By combining physical and digital RTM tools, CPG companies can increase numeric and weighted distribution while controlling cost-to-serve. Doing so, they will not only reach outlets better but also benefit in other ways:

• More direct access to B2B and key decision-makers on the customer side for even closer interaction and better customer service
• Improved and more personalized product, service and promotion offering
• Increased loyalty among customers and consumers

To achieve these benefits, CPG companies need to change their organizational set-up, too. They need to break down internal silos in their commercial functions, strengthen their digital capabilities and skills, and create incentives for their workforce and partners.

Now and in the future, CPG companies must move closer to consumers. They not only need to focus on offering better experiences and switching to direct selling. It is also important for them to understand their customers better and how they use the Point of Sale. When moving closer to consumers, CPG companies should keep the following points in mind:

• What is the best way to combine digital and physical channels?
• How do you ensure a seamless and exciting omnichannel experience?
• Will there be enough uptake by interacting directly with consumers to compensate for the loss on the retailer side?
• How do you compensate the retailer for this?
• What is the digital maturity of consumers in a specific market?
• Are you creating more noise than necessary?
• How do you apply technology in the best possible manner to support new experiences, higher performance, and seamless integration?
• How do you leverage the strength of your ecosystem partners, and how do you manage them?
• Which internal capabilities do you need, how do you build and improve them, and to what extent can ecosystem partners help with this?

Looking at a typical contact service strategy of customer segments, it is rather unsurprising that PoS in segment A are visited the most. In segment B and C, drop sizes (sell-in) tend to be smaller which results in less visits. Often this goes together with the fact that the customers of segments B and C are serviced by third parties. This leads to lost revenue potential as the company neither services the outlets properly to establish long-lasting relationships nor knows the outlets and consumers sufficiently. However, a CPG company should not leave segments B and C completely out of sight as they still pose a substantial business potential, especially when leveraging the opportunity to connect with consumers through digital tools and data-driven approaches.

Creating a digital Route to Market and responding to complex market conditions in the most effective ways requires CPG companies to rethink their organization’s landscape and Sales & Marketing functions. Working in multidisciplinary teams, which bring together experts from different functions, is increasingly important for a business to thrive in the digital world. Leaders are looking to transform these functions using automation and analytics to streamline non-value-adding activities, freeing up time to focus on transforming the category experience and driving new ways to create joint value for their customers.

The transformation does not stop with changing the organization’s set-up, its functions and capabilities. Moreover, the organization must have the right mechanism in place to measure success in an effective and balanced way. This requires a clear definition and alignment within and across functions and markets on operational KPIs and performance (for example traffic generation and visit rate, customer lifetime value, conversion rate, retention rate, SKU, cost-to-serve). It is important to drive transparency and consistency of the identified measures to make them easier to compare and, more importantly, incentivize the workforce to work toward common goals.

What is the best way for CPG companies to establish a digital Route to Market? While every company will have to deal with individual challenges to some extent, we recommend to prioritize the following:

• Develop commercial segmentation strategies and estimate their impact
• Improve classification of new customers using a data-driven approach
• Enhance resource allocation to minimize costs resource allocation to minimize costs (establishing the right number of execution levers for each outlet)
• Maximize value of product/service to customers by optimizing their assortment (e.g. through segmentation)
• Tap hidden assets to commercialize
• Quantify market potential and priorities
• Create new revenue growth streams
• Optimize price and profit using analytics to shift visits to the most valuable customers
• Focus sales and negotiating talent on the right markets and opportunities
• Align sales incentives with behaviors and outcomes
• Set intelligent sales targets and quotas
• Put the commercial operating model in place
• Effectively communicate the sales plan
• Prepare the sales force to execute
• Establish governance and monitoring