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We are in the 21st Century!

It’s hard to believe that in 2019, where the majority of the population is armed with what is effectively mobile supercomputers, that consumer goods companies employ vast numbers of people and expect them to carry out mundane and repetitive tasks with technology that predates the iPhone?

When so many aspects of our industry’s business are completely predictable, why is it that we equip our employees with systems that don’t increase effectiveness and job satisfaction? Across the industry, our consumer facing organisations continue to execute the same error prone processes with very little help from their field automation systems.

In retrospect, what exactly is being automated? Our planning systems are separate from our retail execution systems. Our product catalogues are separate from our promotions. Our pricing rule engines don’t work where it matters - in the field. Many consumer goods companies are still actively discussing and focusing on improving order accuracy rates – how is that even still a topic? How can be pricing be digitally incorrect in the 21st century?

In a new retail reality led by the likes of Amazon, Alibaba, and Shopify, more than a few people have (unwisely in retrospect) have even questioned the need for our massive field sales teams. In a world where consumers worry about equality and sustainability, communicate their needs in real time across the internet, and expect instant gratification - a disconnected, old-fashioned sales team may appear to be an expensive and outdated luxury.

It is indeed true that most of the consumer goods start-up disruptive brands don’t have such sales teams. Before you draw any quick logical conclusions, dismiss or discount the value of your existing field sales team at your own peril. One global sales leader for an over-the-counter division in a life sciences has the scars to prove it, “we ran an experiment to replace an in-territory sales team with e-commerce tools and more marketing…sales fell off a cliff!”.

At Aforza, we believe, in fact, that a properly digitally enabled field force can be a CG company’s largest differentiator in this new and disruptive Intelligent Economy.

Did you Get the Memo? We were Disrupted!

It’s oft remarked that humans are averse to change. We spend a lot of time discussing internally the value of digital transformation, often wringing our hands and complaining about our inability to change.

Meanwhile, somewhere at the side of a motorway, in a grubby service station one of our field team members is desperately trying to connect to Wi-Fi because their system doesn’t work offline. Perhaps, your employees are chasing down proper connectivity at a fast-food location just like the Regional Sales Leader in a Global Beverage Company who told us: ”We couldn’t afford an Offline solution. Our Reps log their calls in McDonalds for the WIFI. I am battling constant adoption issues because the Users don’t know why they have to use the system.”

In truth, it is hard to fathom any other industry that has experienced more disruption than ours. We believe this disruption has forever changed the Consumer Goods industry in three pivotal areas:

Your Traditional Channels Have Been Disrupted

In the 1980’s the channel to market was clear. CG companies had a field force that dominated the channel by covering all major retail outlets. This was how access to products worked and there were few alternatives. Most people think B2C e-commerce disrupted this model; in actuality the biggest threat emerges from B2B e-commerce and the rise of the Intelligent Retailer. A digitally disabled field force is impotent in the face of this disruption.

Your Brand Mediums Have Been Disrupted

Remember when a single newspaper or TV advert went out and influenced millions of consumers? How very different today. Now, in a world where everyone is a publisher and everyone skips through ads, you by definition have nearly no control over the discretion of what someone might deign to say about your brand in public. Even in an e-commerce world, the primary brand contact point often remains in a bricks and mortar store.

Your Value Propositions Have Been Disrupted

CG Companies spend millions of dollars on refining their TPM processes and brand category managers spend thousands of hours building business cases to convince Retailers for better shelf space. However, focusing on “better or cheaper“(i.e. Buy 2 get 1 free) no longer wins when consumers are now examining and discussing your packaging, your ingredients, and your impact on the environment.

This disruption is all too real for all of us in the industry and we are rapidly adjusting all facets of our operations to adjust in real time – especially given how fast brand value can be created or destroyed. In February 2019, Kraft Heinz had approximately $17b wiped off its market capitalization. For them, cost cutting and zero-based budgets combined with a blind-eye to changing consumer nutritional demands of consumer, turned out to be disastrous. Conversely, Kylie Jenner Makeup, a company launched by the media personality in 2015 and promoted primarily via her social channels, is now worth over $1B.

As Amazon founder and CEO, Jeff Bezos points out in his letter to shareholders, “nearly 90% of retail remains offline, in brick and mortar stores”. So, in this new landscape, where your Consumers are more fussy, more fickle and more attuned to assessing your ethical fitness than ever before, what can we conclude from all of this? Here’s the paradox that will surprise you. That the part of your CG business that is really old and hasn’t changed in aeons - the field sales team – might be just what saves you.

We Now Live in an Intelligent Economy

In the CG industry, perhaps more so than any other industry, we grasp well the value of really understanding really understanding our current and potential customers behaviour. All major CG companies will put a significant amount of effort and dollars into harnessing computing power to essentially get closer to as many relevant customers as possible.

In our age, Amazon (and to some extent Walmart) likely analyse consumer behaviour best. They do it so well (and monetize on it quickly and at a massive scale) that many can perceive it as a near monopolistic force…but it isn’t & ironically it has a lot of room for improvement. There are 2 simple proof points that Jeff Bezos details to us in his excellent aforementioned letter to shareholders: (1) more than ½ of the products sold on Amazon are the products of 3rd parties and (2) Amazon is steadily increasing its investment in bricks and mortar.

The conclusion we must draw is that the best consumer data analysts and the highest valued consumer retailers in the world think that the brick and mortar store remain, and will remain, strategically a major pillar in the distribution chain of all CG products. For the next decade or so, CG companies have a massively strategic asset that is currently under-utilised and under-performing: the field sales team.

It’s our vision at Aforza that we can use the facets of our new Intelligent Economy to do better, be more effective, be more efficient than anyone would’ve realised. Here are some simple examples of how a CG company should operate today:

  • Intelligent Orders – why would anyone ever manually create an Order? Simply use AI/ML to predict the perfect Order, calculate the rate of sale, place promotions, place new products, check the store size, check the weather, check for holidays, check for sporting events, check everything & predict the perfect Order.
  • Extended Reach – the Intelligent Economy includes the “gig economy”. CG companies can utilise cloud and mobile technology to expand beyond their traditional field and distribution models. Extended Reach is the path to whole new business models.[1]
  • Digitally Enabled Employment - in an Intelligent Economy, the CG company has a strategic differentiator, a Field team! Ergo, it’s a necessity to give this team the best tooling available to help them transform into value adding evangelists, not over scrutinised order-taking administrators.
  • AI Driven Sustainability – using AI we can predict the perfect sales Order, but we can also avoid waste and returns. We can promote highly sustainable products and guide this through our distribution channels.

Put simply, the Intelligent Economy is our current society; the companies that recognise, respond and participate in it will be the ones who recognise their strategic differentiators and understand the investments they must make in technology to enable it. After all, in the Intelligent Economy, surviving isn’t thriving.

About the Author

Dominic Dinardo is the CEO and co-founder of Aforza. He joined Salesforce.com in 2002 and first experienced the challenges CG companies faced while on assignment with a major Asian FMCG company. Dom witnessed first-hand how field forces, regardless of their dedication and effort, struggled mightily to leverage the then-current iteration of mobile & cloud technologies to improve their effectiveness. He never forgot those experiences and was inspired 17 years later to return & apply mature Cloud technology and innovations in AI & ML to the problem.