Sales support are spread across many sales disciplines. From B2B lead generation, key account & sales team management. All the way through to consumer sales, marketing and promotions.
OK „disrupt” might be the wrong word if we talk about CPG. It’s a pretty robust industry in general and hard to imagine what might disrupt it. People will always need to eat, right?
Only time will tell if a truly disruptive technology will visit our retail shelves. And if something truly groundbreaking does emerge, the big-name brands have enough cash to embrace it. Or at least try it, long before it gathers momentum.
This means, it’s unlikely any of our favorite CPG producers will encounter any kind of Kodak moment, at least at a shelf level.
Of course sales channels will continue to evolve or fade away, carrying with them those unfortunate CPG producers who fail to react. But the basic understanding that humans will eat, and desire nice things is about as sure as the sun, moon, and stars.
But what about disruption across the CPG services industry?
Well, that’s a different story. Disruption is nothing new to many of us who work within the CPG services sector. That’s why we sleep with one FMCG eye open. Anytime somebody even hints about a new technology we sit up and listen!
The CPG services industry is awash with disruption, new technologies, ideas… and mostly failures. But that’s ok, failure is just an iteration of the next big thing.
From supply chain innovation which promises to send expensive drones to my home with fried noodles, to the Bluetooth replenishment buttons you may still have glued to your washing machine.
All the big failures only serve to prove we shouldn’t sleep easy, as the innovation train might pull out of the station without us. Because it only takes one crazy idea to work.
But let’s look at how disruption might find its way to the humble store shelf.
Visual Retail Merchandising
Retailers & CPGs understand how the physical presentation of products is deeply critical to the success of every brand. Get it wrong and brand reputation, customer choice, and even customer loyalty are on the line.
In our industry up to 30% of consumer choice is decided by loyalty, although familiarity might be a better word. So any opportunity which can convince a consumer to pick our brand over their favorite is a holy grail opportunity for CPG producers.
And also when our product is out of stock or sitting in the warehouse. Our nearest competitor wins back that opportunity to steal our loyal consumers. The outlook is only marginally better if our products are incorrectly positioned on the shelf.
A consumer has on average a 15 seconds attention span to find the brand he or she wants. After that, the chance they will pick up a competitor’s product and fall in love with it is a real threat.
Given some of those nightmare scenarios, it makes sense that somebody is going to try to automate or innovate at a shelf level. Until they do, MS Services Merchandising teams are keeping our brand partners one step ahead of their competitors.
Here are some technologies that are leading the charge.
Best-selling brands do not play the chances game. They arrive in-store with clear action plans to capture their target consumers’ attention, across the various retail environments. These plans are called planograms, oddly enough.
Planograms can be created with three core pillars in mind, availability, assortment, and visibility. It is also common for many planners to factor in opportunity whenever possible.
I am not sure if we have seen any real disruption in the planogram segment yet. There are hundreds, if not thousands of digital tools promising retailers and CPG brands the best on-shelf strategies.
The unhappy truth is that the data needed to build planograms is rarely passed freely between retailers and their brand partners. That’s not to say the big brands don’t have ways and means to gather a lot of data. Many do, and MS Services deliver them.
Market-wide sell-in and sell-out data consolidation make for a great VC pitch but it’s just not realistic. So no real disruption here, to speak of.
Photo Recognition Software
Most CPGs are using photo recognition software to line up actual shelves with planograms. I guess we could say this is some kind of planogram innovation. But it’s still quite far from any real disruption. Although MS Services merchandising teams of the pen and paper era might rightfully disagree.
Personally, I see acres of possible disruption in the sphere of photo recognition, that’s because retailers are unlikely ever to consolidate their sales data and pricing strategies for the greater good, i.e. big tech profits.
However, it would be impossible to stop the next young and ambitious Elon from collecting, sorting, and imaging data from a shelf and category level.
But who has the capacity to take photographs in all retail stores, from all the shelves, right across Poland, I hear you ask?
This is exactly what MS services are doing for clients today, we are gathering millions of shelf images per year to help our partners grow.
So, no disruption yet, but a really great place to begin exploring if you ask me. And begin we have, with the team at MS Services.
Real-Time Shelf Monitoring
Real-time shelf monitoring is an area where most tech-savvy retailers, CPGs and even tech titans such as Google are planning major disruption.
Imagine an always-on camera, gathering real-time shelf-level data, that’s constantly being sorted by AI algorithms. And ends up neatly placed into datasets by brand, product, price and maybe even quantity.
How much more sales could a retailer generate by having real-time OOS alerts?
Could it be +5% per year? Well, even a fraction of this would make the cost of fitting out each store seem reasonable..
Next, imagine how much retailers could earn by selling this data to CPG brands. (Competitor layouts, real-time out-of-stock data, always on competitor pricing data, etc). It’s not so hard to imagine it could be rather valuable too.
This technology is right around the corner for most retail chains. These are not pie-in-the-sky ideas, all are available today. We are only waiting on a true disruptor, who will put it all together in the most convenient way for us to use.
Still, you have the issue of consolidating this data across multiple retail chains. And of course, this is why Google and Amazon are keen to build and host the core technology.
Yes, this can be where real disruption hits. But also quite possibly real destruction if big tech is allowed to control global sell-in and sell-out data.
Electronic Shelf Labels
ESL might be the future of retail. It makes sense that at some point this statement can be correct.
ESL adoption is not particularly wide within the CPG industry today. However, in terms of digital development of the customer journey, it makes sense that we will see a lot more ESL in the future.
Yes indeed, they can make the shopping experience engaging and informative for customers. And for retailers they can help cut out time-consuming manual pricing updates, freeing up teams to better engage with customers.
The cost and technical complexity of implementing this type of solution will gradually reduce and become more interesting for retailers. Until it does, we won’t see any kind of mass adoption.
But it’s not disruption, it’s more like digital evolution I guess.
Sales Data Disruption
Data, data, data, data! Your favorite retailer is no doubt doing his (or her) best to use it to keep your favorite product stocked. And a good many other things.
If you are in the CPG service industry and you don’t yet have a strategy for harnessing customer data, you are already way behind the curve. These days almost everybody is collecting and planning with data.
In my experience, many offline retailers don’t have clear strategies that allow them to exploit all data streams. And only a handful of the top CPG producers are using data correctly. So perhaps lots of disruption opportunities here?
Ask an online retailer which data they are gathering and using. The answer is literally “everything”. E-commerce retailers leave no meat on the bone. They absorb every action a consumer makes on (and even off) their store.
How many physical retailers are measuring foot flow each day, minute and second? I suspect not very many. And when they do it is only used to measure basic store conversion rates.
Ask an online retailer the same question and they will tell you where each customer came from, where they went in the store and for how long. Probably they can even tell you where the customer went after they left the store.
Technology allows physical retail to do similar things. But it’s neither convenient nor cost-effective to gather up all the elements needed to compile real-time consumer shopping data.
Today most CPG producers get large portions of their shelf data from sales support field teams like MS Services. And as a bonus, retailers are benefiting from the regular MS Services team visits which ensure OOSs are reduced.
Disruption will only emerge when data can be harnessed and used correctly. But that’s not going to happen today.
What is the Uber of CPG shelf innovation?
I don’t think anybody knows what it will be or how it will look. It makes sense that it’s going to evolve from the retail and not the CPG side. Particularly as it can be a valuable source of extra revenue for retailers.
I assume it’s going to incorporate real-time store, shelf, product and customer data. And may include many forms of AI with some machine learning thrown in for good measure.
The Human Touch
Whichever way the industry turns, people will always be the one differentiator the physical shopping experience will have over online stores. And any offline disruption which does not embrace elements of the human touch will only serve to drive more consumers online.
That’s why MS Services have thousands of people on the retail front line every day. We are working with brands and retailers to optimize the consumer journey. And fighting for every inch of prime shelf space.