Summer is here and the heat is on for beverage companies as they compete for consumers and retailers in the marketplace. There is a lot at stake for these companies as they target 60-70% of their sales over these three to four months, depending on the category. There are multiple levers that companies leverage to drive sales and consumption growth — new product/ variant launches, packaging and pricing innovations, and consumer communication to name a few.
While most beverage players have made significant investments in the distribution chain, these have been largely around automation, standardisation and efficiency, while the distribution infrastructure itself has been designed for in season sales.As a result of these point interventions, the beverage distribution chain has fundamentally remained unchanged. Managing reach is a challenge in season while addressing cost to serve remains an issue during the off season. High sales team attrition and low productivity levels continue to hamper beverage sales teams’ efforts. Given that the store footprint for beverages sales hasn’t increased much in recent years, the space available to a beverage player in a store is the same or has probably come down with proliferation of categories, brands, products and SKUs. Some companies have leveraged basic analytics for suggested orders/sell-in whereas the focus needs to shift towards enhancing sell-out through assortment optimisation at a store level. The other lever for influencing sell-out is through improved store execution for which beverage players deploy merchandisers. However, in the absence of a picture of success at an outlet level, it becomes nearly impossible to evaluate the effectiveness of merchandising investments and hence third party agencies are used to audit the store execution effort. All of this makes merchandising prohibitively expensive and limits the ability to drive store execution and retail engagement at scale.
Digital can play a big role in helping beverage companies address their RTM (route-to-market) challenges and potentially disrupt the beverage distribution chain. Today, it is possible to build direct-to-retail models for on-demand/top up order management, shift from trade promotions to campaigns, drive new product communication and placement and ensure on time fulfilment. Geo-marketing tools can help identify pedestrian flows or hot zones for targeted POS expansion/penetration.
Analytics can help optimise assortment and trade promotion by residential cluster, channel and outlet. Digital merchandising can enable real time image capture and KPI release for enhanced store execution while significantly reducing costs.
Gamification-led digital learning apps and digital playbooks can help build salesforce capability, engagement and productivity. While beverage players in India have traditionally focussed on category and consumer innovations, their ability to leverage RTM innovation through digital will decide on who wins the beverage war in the store.
The author is MD, consumer goods and services & lead— RTM Services for India, Accenture