Keep Your Customers Close, But Retailers Closer
Companies are facing disruptions in their established FMCG supply chains, distribution networks and retail reach strategies because of the continued partial lockdown to control COVID-19. E-commerce is gaining ground, and several FMCG companies are working directly with delivery partners to reach the doorsteps of their customers. However, traditional trade, with its 10.2 million FMCG outlets, will regain a large part of its dominance once the situation eases up.
While rethinking their reach strategy under changed circumstances, sales teams are intuitively focusing on COVID-free green zones, pockets that have a high demand in certain categories, and the selection of the right stores. These may no longer be enough.
LEADER AND CHALLENGER BRANDS DIFFER IN DEGREES WHEN IT COMES TO RECRUITING STORES
Both leader brands and challenger brands are guilty of pushing retailers to over-stock. However, while leader brands keep ~40% higher stock than the average potential, challenger brands often stock 90% in excess, resulting in a corresponding reflection on retention rates of new stores. Assessing the potential of newly recruited stores and stocking just the right quantity, goes a long way in ensuring a higher likelihood of retention.