Developing markets will be the main driver of consumer spending over the next decade, set to increase from $15 trillion to $26 trillion by 2026. But brands cannot expect to achieve success in the same way as they did in the West, through associations with large supermarket chains. In developing economies, traditional trade still rules the roost, in some cases making up 95% of all retail outlets. This poses a huge opportunity for consumer brands as they can expect to achieve far higher margins away from the big buying power of the supermarket behemoths.
It is crucial that FMCG companies put together comprehensive plans to proﬁtably grow their independent trade network in these markets. In order to maximise growth, they need improve their route-to-market approach. Because this channel is highly fragmented and geographically disparate there is a high cost-to-serve. This is where mobile comes in, it is the only mechanic that is universal across these types of stores.
Brandtone recently conducted research with independent traders in developing markets which threw up some useful findings - Brandtone Research - Traders outlook on economy, business and support expectations February 2016.
First we found that 60% of traders were in the younger demographic (18-35) and were interested in technology, describing themselves as technologically savvy. These traders are the children of the digital revolution after all and welcome technology much more easily than their parents’ did. 78% of these traders said that a mobile engagement program would help their business.
The main challenges faced across all participants were cash flow, poor sales and lack of demand. The most important supports identified were promotions, advice, education and information. Brands need to produce effective sales promotions, meaningful incentives and strong advice to win the heart of the trader and begin to build loyalty.
Mobile provides some important reassurance for traders when it comes to their relationship with suppliers. Brands can now use mobile to inform traders of promotions and also to educate and motivate them to make sales. Providing Millennial customers with the real-time information they need to make their business a success provides one of the biggest opportunities for brands in the fastest growing economies in the world.
Colin Staunton is the Marketing Manager for Brandtone.