For CPG companies, outsourcing isn’t enough. You need to outsource experts.

Central Group

Outsourcing is the new reality, as razor thin margins become a fact of life.

A recent study by IT research firm Gartner predicted fully 1/3 of jobs will be replaced by software, robots, and smart machines by 2025, and robots will reach human levels of intelligence by 2029.

That’s why it pays to learn from CPG. For years, CPG brands have been under enormous pressure to become more efficient through automation and resource restructuring.

The first lesson? There’s more to outsourcing than hiring contractors. You need to hire smart partners.

Planning and executing for success

One of our clients, a large CPG company in the healthy, nutritious foods category, was facing declining results because of chronic inefficiencies:

  • For many years, they had endured merchandising planning cycles in excess of 8 months (an eternity by today’s standards).
  • Their sales teams didn’t have the necessary tools driving incremental sales on both national and strategic accounts.
  • Brands within the company were experiencing higher costs (120%+) for their merchandising goods and promotions, with little or no innovation and poor results.
  • Compliance measures indicated 2/3 of their in-store materials didn’t make it to the store floor.
  • Broader measures also indicated that brands were underrepresented in every merchandising metric.
  • They were moving toward a position of vulnerability to competition – both online and in bricks and mortar.

These were the challenges they brought to us, knowing that we’d provide more than just display ideas – we were their outsourced strategic counsel with expertise in planning, distribution, management and measurement of display and merchandising programs.

We decided that an online shopping platform would greatly support their internal planning and deployment operations. The assumption paid off –  they saw significant gains throughout their process, with greater efficiencies and better performance.

Platform for success

We have a long history in helping brands use online shopping platforms to improve the planning, distribution, management and measuring of display and merchandising programs, all in real time at their fingertips.

In this case, we helped our brand partner institute a ‘webstore’ platform, essentially taking the functionality of an Amazon-like experience to a whole new level, creating an interface and operational platform that made the planning, management, distribution and logistics of display and merchandising materials an absolutely frictionless experience.

This platform:

  • Managed allocations by representative.
  • Tracked usage and order history by sales person and by retailer or channel.
  • Was multi-platform and mobile ready.
  • Provided head office oversight and rule-based decision making.
  • Provided robust back-end reporting.
  • Offered sales rep feedback on all products to drive into the innovation cycle.
  • Assisted in forecasting.

The result?

Based on our platform experience, we designed, produced and shipped displays in under 12 weeks. All materials were distributed within 48 hours, with less than 5% waste! This is the sort of efficiency that comes with close teamwork, and outsourcing partners with expertise not just in execution, but planning and strategy.

If you’re wondering how (in)efficient your ‘last mile’ is, we have some advice:

  • Start by asking yourself tough questions, starting with How efficient are we?
  • Investigate if your retail customers perceive your brand to be slow in reacting to demands.
  • Index if your display and merchandising materials are underperforming.
  • Look into your waste and unused inventory – are you leaving money on the table?

CPG is a harbinger of the hyper-efficiency most industries are going to face. Things are only going to get tighter in your business.

Brands will continue to feel pressure, as greater consumer choice and more nimble disrupters to the marketplace flood in.

You must continue to look to technology opportunities to assist in driving business automation, speed to market and performance. But more important, you need to outsource partners who bring expertise in strategy, as well as execution.

If you found this story useful, and you’d like to know more about how we work with brands to drive shopper ROI, don’t hesitate to contact Mike Alviano at mike.alviano@centralgrp.com, (905) 467-2231‬.

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