FMCG Go-To-Market (GTM) Distribution Process

  

It is common practice for FMCG distributors to work on ERP-like platforms such as the Distributor Management Systems (DMS). Soon, DMSs will move from stand-alone to online platforms, much like ERP operations in organizations. This will result in benefits in productivity, ensure seamless operations and supply chain optimization, and bring in agility in responding to market demands. For the FMCG sales force to be effective in a large and diverse geography like India, they will have to operate like a military force. Clear protocols, an armory of product knowledge, predefined output expectations and clear communications throughout the chain are pertinent. Customers (retailers/outlets) are also slowly, but gradually, moving up the digital grid as the overall comfort level with technology is improving. Payment interfaces such as mobile wallets, UPI and Card POS terminals will continue to gain momentum. The startup ecosystem is experimenting with products and services around in- shop advertising, digital promotions, and e-commerce. Over the last 24 months, we have witnessed an increasing trend on several startups working on such solutions. Given the heterogeneous nature of the 8.5 million FMCG retailer universe spread across the country, digitization may not evolve with similar velocity across all segments. The last 18 months have witnessed dramatic shifts towards digitization even amongst retailers in deep, rural geographies. Almost 30% of retailers in villages (8- 10k pop) have enabled digital payment solutions. The digital journey has begun across each channel segment and there is no looking back. Analytics and digitization Digitization is, in turn, churning out huge amounts of data which FMCG companies often find complex to convert into meaningful information. Most organizations have embarked on using this data for dashboards and trackers, but this is a preliminary of usage. The future of analytics lies in multiple axes of evolution. Simplicity ensures that the target user receives only what is his/her requirement and not any other information that could clutter this absorption/impact. Customization ensures that the analytic output is customized for various individuals in the FMCG distribution chain to optimize productivity. This customization is not just limited to the levels in the chain, but also differs by different roles of individuals. This shall be further enabled by different kind of technologies available to let the target user determine the customization needed. Source dexterity - Currently, most analytics convert data from single sources to analytic dashboards. Some have evolved to clubbing multiple platforms within the organization like a company’s ERP system and DMS system and providing insights after combined data analysis. However, in the future, FMCG players should develop analytics capability that will club multiple sources of data - both internal and external - across private, public and government. For example, companies can consider clubbing census level data with internal DMS data for actionable information. Or, can juxtapose data of a village road building program with FMCG distribution footprint, to determine opportunities to increase direct reach. Platform Flexibility - Consumers are now on the move and use multiple devices/platforms to access information, seek entertainment or stay connected. Hence, analytics must be device/platform agnostic and seamless so that they enhance productivity rather than restrict it. This is a relatively well-evolved area and can be developed much faster by companies. The digital evolution is pushing and redefining boundaries, forcing FMCG companies to look beyond merely manufacturing and distributing products. It is time for FMCG players to consider digital disruption as an opportunity to improve their productivity and revenue in the short term and re-design their value chain to stay ahead in the longer term.