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How Consumer Goods and Retail Can Align to Put Customers First

How Consumer Goods and Retail Can Align to Put Customers First

Here are the latest opportunities for retail and consumer goods companies to put the customer first.

I recently discovered oat milk.

Months ago, while a friend was visiting, we got into a discussion about a company that makes oat-based milk so close to the real thing that it was selling out everywhere. Shortly after my friend left, I tried to get my hands on a carton of this coveted vegan delight, but to no avail. In an age of perpetual product availability, this particular product was truly out of reach.

Amazon was selling cartons at the steep price of $40 and above. Whether I looked online or the grocery store down my street, or the Safeway a few blocks away, I had no luck.

Then I found an alternative oat milk from a local brand. With Amazon Prime same-day delivery, I was drinking an oat milk cappuccino within a few hours.

This consumer journey is not unique to me, or oat milk, for that matter. In the consumer goods (CG) industry, in which 95% of the $1.01 trillion in annual sales still happen in stores, the right products need to be on the right shelves at the right price to get into the hands of shoppers. Yet, the best-laid plans of CG companies and retailers still fail.

With complex distribution models, many routes to market, and multiple channels varying by category or product, brands still struggle to integrate planning and execution. It is, of course, easier said than done. The explosion of channels and development of new business models, product packaging, and formats means that brands are trying to keep up with an ever-changing landscape of complexity in both production and distribution.

A recent Salesforce survey of 500 global leaders uncovered the nuances and pain points around B2B relationships with retailers, from product visibility to marketing and merchandising execution — indicating that the same decades-long story still holds true: millions of dollars are left up for grabs by neglecting to optimize spend and tighten up execution.

In our research, what we’re hearing from CG executives as they transform to drive growth can be bucketed into three core areas:

  1. Putting the consumer and the customer at the center of the business
  2. Driving a first-class experience for talent acquisition and retention
  3. Having an agile approach to operations and new operating models

 

If we unpack the transition of brands putting the customer at the center of the business, we see the following key opportunities for improvement.

 

Address execution woes

CG companies are currently investing $200 billion a year on trade spend alone, but the majority (52%) of CG leaders say merchandising and marketing plans are not executed as intended in-store — leaving $104 billion of spend at risk annually. If a consumer goes to a store and doesn’t see your product, they will buy from the competitor, plain and simple. Just like my oat milk experience.

 

Empower field sales

CG sub-segments and markets where field sales and merchandisers are still highly influential in the uptake of new product, these sales reps are often the best chance for brands to ensure the best in-store experience. But CG leaders are split on whether these field sales resources are operating at maximum productivity. In fact, only half are completely satisfied. And when it comes to new product introduction and assortment optimization, only 38% are completely satisfied with how their company sells products into retail stores. It’s time to empower field sales…

 

Increase compliance visibility

According to our survey, in-store merchandise display compliance rates are a mere 40%. This means that there’s a good chance what’s being shown in localized advertising isn’t aligned with the store merchandise display in pricing, promotion, or proper display, which means a dissonance for consumers, and a bad rap for the retailer.

To transform, CG companies can’t go it alone — they need their retail partners closely aligned. Join us at the Consumer Goods Global Forum in June where we will talk about how CG companies can take a more integrated approach to their route to market.

Sunil Rao of Salesforce
Sunil Rao VP & GM, Consumer Goods

Sunil Rao is a vice president and general manager for Consumer Goods at Salesforce. He is focused on helping companies become more autonomous, intelligent, and connected.

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