Consumer package goods (CPG) companies have always had to deal with the problem of high cost to serve traditional RTM in emerging markets. The industry has also postponed its digital transformation for far too long, focusing mainly on marketing initiatives. According to Accenture companies with digital RTM capabilities achieve several tangible results in the value chain. The most noticable of these is the 20% increase is sales within the first 24 months of the RTM journey. But also, effects such as 8-10% improvement in outlet coverage and 5-10% increase in salesforce effectiveness. Digital transformation for small outlets in emerging markets are even more vital as to reach sustainable growth and productivity digital means are vital for success. Reaching the required scale for sustainable growth from new customers can only be accomplished thought the reach and productivity of digital means
The good news is that small local companies are ready for a change and are already using digital for transactions with customers using tools such as smartphones, apps and digital payments. The bad news is that big companies such as Amazon already know this and are using their weight to force smaller companies to join their platforms. But the point being that it is not too late for CPG’s to take advantage of the small local companies’ openness for digital technology.
Digital technology will allow CPG companies to improve their business operations across different areas. For example, through the use of data and predictive analytics allows shops to make use of automatic reorders to optimize shelf and storage management. This kind of data-driven operations is only possible in a digitally connected collaborative environment.
CPG companies need to create a connected and insight driven digital value chain across the end-to-end RTM value chain. The first step towards this goal is to first digitalize the organizations current operating model. This can best be done through a single scalable interconnected platform where stakeholders can create common truths and provide greater control and visibility over intermediaries.
Achieving RTM excellence requires a change in management thinking and a shift in focus towards all stakeholders for it to be sustainable. Reinvention is also true for seasoned RTM veterans to take advantage of new technologies for growth and creating opportunities to collaborate and innovate