Consumer goods (CG) companies may be increasingly going Direct to Consumer, but the Wipro CGT survey has shown that currently, retailers and distributors contribute 76 percent to CG company revenues. Not only that, CG companies expect this trend to continue and think that 68 percent of their revenues will still be routed through retailers in five years’ time. So it makes business sense for them to interact with the retailer on a continuous basis: receiving and passing on information, collaborating to create demand and so on. Mobility has made this collaboration that much easier.
The survey also indicated the digital interaction levels of CG companies with other participants in the value chain. Of the companies surveyed, 53 percent said that they communicated digitally with suppliers. Likewise, 71 percent, 44 percent and 60 percent interacted digitally with wholesalers, agents and retailers respectively. However, I think that Business-to-Business (B2B) mobility solutions have still not attained the maturity levels of Business-to-Enterprise (B2E) solutions. At the same time, I also see CG companies becoming increasingly aware of the need for stepping up their mobility-based collaboration initiatives, especially with retailers, and approaching technology companies for advanced solutions.
CG manufacturers have always depended on retailers for shopper and consumer data, the caveat being that information came in with a time lag. Advanced technology solutions have changed that. Today, retailers transmit POS and loyalty card data instantaneously, while CG players develop real-time insights and share it with retailers right away. With mobility solutions, they can take this a step further: any bit of information can be accessed anytime, anywhere and on any device. The next step is to build common mobile dashboards that allow joint performance monitoring and help discover new sales opportunities for both.
Several CG companies and retailers are also carrying out mobile-based co-marketing activities. For instance, they are collaborating in the social space that has now gone mostly mobile. Last year, a study by IDC found that retailers led all verticals in social media investments. Many retailers have an established social media presence and CG companies are teaming up with them. Together, they are sifting through the combined data trove and gleaning real-time actionable insights.
Mobility solutions are also gaining ground in trade promotion. For instance, CG companies communicate common as well as store-specific trade promotion plans to retailers, inform about changes and ensure compliance, all in real-time. I also see several companies and retailers jointly leveraging precision marketing tools to beam real-time contextual offers to shoppers in stores. Many of them are working together on location-based and loyalty-based mobile coupons as well.
Retailers can also harness mobility solutions to draw on consumers’ in-store behavior, further influencing it to the advantage of both retailer and CG manufacturer. Say the tracking mechanism in the store indicates that a shopper has picked up soup packets. She can be sent text messages recommending bread sticks of the same brand.
These are some of my thoughts on leveraging mobility to create a win-win for CG companies and retailers. Can you think of other likely areas of collaboration?