You know everything about Your Store. Right?
You know everything about Your Store. Right? Well, here's something new.
‘Primary Sales', Secondary Sales', ‘Tertiary Sales.'... all these are as familiar words with any marketer of today as a sandwich or a pizza is to a school going kid. If we look at the FMCG industry of today....it resembles nothing short of a full-fledged war unleashed by the hundreds of companies that are continuously trying to increase their market share, get more shelf share out of the limited space from that good old retailer and in the process trying to reach out to more and more customers like you and me.
Unfortunately, even today, most of the distribution-led companies measure their success or failure by a single yardstick, i.e. primary sales figures. While a big company with a large number ofstockists to distribute its products may have a better bargaining power to push sales, a smaller firm may not be that fortunate and has to resort to age-old tactics like doling out freebies to lure the stockists. However, what may be apparent in both these cases...is that both the companies mostly use a push strategy to increase penetration and sales. This, as a long-term solution, may not be the ideal one. Strangely, every marketer would agree to this but then each one of them would only swear by what he is grappling with in the immediate to short-term..... Long –term today is mostly an illusion! Nobody has the time to reflect and think... as long as the graph is showing a northward direction; it's the end that matters...not the means to such end! As the father of modern economics profoundly said, “We are all dead in the long-term”. What an irony?
In today's growing but competitive market scenario, it is imperative for manufacturers and marketers to have a complete visibility into sales and inventory information right at the store level. Secondary / Tertiary sales from the retailer is the true measure of demand in the marketplace. Unfortunately, most manufacturers do not have access to any information beyond the distributor level where the primary sale happens. Collecting and reporting on sales and inventory information at the distributor, dealer, stockist and retail levels is critical for manufacturers to understand the true picture in the field. It is a myth that one can gauge secondary/tertiary sale based on primary/secondary sale.
But how does a brand owner measure tertiary sale? How does he monitor the investments he makes at the point of sale to create a differentiated customer experience? How does he track it on an ongoing basis to realise those individual moments of truth, where he is winning or losing, every single day, every single hour? While various technology and CRM platforms available in the market do help in extracting information, only a customised and exhaustive retail audit mechanism helps a company gain that last-mile visibility and connectivity when it comes to tracking tertiary sales. Again here, many companies tend to utilise the services of its own sales/merchandising staff to ‘perform this ritual'....... in the process turning the ‘maker' into the ‘checker'. Beyond doubt, a neutral third-party mechanism to track tertiary (and everything possible along with it, viz. out of stock, competition availability, visibility share, POSM share, measuring efficacy of ongoing trade programme etc) is the best and most effective way out. Thanks to technology, established retail audit programmes by specialised agencies today offer live and real-time information regarding where every brand is winning and losing..... in a seamless manner.... right from a single outlet to an entire country level. retail audit programmes act as the virtual eyes and ears of the entire execution system and help the marketers see the outlets right through the customer's eyes. The model quickly builds internal credibility among various stakeholders as well as building capability into the execution system through a live alerting mechanism that makes the life of the sales person much easier at the end.
The Retail canvas today is extremely dynamic. What's there in the store an hour ago is not there in the next hour. Hence, one of the biggest challenges among marketers today is to minimise the turnaround time to action upon available data and ensure the internal system can somewhat keep pace with this ever-changing landscape; that too with a high degree of objectivity and accuracy. It is here that a third-party retail audit comes in extremely handy for any marketer.
It is time that manufacturers start measuring their sales performance through the yardstick of secondary sales, as against primary. Some of the leading FMCG companies in India though have recently aligned the KRAs of their sales function to growth in secondary. Marico Industries, among a few others is a pioneer in this regard. Today, marketers are increasingly becoming sensitive to the needs and requirement of the end consumer. As a result, efforts are getting streamlined to deep dive into issues like demographics, purchasing power, visibility impact that an outlet creates, the way a brand communicates to a person like you and me inside and outside a shop. Once this is understood, product availability (including various SKUs) at the tertiary level are tracked to ensure the product is available at the store. The task, however, is not as easy as it sounds. One needs to work backwards to fix the problems. You will typically face problems in the manufacturing of the products, as for all you know, the product may not be available at the point of primary sale too. No amount of technology will suffice to make a change in that case. If there is anything that can bring about this change, it is the fundamental approach and the way of working in the organisation. And that requires a buy-in from various stakeholders. The good part of the story is once we are successful in getting that all-important buy-in, everything else falls in place. And the impact is visible to all.... stark and clear! The bad part is most marketers remain happy and complacent till the time the graph continues to go upward in ‘some way or the other'!