buy more than PHP4,000 of any product in August to earn great rewards Hi Beth. You have purchased PHP2,000 worth of stock for August. Buy PHP2,000 more before the end of the month to earn your reward! Hi Beth. Did you know that Ultra Thin is now the most popular with consumers? Order yours today and receive 10 percent off your first order. Hi Beth. Congratulations you have earned your rewards for August. Your store discount will be on your next invoice. Motivate Update Educate Reward
  15. 15. 15Copyright © 2016 Accenture Allrights reserved. Trader Engagement Journey Creating a one-on-one relationship with traders with meaningful engagement would drive loyalty Beth receives an update text: “Hello Beth, halfw ay to this month’s target already. Buy another PHP2,000 by August 31 to earn great rew ards” Beth receives a text message from : “Hello Beth, congratulations on your performance last month. This month, buy PHP4,000 to earn great rew ards” At her store, she makes her first order from distributor First delivery of PHP2,000 worth of products Time for the next order. Beth orders PHP1,000 this time. Second delivery Last reminder: “Hello Beth, just a w eekto go. Order PHP1,000 by August 31 to earn great rew ards” Time for the last order. Beth orders PHP1,500 w orth of goods. Month End: “Congratulations Beth. You have exceeded your arget this month. Your discount w illbe provided on your next invoice.” Beth owns a sari-sari store in Pampanga. She has owned the shop for more than 10 years. She values being able to receive loyalty updates so that she can get the best deals on the products her customers like to buy from her.

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