Open Commerce is the key to winning in B2B e-commerce

Over the last few years, digital marketplaces have been the buzz of the consumer industry as the global online share of FMCG has increased steadily. FMCG digital commerce is expected to grow rapidly across emerging markets within the next five to ten years as smartphone and internet penetration increases in these regions. For example, FMCG e-commerce grew by 4% in Latin America in 2021, an acceleration three years ahead of the predicted schedule.

Source: Worldpanel Division, Kantar, GfK, Intage | Omnichannel 2022

However, despite the growth opportunities FMCG e-commerce represents, many FMCG brands and retailers still struggle to understand how to adopt them into their already complicated channel mix. Currently, the only way for these brands to ensure their products reach consumers is by distributing them through a fragmented network of roadside shops, open market stalls, and other small neighborhood stores.

While this distribution model has worked for decades, its limitations are numerous. There is no visibility across the distribution chain, and driving sales depends on physical visits by sales reps to thousands of distributors and retailers. With the pandemic accelerating the rate of digitalization, more retailers and distributors are willing to shop online, and FMCG brands now recognize the advantages of reaching their B2B customers on a digital platform.

Forward-thinking brands are already thinking long and hard about how to participate in digital marketplaces. This article offers a brief overview of why traditional e-commerce marketplaces do not work for FMCG brands. We also showed how Open Commerce, a new type of B2B e-commerce, is the secret to winning in emerging markets.

B2B digital commerce is a must-have for FMCG brands in emerging markets

Across emerging markets, over 80% of all consumer goods are sold via the informal market, making small, independent grocery stores not only a vital channel for FMCG companies but an essential part of the local economy by supporting millions of households.

However, there is an inherent disadvantage to serving multiple small retailers located along the same route but with different ordering and delivery schedules. Sales reps are forced to make multiple runs with partially loaded trucks, a grossly inefficient and costly delivery model. In addition, the system leans towards entirely manual processes, such as manual order-taking and reconciliation, which is more prone to inconsistency and inefficiency. Thus, it is unsurprising that the average SG&A costs for the consumer industry is 25%, the highest of any single industry.

A fragmented route to market also makes for an inflexible supply chain. Everything from sales plans to delivery routes are difficult to alter, and there is no room for agile reallocation of resources. In a world where supply chain disruptions are occurring more frequently, this model leaves brands vulnerable.

Source: Staying ahead of the B2B ecosystem disruption, McKinsey 2020

Despite the inefficiencies that emerge from this fragmented distribution system, manufacturers must continue crafting new, digital approaches to reach these stores due to their scale and proximity to end-consumers, and by adding digital selling to their channel mix, FMCG brands can:

  • Increase supply chain efficiency and reduce the cost to serve
  • Ensure product availability across the retail market and reduce losses from out-of-stocks.
  • Provide personalized customer experiences, increase customer engagement, and grow brand loyalty.
  • Increase market reach and gain market share.

FMCG brands can only reap these advantages when they build and execute online selling the right way. For most CPG executives, e-commerce has historically been less profitable than traditional offline sales. Yet, digital commerce will most certainly be one of the primary sources of growth for consumer goods companies in the foreseeable future. Does this mean that margin dissolution is inevitable?

What FMCG brands should look for in a digital marketplace

With the right digital marketplace, CPG companies can generate healthier margins while selling online and drive revenue growth with data-driven dynamic pricing. However, a digital marketplace must offer brands the following capabilities to make the financial and technical investment worth it:

  1. Accelerate the shift to digital models and digitize interactions with all channel partners.
  2. Aggregate orders from channel partners, creating lower costs to serve individual retailers or distributors, leading to lower prices at outlets.
  3. Make ordering stock convenient for sales reps and customers, reducing the chances of items being out of stock.
  4. Increase visibility and transparency in the traditional retail markets and enable sales and marketing teams to create personalized, targeted promotions to drive growth.
  5. Increase market reach and penetration across multiple geolocations

Unfortunately, no digital marketplace solution provides these capabilities to brands in emerging markets. While third-party marketplaces like Jumia in Africa or Mercado Libre have the digital infrastructure to enable brands to reach more customers, the trade-off is that brands lose control over their supply chain.

Most e-commerce marketplaces use their distribution and last-mile delivery networks to deliver any goods bought on the marketplace, so brands do not have access or visibility into who is buying their products and where the demand for their products is. As a result, the real value of digital selling – customer and transaction data, data-driven insights, and personalized customer experiences will forever remain out of reach for FMCG brands that use third-party marketplaces.

The only other solution for brands is to build their own digital marketplaces, but it also has a disadvantage – convincing retailers and distributors to adopt the platform. Most digital marketplaces designed in-house by FMCG brands have a limited selection of products to choose from. This is an entirely unattractive prospect for distributors and retailers who often carry SKUs from multiple brands.

So, the question remains, how do FMCG brands win with digital marketplaces?

The answer is Open Commerce.

Leverage Open Commerce to win with e-commerce

Imagine a digital platform with the reach and scale of traditional e-commerce marketplaces but provides full, end-to-end visibility across the entire supply chain. Instead of simply seeing how many products were sold on the platform (basically the only information 3party marketplaces provide), brands can see who is buying their products down to the smallest retailers, their geolocation, how often they restock, and so much more.

This is what Open Commerce provides.

Open Commerce is a new digital trading platform for the consumer goods industry built on the same principles as the original Open-Source movement. It provides a single point of digital engagement for brands, distributors, and retailers to connect and trade directly with each other, allowing the free flow of data between all ecosystem partners. With Open Commerce, retailers and distributors can access their favorite brands, order for stock, and pay securely online, no matter their location.

RedCloud has built the world’s first Open Commerce platform, Red101, which allows brands to leverage the advantages of a digital marketplace while defending their core business. Red101 also allows FMCG brands to capture real-time data across the entire distribution chain and analyzes the data to provide actionable insights that can be leveraged to drive growth. With the insights generated, sales and marketing teams can shift from traditional outlet segmentation, which is often based on scale or region, to a more sophisticated approach, such as grouping outlets based on micro market characteristics and overall growth potential.

Schedule a demo with us today to see how FMCG brands in emerging markets are embracing digital Commerce and winning with Open Commerce

 

How to drive digital transformation in emerging markets

Imagine a billion-dollar organization that manufactures thousands of products with a 100% manual, paper-based management system. Does this sound strange? Unfortunately, this is all too common in the consumer goods industry, especially in emerging markets, where manufacturers still depend on physical visits to retailers and van sales across a vastly fragmented retail market to deliver essential consumer goods. 

This model is severely outdated, grossly inefficient, expensive, and stifles growth for FMCG brands. As supply chain disruptions continue to occur with alarming regularity and place considerable strain on the already inefficient traditional chain, the need for consumer goods manufacturers in emerging markets to digitally transform their organizations is clear, but the “how” is not. Data shows that out of 10 global consumer goods companies that have launched large-scale digital transformations since 2015, only 30% have hit their growth and cost-efficiency targets. 

To successfully drive digital transformation and reap the numerous benefits it offers, consumer-goods companies must embrace a new breed of transformation that builds a sustainable competitive advantage. They will also need to rethink their entire distribution models, where to play, and how to win with digital while building new capabilities for the future (such as end-to-end supply chain visibility, data-driven marketing, digital route-to-markets, and next-generation inventory management).

Why FMCG brands need digital transformation now

CEOs of large CPG companies have lots of reasons to worry. The traditional advantages incumbents have held for decades – scale, marketing reach, and long-standing relationships with retailers are far less relevant today. Retail customers now expect more personalized experiences, and smaller, digitally native brands with direct-to-consumer distribution models can hit the ground running and seize market share within months. 

E-commerce marketplaces and last-mile delivery startups are already monetizing new competitive advantages with customer and transaction data in ways that large FMCG manufacturers cannot compete. In addition, supply chain disruptions, rapidly shifting demand patterns, and rising input costs have added more economic uncertainty to the industry, adding another layer of complexity to the difficult digital transformation task. 

Digital transformation can become a game-changer for larger FMCG brands and enable them to compete aggressively and unlock new pockets of growth. Available reports show that digital transformation can build a 50% faster route-to-market at a third of the cost and double the return on investment. 

From chaos to insights – the FMCG transformation journey

FMCG brands already recognize that maintaining the existing manual business model will leave their companies sitting ducks but have found it increasingly difficult to identify the best path forward to drive digital transformation. For example, on average, CPG companies have reported an 8% increase in digital technology budgets over the last three years, but only 25% have successfully executed a digital transformation (well below the 35% cross-industry average), and only 20% have created little long-term change.  

Most FMCG brands today are still lagging in the stages of “passively digital” or “exploring digital” and are unable to cross to the “doing digital” stage because they lack a cohesive data capturing and analytics strategy, a critical component to supporting digital transformation. Any captured data is often scattered in spreadsheets, field agent reports, and even mobile phone pictures. Without access to real-time data syndicated across the value chain, no meaningful insights can be generated, and the company cannot respond in time to rapidly changing market demands or maximize growth opportunities.

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Source: Deloitte

In our work with FMCG brands in emerging markets to drive digital transformation across the entire business, especially in the sales, marketing, and supply chain function, we have identified four major steps that these companies must take to move from chaos to insights:

  1. Develop a comprehensive data strategy that makes capturing data across the entire value chain mandatory.
  2. Invest in data transformation tools that aggregate, digitize, analyze, and derive insights from unstructured data to support business use cases.
  3. Move the traditionally manually captured data to a single source of truth, where it can be made accessible and searchable for all stakeholders in the value chain.
  4. Use advanced analytics tools to derive insights that unlock cost reduction, increase profitability, and accelerate product delivery.
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By taking these steps, CPG companies will:

  • Achieve real-time end-to-end visibility across the entire supply chain
  • Accelerate the time to market
  • Maximize trade promotion spend with data-driven campaigns
  • Identify localized growth opportunities among multiple customer segments.

The most critical question that FMCG leaders in emerging markets must now answer is this – what digital solution should we invest in that will provide the capabilities we need to drive true transformation?

The answer is Open Commerce.

Digitally transform your FMCG brand with Open Commerce

Open Commerce is the only digital solution that provides everything FMCG brands in emerging markets need to drive digital transformation. Open Commerce is a new way of doing business that connects the entire FMCG supply chain on a single digital platform, making it possible for FMCG brands to sell to both new and existing retail customers online.

In addition to enabling online e-commerce sales, consumer goods companies and distributors who leverage Open Commerce can now access valuable, real-time customer and transaction data synced across every single point of sale. This means that for the first time, a manufacturer in an emerging market like Nigeria or Brazil can see who is buying their products in any geolocation, even the most remote ones, and create specific, targeted campaigns that will increase sales and drive growth. 

RedCloud has built the world’s first Open Commerce platform, Red101 Market, a complete end-to-end digital solution that is easy to implement, cost-effective, and, most importantly, captures the data that legacy FMCG brands desperately need to stay competitive. Unlike other e-commerce solutions, CPG companies do not need to abandon their existing distribution network. Rather, Open Commerce gives you more control of and visibility across your supply chain, so you can build the much-needed data-analytics capabilities and rapidly scale across the entire organization in a matter of weeks, not years.

The future of Commerce is Open, and RedCloud is the pioneer of that future. Schedule a demo with us today to see how we can help you drive rapid digital transformation and unlock new levels of growth.

Transform your supply chain with advanced planning analytics powered by Open Commerce

Every consumer goods company wants a supply chain that runs smoothly from end to end; however, various challenges, such as the rapid shifts in customer expectations and purchase habits, inflation and the rising prices of commodities, and a looming energy crisis, among others, have made planning for this almost impossible. The case is even worse in emerging markets, where FMCG brands depend on an inefficient manual distribution model to reach the fragmented retail market.

Research shows that supply chain disruptions that last a month or longer now occur every 3.7 years on average, with a cumulative cost to consumer goods companies of one-third of annual earnings every decade. As the costs of these disruptions continue to rise, FMCG leaders now recognize the need to prioritize resilience and adaptability. A survey of 60 senior supply chain executives shows that 93% plan to increase resilience in their supply chains, and the primary way for brands to build this resilience is by rethinking their planning practices.

Over the next decade, the existing planning capabilities that FMCG brands, especially in high-growth markets, have relied on will prove insufficient, and the increased frequency of disruption will only make things more difficult for supply chain managers in the consumer goods industry. Therefore, the only way to survive and drive growth is to completely reimagine planning operations and capabilities – a true end-to-end planning transformation.

Why is it hard for FMCG brands to effectively manage their supply chain?

Managing FMCG supply chains are inherently a cross-functional activity, as they connect the company’s internal functions – marketing, sales, and distribution and its key external partners – suppliers, distributors, retailers, and end consumers. Therefore, the only way to build a resilient supply chain capable of resisting disruptions and driving growth is by close alignment and coordination among all supply chain participants, both internal and external. However, while many FMCG manufacturers in emerging markets recognize that operating in organizational silos prevents their supply chains from performing well, they still struggle to coordinate among multiple departments and channel partners.

For example, where distribution centers want to control inventory levels to reduce handling costs, sales teams cannot accurately predict demand across the fragmented market in real-time, as they do not have visibility across the entire supply chain and must rely on physical visits by sales reps to distributors and retailers. This makes inventory planning harder, leading to increased handling costs or low service delivery to customers.

Ultimately, these disconnects, lack of visibility, and cooperation make it harder for FMCG companies to plan effectively and meet growth targets, as every department and channel partner seems to be pulling in a different direction.

The only way forward is with advanced supply chain planning, which can increase revenue by up to 4%, reduce inventory by up to 20% and reduce supply chain costs by up to 10%. In addition, a high-performing planning function can provide FMCG manufacturers with the ability to capture value across both the top and bottom lines.

To unlock this value and capture the much-needed growth, supply chain leaders in emerging markets must answer this question – how do you build advanced supply chain planning capabilities when the market is fragmented, and there is no visibility across the distribution chain?  

 How to build a planning analytics center of excellence

Digital planning solutions hold the potential to dramatically improve the supply chain performance for FMCG manufacturers in emerging markets, but most brands are severely limited by the lack of choices available. In addition, most planning solutions, like ERP and SAP systems, tend to focus only on internal, individual processes but provide almost zero visibility across the entire supply chain.

To successfully transform planning and reach new levels of growth, FMCG brands need a solution that provides:

  • Full supply chain visibility: Real-time data captured across the supply chain will help FMCG companies identify risks and exceptions earlier and develop potential countermeasures. Supply chain leaders, for example, can identify spikes in demand for particular SKUs and reorganize inventory and distribution in real-time to meet them if distributor and retailer demand can be syndicated and displayed on a dashboard in real time, rather than having to depend on manual reports from multiple field agents.
  • Advanced analytics enablement: CPG companies need a solution that captures relevant, valuable data and leverages the data to provide actionable insights across multiple teams. Without this capability, brands often cannot make accurate demand forecasts, plan optimal delivery routes or deliver products to retailers in time to keep shelves stocked.
  • Cross-functional integration: By leveraging cloud-based planning solutions that are relatively easier to deploy and access from multiple locations, multiple departments and channel partners collaborate closely.
    For example, with a cloud-based solution that is easy to use, field agents can access valuable data in real-time and use the data to drive sales growth while simultaneously feeding data back to other teams. This enables cross-functional integration across the supply chain, both internally and externally.
  • Optimized, flexible planning: Brands must also develop the capability to manage different planning activities (e.g., demand forecasting, inventory, trade promotions, and scheduling) to produce the best decisions for the entire value chain.For example, if an FMCG marketing team decides to release a new trade promotion aimed at driving growth across specific geolocations, the distribution center must have the capacity to react in time and adjust the distribution plan to ensure that the added demand is handled with zero disruption to service delivery.

There is only one solution that provides all of these and more.

That solution is Open Commerce.

Transform your planning end-to-end with Open Commerce

Open Commerce is a revolutionary digital commerce platform that unlocks the full value of the traditional supply chain by providing end-to-end visibility across the entire value chain. It is a new, digital way of trading that connects every player across the distribution chain and captures real-time live data across the market. Now, with Open Commerce, FMCG brands in emerging markets can dissolve data silos, gain full visibility into the needs and challenges of other channel players and build a truly resilient supply chain. 

RedCloud has built the world’s first Open Commerce platform, Red101 Market, a simple, easy-to-use digital solution that makes advanced planning analytics possible. With Red101, brands can now provide distributors, wholesalers, and retailers with a digital platform where they can order their products anytime and anywhere instead of having to wait for field agents to visit their stores. However, unlike traditional e-commerce, where sellers lack visibility and lose control of their supply chains to third-party marketplaces like Amazon or Jumia, FMCG brands can now see in real-time where the demand for their products is across the entire market and build dynamic, resilient supply chains that ensure adequate levels of service delivery at the touch of a button.

Schedule a demo today to see how RedCloud’s Open Commerce platform can help you develop advanced planning capabilities and transform your supply chain.

Building a sustainable value chain in the FMCG industry

Over the last few years, sustainability has become an important topic in the retail and consumer sector. Since 2020, interest in "ethical brands" and other sustainability-related issues has exploded, growing between 300% and 600% based on Google searches alone. The pandemic, extreme weather events, and a looming energy crisis, among several other events, have brought the need for a more sustainable economy to public attention, as 52% of consumers globally say that sustainability has become more important to them because of the pandemic.

But what exactly does sustainability mean, and how does it affect the consumer-goods sector?

For many people, sustainability is primarily about the use of natural resources and the climate impact of our actions, which is highly relevant for consumer-goods manufacturers and their supply chains, as the typical FMCG supply chain generates more environmental impact than in-house operations. For example, the supply chain is reportedly responsible for more than 80% of greenhouse-gas emissions and over 90% of the impact on air, land, water, and other geological resources.

Today's consumer brands face a challenge, as sustainability is no longer a nice-to-have but an essential part of every business's resilience and growth plan. This article explores why sustainability is crucial for consumer-goods brands and shows how digitizing the supply chain with Open Commerce can help brands rewire their existing systems to build sustainable, more resilient value chains that will allow them to thrive in the future.

The "value-action" gap in consumer-goods sustainability.

Today's consumers no longer see sustainable products and brands as an alternative. Instead, they are basing their purchasing decisions, at least in part, on the sustainability of products and companies. Over 60% of consumers now say they are changing their consumption habits in favour of increased sustainability. This "eco-awakening" is not limited to consumers in developed economies but is also strong in emerging economies. A recent report by the Economist Intelligence Unit shows that demand for sustainable goods increased by 24% in Indonesia and 120% in Ecuador.

However, despite the increased attention being paid to sustainability, there is a "value-action" gap between consumers' sustainability preferences and their purchasing actions. For example, research shows that 65% of global consumers tried to buy sustainably packaged products, but only 29% could avoid plastic packaging. While some parties might see this gap as evidence that sustainability is not as important as consumers make it seem, it is more likely that there are significant barriers that prevent consumers from being as eco-conscious as they want to be.

This would mean a significant advantage for brands that can make it easier for consumers to make sustainable choices. For example, the 36% gap between consumers who tried to buy sustainably packaged products and those who could avoid plastic packaging is worth over $800 billion. By eliminating the barriers to sustainable retail behaviour and helping close the value-action gap, FMCG brands can unlock valuable revenue streams.

Understanding the 'green' customer

To successfully close the value-action gap and unlock the value-action gap, brands must first understand the varying environmental attitudes and actions. Recent research by Europanel, Kantar, and GfK defined three main consumer segments based on their level of concern for environmental issues.

  1. Eco-actives: Consumers in this segment are highly concerned about the environment and invest energy and money in buying sustainably. Eco-actives currently account for 22% of all consumers and are the fastest growing group. They are projected to make up 50% of the global population by 2029 and 50% of the emerging market population by 2035. They are currently worth $446 billion in FMCG spend and are projected to reach $1.104 trillion by 2029.
  2. Eco-considerers: Like eco-actives, eco-considerers are worried about the environment. However, they consider the barriers to sustainable purchasing hard to overcome. This consumer segment is the largest percentage of the market (62% globally), and the value-action gap is most pronounced among them.
  3. Eco-dismissers: These are the least engaged consumer segment, who take little to no interest in the environment. This segment is shrinking rapidly, falling from 41% in 2019 to 28% by 2021.

From the study, more consumers will become concerned with sustainability in the consumer-goods industry, and brands need to identify and surmount the existing barriers preventing consumers from accessing sustainable products. In addition, brands that can communicate their dedication to meeting sustainability targets are more likely to drive growth and unlock new revenue streams.

Improving sustainability with data

While the need for brands to become more sustainable is clear, the path to achieving it is not. Brands, especially emerging markets, need increased visibility across their value chains to strengthen credibility and prove how they are achieving their sustainability targets. However, companies can only prove what they can measure, so data is crucial for sustainability efforts.

Daily across the consumer-goods industry, there are numerous opportunities for brands to apply data to supply chain sustainability problems, such as inaccurate demand and its effect on inventory planning, logistical and distribution challenges, packaging, and product waste, among others. The only way to achieve this is by integrating data across the entire supply chain – from brands, distributors, retailers, and other partners or suppliers. With real-time visibility and advanced analytics, brands can drill down into key sustainability metrics, mitigate risks, and identify and maximize new opportunities for improvement.

With real-time data syndicated across the supply chain, brands can better understand the demand for their products and what products customers are likely to buy. This data can then be leveraged to make data-driven decisions on inventory placement and optimize deliveries. It can also provide customers a more personalized product selection, which eliminates a major barrier for the eco-considerers' customer segment.

Build a sustainable value chain with Open Commerce

In emerging markets, FMCG brands typically lack visibility across their distribution chain and cannot identify who their customers are, what eco-awareness segment they belong to, and what types of products they would be interested in. Thus, these brands are unable to unlock the demand for sustainable products and maximize the valuable revenue streams previously inaccessible.

Until now.

RedCloud has built the world's first Open Commerce platform, a digital commerce solution built for the consumer-goods industry in emerging markets. With Open Commerce, brands and distributors can unlock the full value of the supply chain and capture valuable data in real-time. Instantly, brands can see into the retail markets, which is buying their sustainably produced goods across multiple geolocations and rewire their supply chains to meet the demand gap.

Schedule a demo today to learn how RedCloud can help you build a sustainable value chain and unlock valuable revenue streams.

Open Commerce can make your retail business more efficient and cost-effective!

A walk through any major market in any major market in any emerging economy will show the same scene, thousands of little shops and open-air stalls selling essential consumer goods. These small stalls and shops are responsible for over 80% of all consumer goods sold in emerging markets. In some markets, like Nigeria, that figure can rise to 97%, representing billions of dollars worth of trade done entirely manually.

However, the process of distributing these consumer goods to the retailers and merchants who sell to the final consumer across the fragmented retail market in emerging economies is a complicated task. The traditional trade model in use is heavily dependent However, distributing these consumer goods to the retailers and merchants who sell to the final consumer across the fragmented retail market in emerging economies is a complicated task. The traditional trade model heavily depends on d inter-personal relationships between field agents and retailers and physical visits to fill and collect orders from retailers. This model is grossly inefficient and causes erratic demand, which leads to empty shelves and lost sales opportunities.

This article examines how Open Commerce can help brands, distributors, and retailers become more effective, save costs, and increase revenue.

Why the traditional retail model is ineffective

In emerging markets, multinational brands struggle to get their products to customers and face a bewildering kaleidoscope of strategic and operational challenges. They must grapple with a chaotic array of shops, open-air stalls, kiosks, and street vendors who seem to offer consumers a little bit of everything, from groceries to branded goods. The fragmented nature of these markets makes last-mile delivery slow and inefficient, and the total dependence on physical visits to distribute stock means that thousands of dollars and manhours are wasted daily.  

Manufacturers and large distributors need a large army of field agents who travel long distances to serve the spread-out distribution network of stockists, wholesalers, and small retailers. These field agents often have to carry large amounts of cash paid by retailers and distributors, which can be risky and costly. Smaller shops and stall owners in rural areas are also faced with the same challenge: they have to travel long distances to the city center, often carrying large amounts of cash to purchase stock. This delay is even more complicated in major cities like Lagos, where traffic congestion is at an all-time high. A recent report shows that 14.12 million manhours and 3.834 trillion are lost daily and yearly due to traffic congestion.

Under this inefficient distribution model, retailers cannot place orders for stock at the point where it’s needed; instead, they are forced to wait for field agents to visit them to take orders. Sometimes, the field agents accompany the delivery vehicle and fulfill the order on the spot. Other times, the field agent has to take the orders and transmit them to the sales team, who then plan a delivery beat based on the orders generated across specific geolocations. However, this system is slow and cumbersome and leads to avoidable delays that prevent retailers from getting the products they need when they need them. 

Digitizing the supply chain can improve efficiency

The solution to creating a more efficient distribution chain is to digitize the entire supply chain. By digitizing the distribution process, sales teams can see in real-time where the demand for their products is and create efficient delivery routes that ensure that lead times are shortened, and retailers’ shelves are kept stocked.

Brands that are able to adopt digital solutions to craft nuanced strategies aimed at traditional retailers can raise their revenues from emerging markets by 5 to 15 percent, and increase profits by 10 to 20 percent.

However, digitizing an entirely manual supply chain that has operated in the same way for decades is not an easy task. Many FMCG brands have attempted to build digital solutions or sales apps, but they almost always fail. Available statistics show that over 70% of all digital transformation initiatives by FMCG brands eventually fail due to three main reasons:

  • Low retailer adoption: When FMCG brands attempt to digitize their supply chain, they almost always do it to solve their problems. Unfortunately, these digital solutions do not provide a compelling enough reason for retailers and distributors to adopt the app, which is why it eventually fails. 
    For example, many FMCG brands have built digital shopping apps that allow distributors to order from them and pay digitally. This is valuable to the brand because it eliminates the costs of cash payments. However, it does not provide any value for the distributor or retailer, who is saddled with the responsibility of digitizing cash. In addition, most distributors and retailers carry SKUs from multiple brands and do not see any reason to adopt an app that only allows them to purchase from a single brand. 
  • High costs of digitization: Digitally transforming the entire supply chain has been seen as a high-cost endeavor that could cost millions of dollars. For example, ERP systems are the most popular digital solution for large consumer brands, but migrating to the latest SAP/4HANA ERP standard can cost up to half a billion dollars for large multinational organizations.
    Despite these huge investments, ERP systems do not provide much value in emerging markets, where traditional trade reigns supreme. As a result, many FMCG brands cannot justify these huge expenses to digitize their supply chains.

  • Lack of sales team technical know-how: Most of the digital solutions available are complex and require highly skilled IT staff to run them. The steep learning curve required to use any digital solution effectively poses a significant barrier to the sales team, who often end up conducting sales offline because it is easier.

To build resilient distribution networks, improve end-to-end visibility across the supply chain and make retail business more efficient, we need a new type of digital solution.

We need Open Commerce.

Make your business more efficient with Open Commerce

Open Commerce is a digital commerce platform that unlocks the full value of the traditional distribution model. It is designed to enable brands, distributors, and retailers to connect and trade directly with each other on a digital platform. 

Unlike other digital solutions, anyone can get started with Open Commerce because it is easy to use and provides clear, compelling value for everyone along the distribution chain. Brands gain real-time visibility across the supply chain with access to syndicated, real-time data at POS. Distributors can buy directly from brands and sell to retailers on the same app, making it easier to manage their entire retail business online. Retailers of any kind can log onto a simple app and, within 24 hours, access multiple distributors and brands and start placing orders for their stock. 

RedCloud has built the world’s first Open Commerce platform, Red101 Africa. With Red101 Africa, retailers simply need to download an app, and they can manage their business right from their mobile devices. With Red101 Africa, a retailer in even the most remote locations can buy stock from any brand or distributor to restock their shelves, 

With Open Commerce, you can make every single customer or field agent’s journey worthwhile because you know that you are responding intelligently to existing demand, which leads to consistent sales growth month-on-month.

Schedule a demo with us today to see how we build resilient supply chains in emerging markets and make retail businesses of all sizes more effective.

Personalization is key to FMCG marketing success in high-growth markets.

Imagine receiving a personalized email from your favorite coffee brand with a coupon for your next purchase, just when your coffee is running low. How likely are you to make that purchase? At least 60% likely, according to research. The research also shows that this type of personalized campaign is very effective and can deliver up to 48% more revenue for the brand.

Personalized marketing is crucial to driving revenue growth, as a study by McKinsey shows that fast-growing companies drive 40% more revenue from personalization than slow-growth brands. But unfortunately, the B2B brands in high-growth markets across LATAM and sub-Saharan Africa still lag the B2C industry in providing personalized marketing.

There is, however, a huge incentive to figure it out, as becoming a leader in personalized marketing can generate over $1 trillion in value. To unlock this value and generate top-quartile performance with personalization, FMCG brands need to build an excellent data capturing and analytics engine that will enable marketing leaders to tailor their offerings to reach the right individuals at the right time.

Why is personalized marketing vital for FMCG brands?

As online interactions surged in the wake of the pandemic, more customers became exposed to the personalization practices of the B2C industry - from personalized movie recommendations on Netflix to carefully curated music playlists on Spotify and recommended products on e-commerce platforms. As a result, research shows that 70% of customers expect personalization interactions more than ever, and 76% get frustrated when these interactions don’t happen.

Personalized marketing is even more critical in the B2B industry, as it’s a traditionally low-loyalty environment. FMCG distributors and retailers will often switch to carrying the products of any brand with the most attractive trade marketing campaigns or promotions. The data also supports this, as 72% of customers say they expect the brands they buy from to recognize them as individuals and create positive experiences that make them feel special.

However, creating personalized trade marketing promotions and campaigns is almost impossible for FMCG manufacturers in high-growth markets due to the lack of real-time, syndicated data across the supply chain and an integrated data analytics solution. It’s therefore not surprising that only 15% of B2B marketing leaders believe that their company is on the right track with personalization.

See how a lack of merchant engagement costs FMCG brands billions of dollars

The data challenge in high-growth markets

Personalization is impossible with the ability to understand customers’ unique needs on an ongoing basis. With real-time data on what a consumer needs or will need in the future, FMCG brands can easily recommend products to meet those needs, leading to increased sales and higher revenue. For example, Amazon and other e-commerce platforms can provide valuable recommendations to shoppers based on the data generated by both the user and the others on the marketplace. These personalized recommendations are responsible for 35% of all sales.

Available data also shows that customers are happy to share data for a more personalized offer; however, FMCG brands across LATAM, Sub-Saharan Africa, and other high-growth markets lack the capacity to capture this vital customer data. For these manufacturers in high-growth markets, end-to-end visibility across the supply chain is almost impossible, as brands cannot access any data on their products once it leaves the warehouse to the distributor and retailers. The fragmented nature retail landscape also means that field agents cannot capture a detailed view of the market in real-time. Ultimately, FMCG marketing teams are left blind and can only design generic promotions and campaigns that cannot drive consistent, month-on-month growth.

Speaking on the data challenge that FMCG companies in high-growth face, Director of Sellers Marketing at RedCloud, Samantha Norman said, “One thing we see when we engage with FMCG brands and larger distributors is the “data darkness" that they have to operate in. It’s honestly quite astonishing to see these businesses, who trade millions of dollars in monthly transactions, lacking so much valuable insight into their product consumption trends.

As a marketer who understands the power of data, I have made it my mission to share with these businesses the true value of data and how they can leverage analytics with RedCloud's Open Commerce to improve marketing operations and outcomes for their supply chains.

Companies with advanced personalization capabilities have found proven ways to increase revenues by 5-15% and increase marketing spend efficiency by 10-30%, primarily by deploying direct, personalized communications and recommending the right products at the right time. The only way FMCG brands can unlock marketing success with personalized marketing is to develop systems that can collate and analyze real-time transaction data across the entire supply chain. Furthermore, brands need a data analytics engine that can identify changing demand patterns and deliver actionable insights based on the captured data on easy-to-understand dashboards.

That engine is Open Commerce.

Build data excellence and unlock personalized marketing at scale with Open Commerce

Open Commerce is a new way of trading that unlocks the full value of the supply chain by connecting FMCG manufacturers, distributors, and retailers on a single digital platform. With Open Commerce, FMCG marketing leaders can access valuable data on their customers in real-time and leverage that data to create data-driven growth campaigns that work.

RedCloud has built the world’s first Open Commerce platform, Red101 Market, and decentralized digital trading in high-growth markets, making it easy for any retailer to trade digitally and directly access any brand or distributor.

With Red101 Market, we have taken the secret behind the success of e-commerce giants like Amazon, and placed it in the hands of every manufacturer, distributor and retailer. Unlike traditional e-commerce platforms, however, sellers gain visibility over who buys their products and where the demand for those products is. The platform captures real-time syndicated transaction data across the entire supply chain, and the in-built market intelligence software analyzes the data to provide actionable insights, which are then displayed on a customizable dashboard

Now, marketing leaders in the FMCG industry can better understand their customers and create promotions that drive growth. Sales teams can also function more effectively, as sales reps can evolve from simply visiting retailers or distributors to take orders. Instead, the sales reps are transformed into intelligent territory managers who can drive growth at scale.

The future of Commerce is Open, and RedCloud is unlocking that future. Schedule a demo today to discover how you can unlock personalized marketing at scale and drive consistent, month-on-month growth for your brand.

What you need to know about Open Commerce - A live conversation from the market

Every year, billions of dollars’ worth of consumer goods are sold in high-growth markets. However, the supply chain that moves these products from the manufacturers to distributors and eventually retailers is broken and no longer fit-for-purpose. The current traditional distribution model is inefficient, cash-based, and depends almost exclusively on manual processes.

This inefficient distribution system prevents brands from driving sales growth, as it provides zero visibility across the supply chain. As a result, distributors are forced to spend more time and money to distribute essential products to retailers across the highly fragmented market.

Digitizing the B2B supply chain across the retail market can increase its efficiency, but there are no digital solutions that empower brands to gain control of their supply chain and increase distribution effectiveness amongst existing channel partners.

But Open Commerce is changing this.

Open Commerce is a new way of trading that unlocks the full value of the traditional supply chain. With Open Commerce, brands and distributors can digitize the entire distribution process, making it possible to drive consistent growth and move goods from the manufacturer to the end consumer as quickly and cheaply as possible.

Taking Open Commerce to Toiletries and Cosmetics Manufacturers in Nigeria

In July 2022, RedCloud sponsored a CEO’s event for Toiletries and Cosmetics manufacturers in Nigeria. At the event, our COO, Soumaya Hamzaoui, presented our bold vision for the future of the $3 billion toiletries and cosmetics industry. A future powered by Open Commerce, where brands and distributors have complete visibility and control over their supply chains and distributors.

The CEOs in attendance were very excited by the possibilities that Open Commerce presented for their businesses and asked several insightful questions. We’ve compiled some of the questions and the brilliant responses Soumaya gave.

Note: The questions and answers have been lightly edited for more clarity.

RedCloud COO, Soumaya Hamzaoui, answering questions at a CEO's event in Nigeria
Our COO, Soumaya Hamzaoui taking questions at the just concluded CEO's event in Nigeria

Question: One of your aims is to support small businesses and retailers. How do they subscribe to your services, and how do they benefit from that subscription?

Soumaya: Regarding subscriptions, we do not have any. It’s Pay-As-You-Go. So, as you sell on the platform, we take a percentage on each transaction, a tiny percentage, which is much less than other e-commerce solutions take.

To help small businesses, we do more than just give them the technology and leave them to figure it out. Many of these small businesses operate in a world where everything is written on paper, so we’re investing in a solid team that will educate these retailers and show them how best to leverage the technology. Our field officers have worked with many small businesses and retailers to develop several use cases for our solution, and as a result, we’re happy to report massive growth of up to 40% for small businesses.

Follow-up question: What is your definition of a small business?

Soumaya: For retailers, a small business can be as small as a kiosk or a one-person mom-and-pop roadside shop. For distributors, it can refer to anyone doing anything from $30,000 worth of trade up to $500,000 and even more. So, we do not have a lower limit on who can use our technology. That’s why we put it on the Play Store, not behind a paywall, so anyone and everyone can access the benefits of Open Commerce.

Question: There are more than ten e-commerce providers in Nigeria right now; what is RedCloud’s position in the market, and how is it superior to any of the other players in the market?

Soumaya: Most e-commerce players today focus on the B2C market segment, but that is not our focus. The few players that are in the B2B sector, there are primarily set up as distribution companies themselves. They buy stock from brands in bulk and sell it at discounted rates into the market, but that is not our model.

Our model is to work with existing players across the distribution chain by providing the technology they need to grow their businesses. We don’t buy stocks and don’t have warehouses, we are a pure technology player, and this means that our partners do not need to worry about us hijacking control of their supply chain.

No company in Nigeria today unlocks the traditional distribution model in this manner, but I am confident that this is how business should be done. No single company can buy all the stock in the market or control the entire supply chain, nor should they be able to. Therefore, we firmly believe in decentralizing the supply chain and empowering brands, distributors, and retailers.

Question: How much of the market do you plan to penetrate? Do you plan to stay with only key accounts?

Soumaya: As I stated earlier, we are not focusing on only key accounts. We are focused on empowering every retailer, distributor, and brand with Open Commerce, no matter their size. We have a strong go-to-market team that is split into multiple levels. Some team members are specifically dedicated to looking after key accounts, while other members of the team look after the long tail of the distribution chain.

We are building a system that can sustain the entire supply chain from end-to-end. This is important because of the data that the market needs. Brands need to understand who is buying your products and what retailers are carrying your products. To provide this critical data and generate real value for everyone, we must do the hard work to go into every part of the market and provide brands with the insights that they desperately need.

 

Schedule a demo today to find out more about Open Commerce and how it can unlock the value in your supply chain and drive growth for your brand.

Win with digital: How FMCGs can unlock value in emerging markets with Open Commerce

By 2025, for the first time in world history, the number of people in the consumer class will exceed the number of those still struggling to meet their basic needs. Over 1 billion new consumers will be created in emerging markets over the next few years, representing a huge growth opportunity for consumer goods manufacturers.

Source: McKinsey Global Institute

However, capitalizing on this attractive growth opportunity can be challenging, especially for more prominent FMCG brands, due to the fundamental difference in how emerging and mature markets operate. CEOs of large multinational consumer brands acknowledge that despite their greater size, and larger capital bases, they often struggle to hold their own in emerging markets. Available data shows that smaller brands captured 45% of growth, and the private label grew by 30%. This contrasts with larger brands, which have only generated 25% of growth over the same period.

In this article, we examine the peculiarities of selling and distributing consumer products across markets and provide a playbook on how FMCG brands of any size can leverage data to unlock new sales opportunities and drive growth.

 

The traditional trading model in emerging markets is costing you sales opportunities

 

Most emerging markets still follow a traditional trading model, where brands depend on channel partners to deliver last-mile delivery to small retail outlets and roadside shops scattered around rural and urban areas. This value chain, which has remained unchanged for decades, prevents brands from fully penetrating the market and capturing public demand.

One striking feature of the retail landscape in emerging markets is the fragmented distribution network comprising various channel partners. These channel partners often include large and small distributors, wholesalers, dealers, stockists, and smaller retailers, who are the eyes and ears of the manufacturers. As a result, they help brands achieve much-needed market visibility across multiple geolocations and understand the rapidly changing demand patterns in the market.

Find out how you can build resilient supply chains for your FMCG brand

 

However, the traditional market structure doesn’t provide enough visibility across the market to enable brands to make strategic data-driven decisions in real-time. The fragmented nature of the distribution network means that once a product leaves the manufacturer’s warehouse, the brand loses almost all visibility on that product as it moves from one channel partner to the other. 

To win in emerging markets, it’s imperative that FMCG brands build dynamic supply chains, where individual channel partners, both large and small, work together to provide valuable data across the value chain and implement corporate data-driven strategies on the ground.

Data-driven collaboration with distributors and retailers to drive sales growth

 

Most FMCG brands already recognize the need to capture data across their supply chain, with 86% of B2B companies believing that they can do much better with data. They want to know what’s happening in the distributors’ vans and the retailer’s shelves because that data can help reduce distribution costs, exploit price opportunities, and unlock granular pockets of unmet demand.

Unfortunately, many of the existing channel partners who make up the nerve center of the distribution network still rely on manually jotted down sales notes to make critical inventory decisions. A surprisingly large number of distributors don’t even have an email address to send or receive invoices.

Therefore, FMCG brands need a strategy that changes the mindset of distributors on data-driven collaboration and an easy-to-use digital solution that has apparent incentives for the distributor. Accomplishing this will require sales and marketing teams to go a step beyond simply creating an app and throwing it at distributors. Instead, they must devise a development plan that leverages existing technology and lays the foundation to hand-hold small distributors and train them to build simple workflows based on easy-to-use digital solutions.

 

 However, the million-dollar question is, what digital solution is available?

 

Open Commerce is the best data-analytics solution for FMCG brands in emerging markets

 

For years, many FMCG brands have tried to digitize their distribution networks with little success. Market data shows that, on average, 70% of all digital transformation initiatives by FMCG companies eventually fail to deliver on the promised results – and it gets worse.

 

The rise of e-commerce marketplaces adds another layer of complexity to driving digital transformation, leaving brands with an important question.

Should FMCGs sell their products on e-commerce marketplaces?  They can, but they risk losing total control of their supply chains, as most e-commerce companies own their fulfilment networks and often don’t share market data with the brands who sell on their platform.

 

See how traditional e-commerce platforms hijack the supply chain and cut off distributors in emerging markets.

 

On the other hand, building a digital solution in-house hasn’t been met with much success, as distributor and retailer adoption rates remain critically low.

 The solution is Open Commerce.

 

Open Commerce is a new, digital way of trading that unlocks the full value of the traditional distribution chain. Unlike traditional e-commerce, Open Commerce allows brands to directly engage their distributors and sell to them digitally, so they retain control of their supply chain and can even build dynamic, resilient distribution networks at the touch of a button.

But it doesn’t end there.

 

Accelerate sales growth in emerging markets with RedCloud’s Open Commerce platform

 

RedCloud has built the world’s first Open Commerce platform, Red101 Market. It’s a new way of trading that connects brands, distributors, and other channel partners on the same platform, making collaboration possible. With Red101 Market, distributors can buy products directly from brands on the B2B marketplace and sell to retailers on the same platform, providing end-to-end visibility across the entire supply chain.

 

RedCloud’s Open Commerce platform allows brands to see the consumption patterns in real-time across the market. We also have an inbuilt marketing intelligence system that analyses the data generated to provide actionable insights that can be leveraged to identify growth opportunities in the market and capitalize on them.

Red101 Market has also solved the distributor adoption problem by providing distributors with valuable incentives that will compel them to switch to digital commerce. We also enable them to sell to more retailers across multiple geolocations, which leads to consistent growth. Finally, RedCloud has solved the cash payment problem, making it possible for retailers and other small shop owners to pay for their products online, even if they don’t have a bank account.

To learn more about how RedCloud has helped numerous brands unlock the growth opportunity across emerging markets, schedule a demo with us today, and let’s unlock outsized growth for your brand.

RedCloud partners with Thokoman Foods to improve supply chain efficiency with Open Commerce

UK-headquartered Global Technology firm, RedCloud Technologies, has partnered with Thokoman Foods PTY (LTD), South Africa’s 2nd largest peanut butter manufacturer to help digitize their supply chain and increase distribution efficiency. 

This partnership will see Thokoman Foods easily penetrate more retail markets across South Africa by leveraging the world’s first Open Commerce platform built by RedCloud.The Open Commerce platform, Red101 Market, unlocks the full value of the traditional supply chain across emerging markets and will enable Thokoman Foods to build more efficient distribution channels, reach new retailers and deliver sustainable sales growth. 

Thokoman currently distributes its products to 128 hypermarkets, 2133 supermarkets, 8966 mini-markets, 417 wholesale outlets, and 26,856 grocery stores. However, the brand has identified the need for a digital solution that provides increased visibility and real-time insights into the supply chain across multiple geolocations. RedCloud’s Open Commerce technology will provide Thokoman with an easy-to-use platform that captures real-time data from every distributor, retailer, and sales outlet and analyzes that data to provide actionable insights that can be leveraged to improve supply chain efficiency and drive sales growth.

Speaking on the partnership, Alan Devraj, the Sales Director at Thokoman Foods, said, “We look forward to our partnership with Redcloud and are excited to be a part of their forward-thinking in making the supply chain faster, simpler, and more efficient.” 

Thokoman Foods also plans to introduce a new range of high-quality and responsibly-packaged food products into the South African market, and, according to the company, adopting RedCloud’s digital commerce solution is a critical part of this plan,  as it enables them to easily build an e-store where any distributor and retailer can access their brand’s food products.  

Samantha Hamzaoui, the Chief Operating Officer at RedCloud, said, “We are excited to partner with Thokoman foods to help digitize their entire supply chain and make the previously complex distribution process more efficient with the world’s first Open Commerce platform. At RedCloud, Our mission is to digitize the FMCG supply chain across emerging markets so that our business partners reach more customers, build better relationships across their supply chain players, and drive business growth. This partnership allows us to achieve that on a large scale.”

The Red101 Market App is the world’s first Open Commerce platform and is currently live in over five markets, with over 100,000 actively trading retailers signed onto the platform and hundreds more joining daily. With Red101 Market, RedClod is delivering on its promise to help FMCG brands, distributors, and retailers increase revenues, reduce costs, and drive business growth.

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain.

Driving growth in the toiletries and cosmetic industry with Open Commerce

A few years ago, the beauty industry (comprising toiletries, cosmetics, fragrances, and personal care) was the fastest growing FMCG sector and the primary diver of the overall FMCG growth. However, COVID changed everything. With more people staying at home and covering their faces with masks, one of the best-performing sectors found itself struggling. As a result, overall retail sales fell by 15 percent, and revenues dropped by up to 30 percent as brands were forced to deal with closed stores and reduced demand.

Fortunately, the beauty sector is resilient, and experts predict a return to growth in 2022 as sales continue to increase, especially in emerging markets like Latin America. However, the expected rapid growth will be driven majorly by e-commerce and other digitalization trends rather than a return to brick-and-mortar stores. For example, data from PayU, one of the largest payment processors, shows that online spending in Latin America’s beauty category grew by 133% in 2020. Other external analysis showed that the predicted online spend on cosmetics and other beauty products would reach $4.3billion by 2022, up from $3.8billion in 2020.

This article will show how brands in the beauty sector can unlock the hidden growth potential of digital commerce in emerging markets to increase sales and maintain market share.

The challenge for toiletries and cosmetics manufacturers in emerging markets

Across emerging markets, toiletries and cosmetics manufacturers face a major supply chain challenge. The retail market is fragmented, and the supply chain that ensures that products get to retailers’ shelves in time has become increasingly vulnerable to disruption. Rising prices due to supply chain issues also pose a problem, as emerging market consumers are price sensitive, and a slight price increase can shift consumers to a competitor.

Find out how digitalized distribution can help reduce the prices of goods.

The traditional route-to-market depends on manual processes that don’t give toiletries and cosmetics brands visibility or control over their supply chain. For example, sales teams don’t know who their distributors sell their products to, and the brand loses visibility and control of its products immediately after the delivery trucks leave the warehouse.

Without the ability to identify where the demand for their products is or what retail channels are the most effective, driving sales growth becomes significantly more challenging.

Sales teams now must depend on data generated by third parties, which can be costly and often not useful for decision-making in real-time.

The only alternative is to wait for sales reps and field agents to cover a few geolocations, as the retail market is too fragmented to cover. Unfortunately, gathering data through these physical visits is costly and inefficient as the data is often collected and entered manually, making it prone to errors and personal biases.

Learn how the traditional supply chain leads to slower sales growth.

Our conversation with smaller, local cosmetics and toiletries brands reveals that there’s often a problem of low-quality imitations sold by some retailers, which hurts the brand image.

Take the case of Linda, a consumer who walks into a small retail store and unfortunately purchases a low-quality imitation of a locally branded cosmetic product. Like many younger consumers, Linda will likely switch to a competitor if she believes the brand can no longer be trusted. But, more than that, she is more likely to talk about her experience with other consumers online and convince them to switch brands.

Beauty brands need a more efficient way to communicate with their distributors and engage merchants to drive sales. A digital solution that enables manufacturers to see where the demands for their products are and effectively control the distribution of their products will unlock the growth already predicted in the sector.

Learn how to increase brand loyalty and drive merchant engagement with Open Commerce

 

Open Commerce is the solution

Open Commerce is the solution to the challenges beauty brands face in emerging markets. This new digital way of trading unlocks the full value in the traditional supply chain by digitizing existing business relationships between brands and distributors and opening new retail channels across multiple geolocations.

RedCloud’s Open Commerce capabilities

RedCloud has built the world’s first Open Commerce platform that enables brands, distributors, and retailers to trade directly without any restrictions. Unlike other e-commerce solutions that attempt to hijack the supply chain from brands, our platform is decentralized and provides a level playing ground for everyone.

See how traditional e-commerce is hijacking control of the distribution chain from brands.

RedCloud also empowers beauty brands to build a new and efficient route-to-market by providing increased speed, flexibility, and visibility across the entire supply chain.

  • Speed: B2B customers, including your retailers and distributors, expect the same speedy delivery and personalized experiences from B2B brands as they do from smaller, digitally native B2C brands.

    However, the traditional distribution model often leaves retailers and distributors waiting for a long time, sometimes weeks, for sales reps to visit them and deliver orders. RedCloud allows you to manage orders more efficiently, meet your retailers’ demands and avoid costly out-of-stock situations.
  • Flexibility: How resilient is your supply chain, and how quickly can your brand bounce back from a supply chain disruption?

    RedCloud helps you build a flexible and resilient supply chain (which is essential to driving growth) by providing a platform that allows for direct connection with every channel partner simultaneously. You can directly engage and communicate with every distributor and retailer across multiple geolocations, which makes it easier to restructure your distribution strategy in the event of a supply chain disruption.
  • Visibility: Can you identify in real-time where the demand for your products is and pinpoint who is buying your products, right down to the minute?

    RedCloud enables you to do this and more by capturing valuable data at POS, syndicated across the entire supply chain. Our platform also has an integrated marketing-intelligence engine that analyzes the data captured and provides actionable insights that can be leveraged to drive growth by up to 25%.

 

Open Commerce helps toiletries and cosmetic brands in emerging markets drive growth

Open Commerce is what your beauty brand needs to capture the enormous growth opportunity in emerging markets. Schedule a demo today to see how RedCloud can help you increase sales and unlock consistent, month-on-month growth.

​​Buy-Now-Pay-Later: A new line of credit for FMCG retailers in emerging markets

If you wanted to buy an expensive item that you ordinarily couldn’t afford, like a $300 leather jacket, how would you pay for it? While many people would pay with a credit card, more consumers are switching to Buy now, Pay Later (BNPL) services.

BNPL, just like credit cards, allows shoppers to spread the cost of a purchase over multiple (usually four) installments. However, unlike credit cards, most BNPL options are interest-free and don’t require credit checks, making them an attractive option for consumers.

BNPL services mainly target smaller consumer purchases but can potentially deliver the credit that retailers and small businesses across emerging markets desperately need. This article examines why BNPL is so popular and shows how it can be used to provide retailers in emerging markets with the credit they need to grow their businesses.

Why is Buy-Now-Pay-Later (BNPL) so popular?

BNPL has become increasingly popular over the last few years, with reports showing that the BNPL industry is currently worth over $100 billion and accounts for over 2% of all e-commerce payments. The industry is also expected to grow to 15 times its current size to account for around $680 billion in transaction volume by 2025, or 14% of all e-commerce payments.

The rapid growth of BNPL is due to several factors, some of which include:

  • A shift to e-commerce catalyzed by the pandemic: A UN report shows that the COVID-19 pandemic accelerated the adoption of e-commerce, with emerging market consumers making the greatest shift to online shopping. This made it easy for fintech companies that offer BNPL to expand their services rapidly.
  • Low-interest rates and zero fees: Unlike other traditional forms of credit, BNPL typically charges zero or very low fees and interest rates, making them attractive to online consumers who were experiencing a squeeze on their finances.
  • Doesn’t require existing credit checks: Most BNPL services don’t require credit cards or a credit check, making them ideal for consumers who aren’t eligible for credit cards or lack access to formal credit facilities.

Fintech brands, and other large companies, have recognized the huge opportunity BNPL presents and continue to enter the space, with Square acquiring BNPL provider Afterpay for $29 billion, and Apple announcing Apple Pay Later, its internal BNPL service launching by the end of 2022.

Graph showing the increasing popularity of Buy Now Pay Later

How Buy-Now-Pay-Later can help brands and retailers drive growth in emerging markets

John is a small retailer in Soweto who sells biscuits and receives orders when sales reps visit his store every month. However, the biscuits are in high demand and are usually sold out within two weeks of his order. Without direct access to the sales reps or visibility on the next delivery, he must wait for the next order and often turns customers away due to the biscuits being out of stock. John is also limited to the little cash he makes from his business as he doesn’t have a bank account. Without formal financial records, he cannot access loans to order more biscuits and grow his business, so he keeps losing customers.

Across emerging markets, over 200 million estimated business owners like John, cannot access traditional forms of credit and are excluded from the formal financial ecosystem. The gap between the credit needed by these micro, small, and medium enterprises (MSMEs), and the credit available, is estimated to be above $5 trillion.

graph showing the penetration of formal credit in developed and emerging markets

Available data shows that digital financial services like BNPL and digital payments can provide low-interest credit and financing options to over 1.6 billion small retailers like John and increase the volume of credit available in emerging markets by over $2 trillion. Like how existing BNPL services allow consumers to buy products and pay in installments, brands and distributors could allow retailers to buy more stock or other items needed for their stores, like refrigerators, and pay in installments.

However, making BNPL work for B2B retail in emerging markets would require digitizing the traditional supply chain. BNPL services work for consumers because more people are willing to shop for products and pay online. In contrast, most retailers in emerging markets don’t trade digitally, which is a significant barrier to providing access to the credit that they need.

Digitalizing the traditional retail supply chain in emerging markets has been a significant challenge for FMCG brands, despite numerous efforts to penetrate the largely informal market. FMCG brands and distributors have created mobile apps and digital payment platforms and even partnered with e-commerce providers to bring digital trading to small retailers with little success. This failure to penetrate the market has made providing credit to retailers at scale an almost impossible task.

Until now, that is.

Provide credit to retailers in emerging markets with Open Commerce

RedCloud has brought digital trading to retailers in emerging markets with the world’s first Open Commerce platform, Red101 Market. Open Commerce is a new, decentralized digital trading system where brands, distributors, and retailers can directly trade together on a single platform. While traditional e-commerce hijacks control of the entire supply chain and restricts brands and distributors from directly engaging with retailers, Open Commerce is focused on digitalizing the existing distribution chain and enabling brands and distributors to reach new and existing retailers.

We have also solved the low adoption rate of digital trading among retailers by providing a compelling value proposition that incentivizes retailers to start trading digitally. With Red101 Market, John can directly connect to brands and distributors to order products when he needs them and can pay online. In addition, Red101 Market has made digital payments easier than ever by building the world’s largest local payment network, so retailers like John in over 100 countries can walk into any of our 2 million pay-in points, digitalize their cash and pay for their FMCG products digitally, even without a formal bank account.

By providing a digital trading platform that retailers want to use, and an easy-to-use digital payment platform, brands, and retailers can now identify high-performing retailers and offer BNPL services. The payments can also be deducted automatically from the retailer’s wallets, making it easy for retailers to continue accessing even more credit.

With Open Commerce, brands can identify areas of high demand and provide high-performing retailers with targeted upsell and cross-sell offers that will drive sales growth and increase revenue.

Schedule a demo today to see how RedCloud can help your brand unlock the full value of your supply chain and drive sales growth by providing retailers with BNPL services at scale.

Embrace e-commerce without breaking your supply chain

The CPG industry is at a digital-commerce tipping point after lagging behind other sectors for years, accelerated by the long-lasting effects of the pandemic and its lockdowns on consumer behavior. While the total share of FMCG goods sold online still hovers under 10%, it’s expected to more than double globally over the next few years. Digital Commerce is also expected to grow twice as fast in emerging markets as in developed markets, as smartphone and internet penetration continues to accelerate in developing economies.

Share of e-commerce as a percentage of total FMCG sales across 5 geolocations

Online FMCG growth potential exists in nearly all markets, and most major FMCG players, especially in emerging markets, recognize that digital commerce will play a key role in driving growth in the future. However, the current e-commerce model in the retail market doesn’t help brands, distributors, or retailers grow their businesses or solve the existing supply chain problems delaying growth.

This article examines how traditional, centralized e-commerce cuts off millions of buyers and sellers. It also introduces a new, open model of e-commerce that provides brands, distributors, and retailers across emerging markets with the tools they need to manage their supply chains and grow their businesses.

Are e-commerce marketplaces ruining the supply chain?

E-commerce holds a lot of promise for the consumer goods industry, as it enables brands and distributors to create faster, more seamless buying experiences for retailers and can even reduce the prices of goods by creating resilient supply chains. However, with e-commerce marketplaces accounting for 52% of all online retail sales and the top 100 marketplaces accounting for over 95% of those sales, it’s become harder for brands and distributors to reap the benefits of digital commerce.

Source: Ecommerce Germany News

Large e-commerce platforms like Amazon, AliExpress, Mercado Libre, and many others are hijacking the supply chain and eliminating distributors by selling directly to consumers. Manufacturers aren’t safe either, as brands who use these platforms as sales channels also lose control of their entire supply chain. The current e-commerce model is centralized and restricts manufacturers and distributors from accessing valuable data on who’s buying their products or where the demand for their products is across multiple geolocations. Instead, the e-commerce marketplace often controls this data and uses it solely for its own benefit.

Recent reports claim that one e-commerce giant in India used proprietary data of other brands on its own marketplace to replicate best-selling products under private label owned exclusively by the marketplace. The private label products were then rigged to appear at the top search results on the marketplace, effectively destroying the rival brands on the platform.

E-commerce marketplaces also charge high commission fees on each sale, up to 20% in some cases, in addition to other marketing costs. However, there’s often no visibility over the impact of this marketing, and brands cannot access any insights that can be leveraged to grow their business or better manage their supply chains.

This monopoly power exerted by centralized e-commerce marketplaces shows that the traditional e-commerce model is broken. Many brands and retailers are stuck and completely dependent on the marketplace, just an algorithm change away from seeing all their online sales evaporate. So, it’s not surprising that brands and retailers rank the dominance of large e-commerce marketplaces as the top concern in their efforts to drive business growth with digital commerce.

How FMCG brands and distributors can protect their supply chain with Open Commerce

With traditional e-commerce, brands in emerging markets are faced with a dilemma. They can upload their SKUs to a third-party marketplace and reach an increasing number of consumers who want to buy online. However, they’ll have little or no visibility over their digital sales and inevitably lose control over their sales growth to the platform. In addition, the brand would still depend on the inefficient, traditional supply chain to reach the vast maturity of their current market – a true lose-lose situation.

FMCG brands and distributors need an e-commerce solution that unlocks the full value of the traditional supply chain and makes distribution more efficient without alienating current channel partners.

This solution is Open Commerce.

Go digital and protect your supply chain with Open Commerce

RedCloud has built the world’s first Open Commerce platform, where brands, distributors, and retailers can directly connect and trade together on a digital platform without unnecessary restrictions. Unlike traditional e-commerce marketplaces, Open Commerce is decentralized and is focused on digitalizing your current supply chain rather than hijacking it.

With Open Commerce, brands can now sell to both new and existing distributors and retailers while also reaping the full benefits of digital commerce. FMCG manufacturers and distributors will gain granular visibility syndicated across the entire supply chain in real-time, as every distributor and retailer across the fragmented retail market is transformed into a data point. This will enable sales and marketing teams to identify precisely where the demands for their products are across multiple geolocations and leverage the data to create data-driven go-to-market strategies.

Open Commerce also solves the digital payment challenge that e-commerce marketplaces have been unable to solve for decades. RedCloud has built the world’s largest payment network with over 2 million pay-in points across 100 countries. Any retailer, even in the most remote locations, can instantly digitize their cash, even without a bank account, and use that cash to pay for their FMCG products anytime.

Retailers also have nothing to fear and everything to gain from Open Commerce, as they can manage their stores from their mobile phones. Using the Red101 Market app, retailers can directly access any brand or distributor, place orders for their stock at the best possible prices and make online payments. In addition, top-performing retailers can access loans, supply-chain financing, and other credit facilities from brands, distributors, and other financial services providers, which would help them grow their businesses.

Schedule a demo today to see how RedCloud is helping thousands of FMCG brands, distributors, and retailers unlock the full potential of digital commerce .

Why FMCG brands love Open Commerce - A live conversation from the market

Every day, consumer goods manufacturers across emerging markets produce billions of consumer products that need to be moved to retailers’ shelves. However, the supply chain responsible for moving these goods is broken and no longer fit-for-purpose. The fragmented nature of the retail industry, lack of visibility across the supply chain, and an overwhelming reliance on cash payments have led to delayed delivery and increased prices of consumer goods.

Recent global supply chain disruptions have revealed the shortcomings of this broken distribution model, as over 40% of all FMCG brands have experienced supply chain disruption in the last few years. This has also slowed business growth, as larger FMCG brands have grown by only 0.4% in the last few years.

It is, therefore, no surprise that CPG companies in emerging markets now recognize the need to embrace digital commerce and digitally transform their supply chains to make them more effective and cost-efficient. A recent survey of over 500 FMCG CEOs showed that end-to-end visibility was ranked as the top factor responsible for a successful supply chain. Another survey also showed that 90% of FMCG brands plan to change their supply chain networks, and over 40% plan to increase their investment in supply chain management with the primary aim of increasing visibility and improving resilience.  

Open Commerce is the solution to building better supply chains

 

To build more agile and resilient supply chains, FMCG brands in emerging markets need a digital solution that connects all supply chain players and provides full visibility across the distribution chain. With these insights, stock shortages, changing customer demand, and other important information will be captured and communicated in real-time so that brands can adjust their distribution strategies.

The only platform that offers all these features, and more, is Open Commerce. RedCloud’s Open Commerce platform, Red101 Market, has helped numerous brands digitize their supply chains and gain valuable, real-time insights that can be leveraged to increase distribution efficiency, increase sales, and drive business growth.

How LATAM FMCG brands are using Open Commerce to grow their businesses

 

Recently, RedCloud’s CEO, Justin Floyd, and COO, Soumaya Hamzaoui, visited the LATAM region to speak with FMCG brands, distributors, and retailers to discover how they’re leveraging the trade freedom and powerful opportunities that Open Commerce provides. Soumaya talked at length with Gabriel Netto, the Sales Manager at Lagostão Pescados, one of the fastest-growing seafood distributors in Brazil, about the value that RedCloud brings to the brand.

Here is a lightly edited transcript of the conversation:

 

Soumaya: Why did you partner with RedCloud, and what do you expect from this partnership?

Gabriel: We’re happy with this partnership, as we had been searching for exactly what Red101 Market is offering us - greater visibility across the supply chain with a digital solution. We believe in embracing the latest market innovations, which is why we closed this partnership, and we’re confident that RedCloud will help us gain new customers and drive significant sales growth.

By partnering with RedCloud, we also expect to become a pioneer of supply chain digitalization in our market.

Soumaya: Would you walk me through how your customers use the product in their businesses?

Gabriel: For us, getting our customers to use the Red101 Market app is easy because we’re in the food business. Many of our clients are restaurants who need various types of food products and want to know the different matches they can do. So, when our clients need us, we would offer consultancy services.

Sometimes they’re looking for a specific product, but with our consultancy team, we can suggest other possibilities for food recipes that work better. With Red101 Market, the client can easily make an order for the suggested products right on the call, which has helped us increase our sales significantly.  

Soumaya: What features are you more excited about in the app?

Gabriel: Definitely real-time payments. With real-time, online payments, we get to receive orders with payments completed in full, which is a great improvement to the former manual payment method. Now, we don’t need to rely on only the CNPJ credit analysis, which means that we can process the order faster and deliver orders within 24 hours in most parts of the region here in São Paulo.

This feature allows us to meet our customer’s demands faster, make more sales, and get paid on time.

Soumaya: What new features do you want to see in the app going forward?

Lagostão Pescados spokesperson: We’d love to see credit card and credit analysis regarding CNPJ consulting on the Serasa platform for us to be more competitive and offer better price options to new, loyal customers as we do with our current customers.

It would also be amazing if we could cross-sell and upsell related products as our customers are checking out soon. That way, we could offer our standard consultancy through Red101 Market and present other food options related to the ones the customer was searching for.

(CNPJ is TAX ID used in Brazil that can be used to analyze a company’s credit rating via a national credit analysis database. Using this rating, distributors can then offer credit facilities and better prices to retailers.)

Soumaya: It’s interesting that there’s a difference between your prices and your competition’s prices. Can you tell me more about that?

Gabriel: Yes, there is a difference. Typically, it’s a small difference, and we advise our customers that if they notice a huge price difference, it’s probably a low-quality seafood product with high water level. Some companies deliberately input high water levels into their products, which is illegal, and then sell them cheaper.

We experimented a while ago, where we measured the difference in water levels in our products and that of other seafood distributors. We found that their products had up to 15% more water than ours, which is significant.

So, our customers know that with Red101 Market, they’re getting high-quality products from Lagostão Pescados.

Soumaya: What are the next steps your brand is taking with Red101 Market?

Gabriel: We plan to add Global Pescados as a brand onto the Red101 Market platform. Global Pescados is a second brand that we’ve built, which is associated with Lagostão Pescados, and focused on selling seafood in small quantities in supermarkets and malls. Of course, restaurants, hotels, and other market sectors can buy the brand, but we’ve packaged the products into little packs, which is more attractive to supermarkets.

These supermarkets will be able to order Global Pescados right on the Red101 Market app and pay online. This means that we don’t have to physically go into the supermarkets, saving us time and money.

Soumaya: Thank you so much for taking the time to speak with me today. It’s great to hear all the amazing ways Open Commerce is helping Lagostão Pescados digitize the supply chain and drive sales.

Gabriel: You’re welcome, Soumaya. It was great talking with you too. We’re excited about this partnership and its opportunities for the future!

 

Schedule a demo today to learn more about how Open Commerce can help your FMCG brand control the supply chain and increase sales.

 

RedCloud announces new partnership with Kwality Brands to increase market reach and drive business growth

Global technology firm, RedCloud, has announced a new business partnership with South African detergent manufacturer Kwality Brands, to increase sales and expand market reach with the world's first Open Commerce platform, Red101 Market.  

This partnership will see Kwality Brands, one of the top brands in the South African soap and detergent industry, gain access to a wide network of retailers across South Africa who already use  RedCloud’s Open Commerce platform, Red101 Market, to trade digitally in their stores.  

Kwality Brands is the manufacturer of Exello and Exceed, a line of laundry products, and is one of the few local manufacturers of washing liquid, powders, and detergents in South Africa. They’ve been seeking to increase market share amid fierce competition from other multinational brands, and RedCloud was the perfect partner to help Kwality Brands achieve this, as the partnership will provide Kwality Brands with over 1,000 potential new points of sale via the Red101 Market app. In addition, by joining the world's first Open Commerce platform, the brand will gain end-to-end visibility across their supply chain and see in real-time who is buying their products and where the demand for their products is, segmented by geolocation.

Rafiq Tayob, the CEO of Kwality Brands, expressed delight at the opportunity RedCloud presents for the company’s expansion plans. Rafiq, who had previously invested heavily in other digital marketing efforts without generating any significant returns, said, "We at Kwality Brands have been attempting to enter the informal sector with our Exello and Exceed product range. However, we were unable to find a suitable partner to drive this strategy. Red101 Market presented their strategy to us, and with their local and international exposure, skilled workforce, energy-driven team, knowledge in the FMCG market, and incorporation of digital marketing, we at Kwality Brands took the decision to partner with Red 101 Market to achieve our objectives. I look forward to growing our brand through their platform  and networking.”

RedCloud is committed to bringing digital commerce to millions of FMCG brands, distributors, and retailers in emerging markets who currently trade offline. To achieve this, RedCloud has built the world’s first Open Commerce Platform, Red101 Market, a decentralized, open trading environment where brands, distributors, and retailers can connect and trade directly. With Open Commerce, the consumer goods supply chain in emerging markets is made more efficient, and FMCG brands like Kwality Brands can grow their business and reach a wider market without increasing costs. 

Commenting on the partnership, the CEO of RedCloud, Justin Floyd, said, "We’re glad to partner with Kwality Brands to unlock the market and drive business growth with Open Commerce. Kwality is a great brand with an incredible product line, and we’re confident that our solution will enable them to expand its market reach, improve sales, and grow the brand. In addition, the Red101 Market app provides the brand with unprecedented visibility into their distribution chain, so they can identify and maximize growth opportunities in real-time." 

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain.

RedCloud Partners with V-Martins Supplies to expand market reach in Nigeria with Open Commerce

RedCloud Technologies has recently announced its business partnership with V-Martins Supplies, a large beverage distributor in Nigeria, to increase market reach and drive revenue growth by leveraging the world’s first open commerce platform, Red 101 Market.

The partnership was driven by V-Martins Supplies’ desire to expand its market reach and drive revenue growth without increasing costs. With RedCloud’s Open Commerce technology, V-Martins Supplies have a new digital sales channel that enables them to reach a wider network of retailers across multiple geolocations.

Since 2003, V-Martins Supplies has been committed to distributing its premium beverage brands across Southwest Nigeria. However, in a bid to expand operations and reach more retailers and markets within the country, they’re looking to incorporate digital solutions to address the operational and logistical challenges typically experienced in the FMCG industry.

V-Martins will successfully digitize the entire supply chain by leveraging RedCloud’s decentralized Open Commerce platform that connects brands, distributors, and retailers directly on a single platform. They will also gain the ability to see where the demand for their products is in real-time and create targeted, cost-effective growth campaigns to drive sales growth and increase revenue. In addition, this partnership with RedCloud provides V-Martins with direct access to over 10,000 retailers across Nigeria who already use the Red101 Market app to buy FMCG products for their stores. 

V-Martins is also excited to leverage RedCloud’s advanced supply-chain financing program, where brands and distributors can offer micro-loans and credit facilities to their most loyal retailers, enabling them to grow their businesses. Commenting on the partnership and the exciting opportunities it presents, Victor Udeh-Martin, the Managing Director at V-Martins Supplies LTD, said, “The joy of being in business is an effective expansion of your sales/marketing network, and we know that our partnership with RedCloud will effortlessly bring this expansion to us.” 

Also talking about the partnership, Justin Floyd, co-founder, and CEO of RedCloud, emphasized the commitment of the company to facilitate open trade in emerging markets. 

He said, “With our decentralized open commerce platform, FMCG brands and distributors worldwide get to experience business growth and expansion on their own terms, free from the undue restriction that traditional e-commerce places on businesses. Open Commerce empowers distributors to build resilient supply chains and reach a wide network of retailers that were previously inaccessible to them under the traditional, fragmented distribution model.”

“We’re confident that V-Martins Supplies would benefit greatly from this partnership as they distribute their products to even more retailers. They can expect to gain more visibility, penetrate new markets across Nigeria, and even reward their most active retailers with advanced supply chain financing and micro-loans to help them grow their businesses.” 

Red101 Market, the world’s first Open Commerce platform, is currently live in over five markets (including Argentina, Brazil, Nigeria, South Africa, and Peru) with plans to expand to over 20 markets by the end of 2022. Red101 Market also has over 270,000 registered merchants trading and growing their business with the unique opportunity that RedCloud provides. 

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain.

How to tackle the rising prices of consumer goods with digital distribution.

Shopping for food items and other essential consumer goods has become a luxury for millions of people in emerging economies worldwide, as prices have risen steadily over the last few years and spiked in the last few months. Reports show that 9 out of 10 FMCG manufacturers have increased, or plan to increase, their prices this year, and this isn’t the first hike, as 66 percent have increased prices two or more times in the last two years.

While the increase in prices of food items and other consumer goods is global, it will likely have a higher effect on consumers in emerging markets, especially across the Middle East, Sub-Saharan Africa, and Latin America. According to a report by the Economist Intelligence, food items account for over 40 percent of consumer expenditure in these regions, and the sharp rise in prices of FMCG goods means that many low-income consumers may not be able to afford essential goods.

Source: EIU

This is certainly the case for Um Ibrahim, a 60-year-old widow and street vendor in Egypt, who says that feeding her children has become much harder. She says that the prices of everything has risen, from clothes to vegetables and even poultry eggs. For many consumers like Um, going to bed hungry or being unable to feed their children is a frightening but real possibility.

This article examines how the fragmented, inefficient distribution chains typical of emerging markets have contributed significantly to the price hike and shows how digitizing the consumer goods supply chain can help keep prices low.

Why the prices of consumer goods are rising rapidly

Global prices of consumer goods have been rising rapidly for the last two years, fuelled by the COVID-19 pandemic, international trade wars, significant energy crises, and supply chain disruptions. In addition, the conflict in Ukraine and Russia has also caused the prices of essential agricultural commodities like grains, corn, and oil, to soar. For example, available data shows that global prices of corn and soybean have risen by 17 percent, while wheat prices have risen by up to 40 percent. These commodities are the key raw materials used to produce consumer goods like packaged food, toiletries, beverages, cleaning, and laundry products, among many others.

As the costs of these commodities rise, FMCG companies in emerging economies where there is a significant dependence on food imports (e.g., sub-Saharan Africa, the Middle East, and North Africa) will spend more to produce consumer goods, and these costs get passed down to consumers.

However, the increased costs of raw materials alone are not responsible for the rising prices of consumer goods. According to the IMF, pass-through price increases from manufacturer to consumer are only about 20 percent. The remaining 80 percent of the hike in prices of consumer goods is due to shipping costs of agricultural commodities, processing and marketing of the goods, and final distribution costs.

Distribution costs have risen steadily as supply chain disruptions have multiplied, with 40 percent of retailers blaming high prices and out-of-stocks on supply chain issues. The fragmented distribution chain in emerging markets makes distributing consumer goods significantly costlier and more complex, as brands and distributors depend on a completely manual and inefficient distribution model to get consumer goods to small grocery stores.

The current outlook for prices of consumer goods doesn’t look good, with economic analysis showing that the food prices and inflation will increase significantly across emerging markets. This is particularly problematic, as economists say that increased inflation and the rise of prices of essential goods, in particular, can fuel the risk of social discontent, such as what happened in the Arab Spring in 2010-2012, as the disposable income of consumers were eroded.

Digitalized distribution can reduce the cost of consumer goods

Tackling the rising prices of consumer goods will require concerted efforts from all stakeholders along the supply chain. But, more importantly, FMCG brands and distributors in emerging markets must take steps to mitigate the impacts of supply chain disruptions and reduce distribution costs. The best way to do this is to redesign their supply chains to be much faster and more resilient.

The route to market for consumer goods in emerging markets is fragmented, with over 80 percent of all consumer goods sales occurring in small roadside shops and small grocery stores. This makes distribution inherently complex, as multiple small intermediaries have to cover the same routes and serve the same retailers. The current distribution model also leans towards manual processes, which are slower and more prone to inconsistency and inefficiency than digital and automated processes.

Digitalizing the supply chain can help brands and distributors increase the efficiency of the distribution chain by aggregating orders, creating a lower cost to serve small retailers, which will result in lower prices at outlets. Building a digital distribution chain also provides convenience when ordering stock and reduces the chances of essential items being out-of-stock, so consumers can access the products they need at the prices they can afford.

Leveraging digital technologies can also help FMCG brands and distributors build flexible supply chains. From automated sales plans to dynamic delivery routes, digital distribution makes it possible to intelligently allocate resources to reduce costs and, by extension, lower prices.

However, for many CPG companies and distributors, adopting digital distribution isn’t easy, as there are no solutions that provide end-to-end visibility across the distribution chain in real-time. The few solutions that provide limited visibility are costly, often requiring investments in hundreds of thousands of dollars, and are often too complex for sales reps and marketing staff to use effectively.

This is why we need Open Commerce.

Open Commerce can digitize the supply chain and reduce prices of consumer goods

Open Commerce is a new way of buying and selling online – a decentralized digital commerce platform that empowers brands, distributors, and retailers in emerging markets. Unlike traditional e-commerce, Open Commerce is decentralized and doesn’t charge huge commission charges or high transaction fees. Instead, every player along the supply chain can interact and trade directly without undue interference from the platform, leading to lower costs and prices.

RedCloud has built the world’s first Open Commerce platform, Red101, which provides FMCG brands and distributors with end-to-end visibility across the supply chain, increasing distribution efficiency and reducing distribution costs. RedCloud’s integrated marketing intelligence engine captures outlet-level information in real-time and performs advanced-level analytics to produce clear, actionable insights that inform strategy.

With Open Commerce, inventory management becomes easy, as retailers can place orders for the products they need when they need them. This enables distributors to deliver right on time, preventing stock-outs at the shelves. RedCloud has also eliminated the high costs and risks associated with cash payments in emerging markets by building the world’s largest payment network. This payment network has over 2 million pay-in points across 100 countries, so retailers can physically digitize their cash and pay for consumer goods online using the Red101 Market app.

Schedule a demo with us today to see how RedCloud is helping brands and distributors digitalize their supply chain, reduce distribution costs, and tackle the rising prices of consumer goods.

RedCloud expands its open commerce platform to empower distributors in Argentina.

Global technology firm, RedCloud partnered with three FMCG distributors in the Santa Fe province of Argentina to drive business growth with Red101 Market, the world’s first Open Commerce platform.

RedCloud has announced a partnership with Calfra, Florida, and Irlanda, three large FMCG distributors in the Santa Fe province of Argentina. These distributors are large players in the food and beverage market and carry over 800 SKUs combined. This partnership will enable these distributors to grow their business without increasing costs by providing access to a vast network of retailers across Argentina who already use the Red101 Market app.

Speaking on the partnership, Maximiliano Calviño, the CEO of Calfra says, “I expect to gain new customers from this partnership with RedCloud and grow as a distributor by being more responsive to customer needs and offering better products and services. We are in a critical growth stage, and we want to provide retailers with the goods they want to sell on an easy-to-access digital platform, and RedCloud helps us achieve that.”

Florida’s CEO, Facundo Perez, also said “What we are looking for with RedCloud is to expand our market reach and get to places that we are not reaching today, so that more retailers get to know us and buy from us. We believe we that our business has incredible growth potential, and we are confident that RedCloud can help us take the next big step"

The traditional B2B distribution process in Argentina and LATAM provides brands and distributors with little to no visibility across points of sale and no direct relationships with customers that can be leveraged to drive growth. By joining RedCloud’s Open Commerce platform, these distributors will be able to digitize their entire B2B supply chain and gain in-depth visibility across the market to see in real-time where the demand for their products are.

Soumaya Hamzaoui, COO of RedCloud, says “These partnerships are the proof of our commitment to empowering distributors across Latin America with a digital platform that expands their market reach and drives business growth. Our revolutionary Open Commerce platform is the answer to the broken traditional distribution chain has left distributors without visibility across the supply chain, unable to unlock new markets and maximize growth opportunities.”

This expansion aligns with RedCloud’s mission to enable trade everywhere, especially across emerging markets with open commerce technology, so brands, distributors, and retailers can trade openly and without restrictions. Red101 Market is the world’s first Open Commerce platform that connects brands, distributors, and retailers on a single platform and enables open frictionless trading.

With the Red101 Market App, brands and distributors can create a digital store where new and existing retailers across multiple geo-locations can access all their products anytime. In addition, retailers on the platform can also access more products from different brands and distributors, order for stock right on their mobile phones, and pay digitally or on delivery, as they prefer.

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain. 

RedCloud announces partnership with Liquor Boss to drive growth and increase market reach.

Pretoria, May 2022 – Global technology firm, RedCloud, has partnered with Liquor Boss, a large distributor of alcoholic beverages in South Africa, to help drive rapid growth and increase market reach with open commerce technology.

Liquor Boss, a large distributor of alcoholic beverages in South Africa with over 2000 SKUs, has signed a new partnership agreement with RedCloud. This partnership will see Liquor Boss joining the world’s first Open Commerce platform, Red 101 Market, to digitize the entire supply chain and increase market reach.

Liquor Boss is seeking to increase its customer base and drive rapid sales growth but has been limited to the traditional distribution processes, which are inefficient and provide no visibility across the value chain. By joining RedCloud’s revolutionary Open Commerce platform, Liquor Boss can unlock the full value of the traditional supply chain and gain access to a wide network of retailers.

Speaking on the partnership, Luka Medak, the CEO, and MD of Liquor Boss says “I'm looking forward to growing my existing business by partnering with RedCloud. These days it's becoming increasingly more difficult to grow as a distributor and I'm hoping that RedCloud will help me make that journey easier.''

By joining Red101 Market, Liquor Boss will be able to see in real-time where the demand for their products is across multiple geolocations and generate actionable insights that can be leveraged to drive growth and increase revenue. In addition, these insights will make it possible for Liquor Boss to offer better prices to retailers based on geolocations and create targeted campaigns aimed at capturing existing demand for their products.

Justin Floyd, the CEO of RedCloud, said “We are glad to partner with Liquor Boss to provide end-to-end trust and visibility across the supply chain whilst increasing their market reach across South Africa. RedCloud is on a mission to enable anyone to trade anywhere, and with our open commerce platform, distributors like Liquor Boss can grow their businesses at lower costs.”

RedCloud’s Open Commerce platform is the world’s first decentralized digital commerce platform, where brands, distributors, and retailers can directly connect and trade with each other without undue interference from any third party. Unlike traditional e-commerce, Open Commerce empowers the 1 billion retailer economy by unlocking the business potential of 1 billion small retailers globally and meeting the growing demand for consumer goods in emerging markets.

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain. 

RedCloud signs new partnership with Lagostão Pescados to increase sales with Open Commerce.

 

Sao Paulo, May 2022 – Global technology firm, RedCloud has announced a partnership with Lagostão Pescados, a large seafood distributor in Brazil, to increase sales and drive business growth.

 

This partnership will bring Lagostão Pescados, one of the fastest-growing seafood distributors in Brazil onboard the world’s first Open Commerce platform, Red101 Market, built by RedCloud. Lagostão Pescados currently carries over 100 SKUs and will gain access to a wide network of retailers across Sao Paulo and Brazil who already use the Red101 Market App.

 Lagostão Pescados currently supplies seafood to one of the largest restaurant chains in Brazil, with over 80 outlets, but the distribution process is manual and costly. As a result, they had been seeking to digitize their existing B2B supply chain and expand into new markets, and RedCloud’s Open Commerce Platform was the perfect partner to help accomplish this.

Speaking on the partnership, Gabriel Netto, Sales manager for Lagostão Pescados says “All of us at Lagostão are happy with this partnership, as we had been searching for exactly what Red101 Market is offering us - greater visibility across the supply chain with a digital solution. We believe in embracing the latest market innovations, which is why we closed this partnership. From the first contact, we have had extreme confidence that we needed to take this step further, and we trust that this will be the platform we need to drive consistent growth, I have no doubt that it will be a successful partnership.” 

Unlike traditional e-commerce, RedCloud’s revolutionary Open Commerce platform is completely decentralized and provides an open trading environment where distributors like Lagostão Pescados can directly connect to retailers to take their orders, track stock levels in real-time, and gain in-depth visibility at point of sale.

RedCloud CEO, Justin Floyd, had this to say about this new partnership: “We are excited to partner with Lagostão Pescados expand their market reach with the world’s first Open Commerce platform. Open Commerce and decentralization is an accelerated way to fix the broken consumer goods supply chain for brands, distributors, and distributors, by building a single point of digital  engagement for all parties to trade together.”

The Red101 Market App is live in over five markets, and over 200,000 retailers are signed up to the platform, with more joining every day. This makes RedCloud the only solution that allows brands and distributors to digitize the traditionally fragmented B2B supply chain, reduce costs with efficient inventory management, drive growth with real-time POS visibility across multiple geolocations, and better manage their inventory to reduce costs, and drive growth.

About RedCloud

RedCloud is a global technology company committed to enabling commerce everywhere, especially in emerging markets, by digitally connecting FMCG brands, distributors, and merchants that enable them to sell smarter, buy better, and pay simpler. With its proprietary Open Commerce platform, RedCloud is poised to drive economic growth in the FMCG industry by providing new levels of visibility and enabling strategic decision-making based on real-time data analysis syndicated across the distribution chain. 

Delivering value for distributors with data-driven pricing

Over the last few years, traditional FMCG distributors have faced numerous challenges, such as unpredictable demand, massive supply chain disruption, and increased competition from new, digital players in the market, which has led to ever-shrinking margins. In addition, retailers and customers are beginning to expect the same speed and efficiency they are used to receiving in their personal lives. This has put a strain on distributors to become easier to do business with, offer additional services, and provide increased personalization levels, all potentially at the cost of their bottom line.

Wholesale distributors in emerging markets also face an added complexity as more competitors are entering the B2B space with a keen focus on disrupting the low end of the market with low-cost offerings, which further push margins down.

Developing advanced pricing capabilities is crucial for distributors to regain profit margins and increase profitability, as no other lever can do more to raise earnings. Studies show that distributors who embark on end-to-end pricing transformations can expand earnings by up to 50 percent with negligible impact on volume. However, most distributors are yet to realize this and take a “one-size-fits-all” approach rather than tailoring pricing to each customer and situation.

Price transformation is the best way to create value for distributors

Pricing is the most powerful way to improve overall margins and increase profits, as a 1 percent price increase across a product portfolio has more impact on bottom-line margins than a 1 percent reduction in SG&A costs or a 1 percent increase in volume sold. A McKinsey study also shows that a 1 percent increase in price would yield a massive 22 percent increase in EBITDA (earnings before interest, taxation, depreciation, and amortization) margins and increase a distributor's overall company value by up to 20 percent.

However, a 1 percent reduction in price will require a distributor to increase sales by a minimum of 6 percent, or reduce fixed costs by 7.5 percent, just to maintain the same profit outcome. So, seeing that price transformation is one of the best ways to raise margins and deliver value, why aren’t more distributors embarking on price transformation initiatives? We have spoken with countless distributors across emerging markets, and the answer is almost always the same: it’s too complex.

Raising margins and delivering value through dynamic pricing for hundreds of SKUs and thousands of retailers is so complex that most distributors are not capable of attempting it. This is especially true for emerging market distributors who rely on manual processes and lack visibility across the supply chain. To successfully deliver value to the company and its customers via dynamic price transformation, distributors need a data analytics solution that provides end-to-end visibility across the entire supply chain and generates actionable insights that can be leveraged to make the best pricing decisions.

How distributors can leverage data analytics to deliver value through pricing in emerging markets

Delivering maximum value to the company and customers through data-driven pricing will require distributors to rethink their prize optimization strategies and overcome existing misconceptions. For example, many distributors traditionally depend on sales reps to decide pricing based on their personal experiences or gut feelings, leading to lower prices. In addition, experienced salespeople often believe that raising prices means losing deals, especially when competitors offer similar products. This bias often makes sales reps argue for aggressive price cuts to reach their volume targets.

Unfortunately, continually reducing prices is a race to zero margin. In the long run, it makes more sense to build pricing strategies based on real-time demand data and an understanding of the other-non-price factors that retailers value the most. Qualitative and quantitative research shows that quality of service, availability of stock when needed, and the other personalized services are more attractive to retailers than just lower prices, and low prices alone rarely win customers. A McKinsey survey of over 200 customers shows that pricing ranks sixth overall in what retailers look for in a distributor.

Price is still a critical factor in driving sales of key value items (KVIs), which represent the top 20 percent of products a distributor carries, and 80 percent of a retailer’s purchases. However, it is a less critical factor for the other 80 percent of items that distributors carry, which is where distributors have the most opportunity to raise their margins.

Under the traditional pricing strategy, most sales reps focus on the handful of high-turn products they are familiar with and take a shorthand approach to the remaining SKUs, which can mean overpricing some items, and underpricing other items.

The way to create value, and win with pricing, is for distributors to identify pockets of strategic pricing opportunities and focus less on pricing thousands of items the same way. This would require a dynamic pricing system that harnesses digital tools and analytical benchmarks to give sales reps the market intelligence and customer insights they need to drive both volume and margins.

Data-driven pricing can be powered by Open Commerce

Most traditional distributors across emerging markets have little or no digital analytics capabilities and depend almost entirely on manual efforts by sales reps to reach retailers and distribute products. This distribution model provides zero visibility across the chain and, in many cases, forces sales reps to set prices based on personal experiences and gut feelings, which can lead to overpricing or underpricing.

Adopting digital analytics into their operations has long been a challenge for traditional distributors, as most of the digital commerce solutions available, like e-commerce, seek to eliminate traditional distributors. The few data analytics solutions available are often too costly and sophisticated to be a truly viable option for most distributors, as they often require retraining of sales reps and building sophisticated IT infrastructure.

What distributors need is Open Commerce.

Open Commerce is revolutionary technology changing how distributors in emerging markets buy, sell, and pay for FMCG goods. With Open Commerce, distributors gain complete visibility across the supply chain and can see in real-time where the demand is at a granular level.

RedCloud has built the world’s first Open Commerce platform, Red101 Market, where distributors across emerging markets can sell to retailers digitally and access real-time data at every single point of sale syndicated across the entire market. The Open Commerce platform has an in-built powerful marketing intelligence engine that analyzes the generated data to deliver actionable insights that sales teams can leverage to deliver dynamic pricing across the different product portfolios, customer segments, and geolocations.

Retailers can order stock from distributors via the app when they need it, ensuring product availability. In addition, the increased market visibility Open Commerce provides sales reps a deeper understanding of each retailer and allows distributors to offer personalized services, which can be more valuable to retailers than lower prices.

Schedule a demo today to see how RedCloud can help you deliver more value with data-driven pricing and increase your earnings.

Why everyone loves Open Commerce – A live conversation from the market

Across emerging economies, the traditional retail market remains highly fragmented, as over 80% of all FMCG products are sold by small retailers in roadside shops. The industry still relies on manual processes like van sales, physical visits to retailers by brand and distributor sales reps, and costly cash payments. This model is inefficient and has had devastating effects on the supply chain, as three out of every four large FMCG brands have recently had strongly negative impacts on their businesses due to supply chain disruption and plan to downgrade their growth outlooks. Smaller retailers also suffer, as reports show that they are grossly underserved by brands and are often unable to order products when they need them. 

The rise of e-commerce has done little to help retailers and distributors in emerging markets. The current e-commerce model favors a direct-to-consumer approach that sidelines retailers and eliminates distributors from the supply chain. Moreover, with e-commerce, brands cannot capture point-of-sales data or leverage deep industry relationships to gain valuable insight into market consumption patterns. The result is a complicated and fragmented ecosystem that runs partially on bits of paper at the distributor and retailer level, and disjointed digital systems at the brand level.

Open Commerce seeks to unlock the full value of the traditional distribution chain by creating a ‘trade anywhere’ economy where brands, distributors, and retailers can trade freely on a single platform without undue control or restrictions from centralized entities. With open commerce, brands can finally gain end-to-end visibility across their supply chain, gather valuable data on real-time demand trends across the markets, and leverage the data to identify and maximize growth opportunities. Distributors and retailers can also access the products they need, when they need them and make digital payments, even without a bank account.

RedCloud CEO, Justin Floyd and CFO, Stan Mlatac, visited South Africa to talk to FMCG brands, distributors, and retailers in person to discover how they are extracting value from the world’s first open commerce platform. Justin spoke in detail with the officers who are in the field on the widespread acceptance that Open Commerce has received from our customers.

An edited version of the conversation follows:

Justin: You have been doing some fantastic work on the field these last few weeks, but what has the response been like from customers? What are their reactions to the prototype?

Field officer: Oh, they love it. They are fascinated by it. We offer convenience at the click of the button, which is more than they could have imagined before RedCloud. We also offer better pricing and a wide array of products to choose from, which makes every distributor and retailer we’ve spoken to very excited to test the platform.

Justin: So, it’s about price, choice, and convenience. That’s why they are interested?

Field officer: Yeah, absolutely. We’ve done our best to get the best prices in the market, and the retailers and distributors are thrilled. They also really love the idea of being able to sort through their stock from the convenience of their own home, on their beds even. So, it’s a big sell. And as soon as they grasp what the app is about, they’re sold.

Justin: What are the top features of the open commerce platform that retailers and distributors love?

Field officer: Digital payments is one of the top features and a huge gamechanger. Paying in cash has always been problematic for these businesses because it’s not secure, and our customers feel safer when they can transact and pay for their products digitally.

Justin: Have you encountered any challenges or hiccups when talking to people about the idea of open commerce or the app?

Field officer: No, actually, we haven’t, which was very interesting and a little surprising. Usually, when introducing a new way of doing business, there’s significant friction or hesitation to adopt the technology, but we haven’t faced any major pushback.

Justin: That’s interesting. Could you tell me more about that?

Field officer: I think it’s because we preserve the existing distribution chain rather than dismantle it. Many other digital platforms either focus on getting retailers to sell directly to customers, which means they must compete with other bigger e-commerce players and the platform itself or focus on getting brands to sell directly to the consumer, eliminating the retailers and distributors from the supply chain. Open commerce and the Red101 app is the only solution that allows retailers, distributors, and brands to leverage digital commerce while still working with the existing supply chain that has kept the FMCG industry running for decades.

Justin: That’s incredible. We’ve always maintained that traditional e-commerce is terrible for small businesses, and it seems like our customers agree.

Field officer: Yeah, totally. The fear of e-commerce platforms stealing all their customers and putting them out of business is a real threat to these small businesses. They already must compete with malls and bigger supermarkets, so digital commerce has always seemed like another attack on their business, but they have a fighting chance with open commerce.

Justin: So, what are the things that we need to improve to make the experience even better for our customers?

Field officer: There are two main issues that our customers mention often. The first is that you need a mobile data subscription to use the app, and many of them rarely use the internet, so they don’t always have data. So, a solution that allows them to use the app offline would be perfect.

Secondly, we haven’t fully computerized the back end for distributors, so they haven’t been able to explore all the features that we have in real-time, but we have promised them that those functionalities will be added soonest. They are excited by the value that open commerce provides and once the development team makes the updates, we will become their best friends.

Justin: Yes, we are working on a USSD solution so they can use some features of the app even while offline, and I expect that it would be of tremendous help. Another feature that we’ve promised in the future is the ability for brands and distributors to upsell/cross-sell by recommending new products that were bought together as the retailers are checking out. How do our customers like that?

Field officer: Yes, absolutely, that’s a great feature, and the distributors can see the potential. By automatically recommending products that other retailers have bought together, they can get more sales from a single customer, while retailers get to discover new products and expand their product line. So, it’s a solid win-win for everybody.

Justin: Thank you so much for talking with me today. It’s exciting to hear that our customers love what we’ve been building and can’t wait to get more of it.

Field Officer: You’re welcome, Justin. We are proud to be a part of this commerce revolution and talk to people about this fantastic product that can drive a difference in the lives of small businesses and retailers across South Africa.

Schedule a demo today to learn more about how RedCloud is transforming the FMCG industry in emerging markets with the world’s first open commerce platform.

Why we built the world’s largest local payment network.

Emerging market and developing economies (EMDEs) make up 84% of the world’s population, but only contribute 37% of the Global GDP. In these markets, as many as 2 billion people and 200 million small businesses are entirely cut off from the formal financial system, lacking access to savings, investment, and credit facilities. The gap between the credit needed by MSMEs in developing economies and credit available is estimated at over $5 trillion. Closing this gap is crucial, as it will drive growth for MSMEs who provide over 80% of all full-time and help eliminate social and economic challenges among some of the poorest people in the world.

The solution to this problem is already in the hands of many – a mobile phone. Across emerging markets, mobile phone penetration is estimated to reach 80% by 2025, and more people will have mobile phones than bank accounts.  Through digital finance, payments and other financial services delivered via mobile phones and the internet, we can help increase the rate of financial inclusion and sustainably provide over $2.1 trillion in credit to over 1.6 billion unbanked individuals and 200 million excluded businesses.

Digital finance can solve the financial inclusion problem

Digital finance and payments hold significant promise for everyone and can increase the GDPs of all emerging economies by 6% or $3.7 trillion by 2025 and create up to 95 million new jobs across all sectors of the economy. This is equivalent to adding a new economy to the world larger than all the economies of Africa.

Governments also stand to gain over $110 billion every year by reducing leakage through the shadow economy. Digital Financial Services Providers (DFS) can better assess credit risk for a wider pool of borrowers and make up to $4.2 trillion by expanding their customer base.

Over the last few years, there has been a rapid expansion of new technologies and innovations in the digital payments industry. With card and mobile-based payment solutions, more consumers and businesses in emerging markets can now access and use digital finance.

However, getting the financially excluded retailers to use digital payment solutions often means competing directly with cash, which is almost impossible. Therefore, to solve the financial inclusion problem and unlock growth for millions of unbanked MSMEs, DFS providers must first understand why cash remains king and build solutions that complement rather than outrightly replace cash.

Why cash remains king in emerging markets

Cash remains the preferred payment method for small retailers in emerging markets. Available data shows that more than half ($19 trillion) of the $34 trillion global B2B retail payments made by Micro, Small & Medium Retailers (MSMRs) are done in cash. This is because cash is convenient, instant and universally accepted. Furthermore, no digital payment method offers similar versatility and universal acceptance, leading to lower adoption rates.

Different manufacturers and larger distributors across the retail industry often build their digital payment solutions or partner with other third-party DFS providers to eliminate the huge cash handling costs. However, the payment solutions often have low adoption rates of less than 10% because there is no real incentive for the retailer, who usually gets paid in cash by consumers. Retailers are then faced with the challenge of digitizing cash and learning how to use multiple payment platforms for the different brands or distributors they buy from.

Switching to digital payments will also require retailers to rethink their relationship with money, as many DFS providers charge fees on each transaction. This appears as a charge for spending their own money to the average retailer and is a thoroughly unattractive proposition.

There is not enough incentive for retailers to switch to digital payments in many cases, so they stick with cash. However, if we can build a new ecosystem that provides solid incentives for retailers, FMCG brands, and distributors to switch to digital finance, we can drive widespread adoption of digital payments, increase financial inclusion, and drive MSME growth. This is what RedCloud has built – a new system of commerce that unlocks the full value of the traditional supply chain in emerging markets and empowers everyone, from the smallest retailer to the largest FMCG brand to sell more and grow their businesses.

Solving the digital payments problem with open commerce

At RedCloud, we have taken the first step to drive rapid adoption of digital payments among small retailers by providing several compelling incentives. We built the world’s first open commerce platform that allows small retailers to directly access FMCG brands and order their stock in real-time. Merchants no longer have to wait for physical visits from sales reps and can pay digitally on the same platform.  

Next, we built the world’s largest local payment network with over 2 million cash-in/cash-out (CICO) points across 100 countries. Retailers can walk up to any CICO agent and digitize their cash in minutes for free without needing a bank account. We realize that a strong cash-in/cash-out network plays a critical role in the transition from cash-based to fully digital payment systems, and retailers in emerging markets will only switch to digital payments if they can convert their cash into e-money and back again, as needed.

Finally, we created compelling use cases that incentivize retailers to digitize their cash and make digital payments. With our merchant app, retailers can sell digital products to their customers and make a commission on every sale, providing a new income stream. In addition, the digital trading profile generated as retailers continue to use the platform can be used to access credit risk and provide access to credit facilities even without a formal bank account.

With open commerce, financially excluded retailers in emerging markets can finally access the credit and financial services they need to grow their business.

Schedule a demo with us today to see how RedCloud is accelerating economic growth across the globe, and empowering over 270,000 retailers in emerging markets to trade digitally and grow their businesses by up to 40%.

Including the excluded: Solving the digital payments problem in emerging markets

Today, across emerging markets, over 2 billion individuals and 200 million small businesses are excluded from accessing critical financial services, leading to high levels of inequality, and increased social and economic challenges. Micro, Small, and Medium Enterprises (MSMEs), which constitute over 90% of all businesses, and provide over 50% of the employment in emerging economies, cannot access the financial services they need to grow their businesses. The World Bank estimates that about half of all formal MSMEs lack access to formal credit, with an unmet financing need of $5.2trillion every year, and the gap is even larger when informal enterprises are considered.

This article discusses the importance of financial inclusion and how digital payments can help accelerate the rate of inclusion in emerging economies. The article also shows how RedCloud is driving the adoption of digital payments inthe world’s biggest product category by providing FMCG brands, distributors,and retailers with a revolutionary digital commerce platform.

Driving financial inclusion with digital payments

Research from the World Bank shows that increasing financial inclusion can drive economic development and increase the GDP in emerging markets by up to 14%. The United Nations has identified financial inclusion asa critical factor in achieving no less than 7 of the 17 Sustainable Development Goals, as financial exclusion remains a key enabler to the extreme poverty rates and lack of economic development.

The overwhelming dominance of cash payments contributes significantly to financial exclusion, as low-income earners and informal MSMEs, who often constitute a large portion of the population, do not see any need to enter the formal financial system. Available data shows that over 90% of all consumer goods sold in emerging markets are paid for in cash, and annual cash payments are more than $19 trillion, or more than half of all global retail payments.

Digital payments can potentially reach over 1.6 billion new retail customers in emerging markets and reduce the existing $5 trillion credit gap by increasing the volume of credit accessible to businesses and individuals by $2.1 trillion. This will enable more small businesses to access the financial services they need to grow their businesses. The advantage of digital finance is not limited to individuals and MSMEs alone. Companies that build digital finance capabilities and provide digital payment solutions canaccess new revenue streams and increase revenues by $4.2 trillion.

Digital finance can also reduce the costs of doing business for both larger brands and smaller retailers, as cash payments cost consumer goods brands up to 20% of annual revenue, while small retailers lose up to 15% of their total revenue to cash handling and shrinkage. Evidently,there is a massive opportunity for digital financial service (DFS) providers,FMCG brands, and small MSMEs to increase revenues, reduce costs, and grow their businesses.

Digital payments are not catching on fast enough

While digital payments represent a huge opportunity in emerging markets and can help increase financial inclusion, it has yet to achieve widespread adoption. Millions of small businesses still pay for their goods in cash, and FMCG brands still require sales reps to collect those payments and transport them to reconciliation centers.  

Digital payments have not caught on in emerging markets for several reasons, some of which are:

  1. Consumers still prefer cash payments: High levels of financial exclusion mean that many consumers can only pay for their goods in cash. Therefore, small retailers see no incentive in switching to digital payment solutions, as the burden of digitizing cash would fall on them.
  2. High transaction fees: While cash payments can costretailers up to 15% of revenue, these costs are often hidden. Digital payment platforms, on the other hand, charge transaction fees, which can seem expensive to the average retailer, as it appears that they are charged to use their own money.
  3. No single universal payment solution: There is often no universally accepted digital payment solution in the market, as multiple brands attempt to drive cash digitalization with different payment solutions. This makes it even harder for retailers to adopt any single solution when buying stock from multiple brands.
  4. Low digital and financial literacy levels: Financial exclusion levels are higher among informal retailers and merchants, and switching to digital payments often requires a lot of training and education.

To fully adopt digital payments and increase financial inclusion levels, we need a new industry standard in commerce payments that provides significant incentives for both brands,retailers, and consumers.

Digitalize cash in emerging markets with open commerce

Open commerce is a new type of commerce platform that revolutionizes trade across emerging markets. Unlike other traditional centralized digital commerce platforms, open commerce is built on decentralization and open trade principles to create a sell anywhere economy where small retailers can directly access the brands and products they need to grow their business.

RedCloud has built the world’s first open commerce platform powered by the world’s largest local payment network with over 2 million pay-in points across 100 countries. This allows retailers and merchants in the most remote locations to digitalize their cash and make digital payments, even without a bank account.Retailers can digitize their cash in any accepted pay-in point with no transaction fees deducted and then use the digital cash to access a wide range of products and services from global brands.

We have incentivized digital payments for retailers and small businesses in emerging markets by providing access to global brands and distributors, so they can order the products they need, when they need them, at prices they can afford.Retailers can also accept digital payments from customers, manage their stores digitally, and grow their businesses with our integrated marketing intelligence tool. They can also sell digital products to consumers in their stores and earn a commission on each sale.

By providing small business owners, many of whom are financially excluded from the formal financial system, with a reason to adopt digital payments and start trading on the open commerce platform, we are opening a new world of financial products and services. This includes a Buy Now Pay Later scheme that allows retailers to access the credit facilities they need to grow their business.

Schedule a demo with us to see how RedCloud has empowered over 270,000 retailers in emerging markets to start trading digitally and grow their businesses.

Data-driven decision making is key to driving sales growth

Across the FMCG industry, sales growth is directly tied to overall company growth, as 50% of all the value created by an FMCG company rests on the sales force. Driving next-generation sales growth will require CPG companies to develop advanced insight, agility, and technology capabilities. An industry survey shows that brands willing to shakeup their traditional sales models and embrace these next-gen capabilities are growing their revenue at twice the rate of GDP. The survey also shows that that top-performing sales organizations have developed and perfected the ability to make data-driven decisions at scale.

An analysis of these top-performing organizations show that their sales teams base at least 60% of their decisions on relevant market data, while laggard companies base a startling 70% of their decisions on gut feeling. Unfortunately, the vast majority of FMCG sales teams in emerging markets, up to 58%, still rely on gut instincts and personal relationships with retailers to drive sales.

Source: BI-Survey

This over-reliance on instinct and personal relationships rather than data-driven decision-making, can lead to inconsistent sales performance across the organization. Available research shows that focusing on data-driven decision-making provides a 2–5% sales boost and integrating analytics into the sales process can deliver a 10–20% boost in productivity.

Therefore,FMCG brands must leverage data-driven decision-making at scale to gain a strategic advantage over their competition, increase market share and drive growth. This is especially important for sales reps, as they, in many cases, represent the only contact retailers and sellers have with the brand.

Why data-driven decision-making is key for your FMCG brand

Over the last few years, the consumer-goods industry has experienced significant change.The pandemic has revealed the inefficiencies in the traditional FMCG sales model and amplified many trends that have been disrupting the industry for close to a decade. As demand and consumption patterns change rapidly, gut feeling and instinct are no longer enough to predict where the demand for products is or guarantee sales growth.

An analysis of the fastest-growing CPG companies shows that they invest in centralized data analytics 19% more than the slow-growing companies. By clustering workflow integration, data science, business intelligence, and other cross-functional skill sets, sales teams can identify new growth opportunities faster, iterate, and exploit them at scale. Sales leaders that build data analytics capabilities also report greater confidence in their ability to harness the incredible potential of available data and analytics to drive consistent sales growth, and are 1.4x more likely to outperform the competition.

Driving data-driven decision making at scale for FMCG sales teams

Having established the importance of data-driven decision-making among FMCG sales teams, the next question is, where do you begin? Several data-analytics solutions on the market promise to provide the insights you need  but choosing the best solution for your brand can be tricky. Furthermore, you must select a solution that is easy to use and will be widely adopted across the entire salesforce. Many digital transformations eventually fail due to a lack of adoption by sales reps who find the solution too complicated or cumbersome to use.

To choose the best solution that will enable data-driven decision-making at scale, FMCG sales leaders must first look inwards to determine what data type is the most relevant to driving sales growth. As an FMCG brand in an emerging market, your sales teams need to know:

  1. Where the demand for your product is: Under the traditional distribution chain, sales representatives must physically visit merchants to know if they are out of stock and if the products are in demand.Thus, sales leaders lack real-time data on where the demand for each product is and must depend on legacy data, which makes data-driven decision-making in real-time almost impossible.
  2. Who is buying your product: The traditional retail market is largely informal, with 80% of all FMCG trades occurring at small shops, kiosks,and stores. Reaching these small merchants often depends on personal sales relationships with sales representatives. Unfortunately, sales force turnover is the highest in the FMCG industry at 35%, and the departure of a sales rep can mean the loss of multiple retailers or merchants. The manual reporting system often employed in FMCG sales teams also means that leaders are in the dark as to who is buying their products and lack the data to create targeted growth campaigns and promotions.
  3. How often your products are bought: In many cases, sales velocity and frequency is determined by how often a sales representative can visit a merchant. However, available data shows that many retail outlets are severely underserved with limited direct coverage from sales reps. Without real-time visibility into sales volume and velocity, the sales team cannot identify and maximize any growth opportunities that exist in the market.

Your FMCG brand needs a solution that provides the sales team with real-time, in-depth visibility across the distribution chain to increase data-driven decisions and drive sales growth. The solution must also integrate seamlessly with your existing technology stack and be easily adopted by sales reps, many of whom may not be technically sophisticated.

The only platform that combines all these features is open commerce.

Make better,data-driven decisions with open commerce

Open commerce is a new type of digital commerce that will revolutionize how FMCG brands, distributors and retailers buy, sell, and pay for products. The traditional e-commerce model is broken, as it is heavily centralized and controlled by a small number of players who restrict brands and merchants from trading directly with each other.

Under traditional e-commerce, brands are often blocked from seeing who is buying their products and cannot create targeted campaigns to drive sales. With open commerce, FMCG brands, retailers, and merchants can trade directly on an open platform without any artificial restrictions enforced by the platform.

RedCloud has built the world’s open commerce platform, Red101 Market. With this revolutionary platform, brands in emerging markets gain full visibility across their distribution chain and can see where the demand for their products is,who is buying their products, and the micro-consumption patterns in the market.

The Red101 Market app allows merchants and retailers to directly order stock from the manufacturer without needing a visit from sales reps, leading to a massive boost in productivity as reps can now spend more time on revenue-generating activities. Our open commerce platform also provides real-time sales data atPOS, analyzes the data, and makes it accessible to the entire sales team on easily customizable dashboards. This enables sales reps to make more data-driven decisions and identify growth opportunities in real-time. With real-time, actionable data at their fingertips, sales leaders can also create target promotions and campaigns that drive sales growth.

Schedule a demo today to see how RedCloud can help your FMCG brand make more data-driven decisions and increase sales by up to 25%.

Empower your sales reps with data analytics

Across the FMCG industry, sales representatives are some of the most important value drivers for brands and distributors, as sales reps sell $34 trillion worth of FMCG goods to over 1 billion micro-sellers every year. Research shows that sales-team effectiveness is crucial for growth, as over half of the company’s value creation is tied to the sales force. Despite the importance of sales representatives to company growth, many FMCG brands, especially those in emerging markets, cannot increase the effectiveness of their sales force.

Many sales reps, especially in emerging markets, are restricted to manual, inefficient methods of driving sales, where more time is spent on the road or generating reports than on revenue-generating activities like speaking to customers or creating growth campaigns. This can lead to high sales costs of between 30 to 40 percent.

Adopting a transformational, company-wide data-analytics strategy can help improve sales-force effectiveness, as data shows that companies with mature digital capabilities in sales operations are two times more successful than their non-digital counterparts. Adopting a digital analytics and automation solution has also been shown to improve sales efficiency by 15%.

However, the fragmented nature of the retail industry in emerging markets makes it difficult to identify and select the right data analytics solution that increases sales efficiency. FMCG brands must take the lack of visibility across the traditional distribution chain and the low technical sophistication of both the sales reps and their customers when choosing a digital analytics solution for their sales teams.                                                                                                                                                                                                                                                    

Why your sales reps need data analytics

Driving revenue growth and increasing sales will require that FMCG sales reps have access to up-to-date, reliable information on their products and customers and the ability to make data-driven decisions within the shortest possible time. The lack of these capabilities under the traditional FMCG distribution process reduces the overall effectiveness of FMCG sales teams, with reports showing a considerable performance spread among sales reps.

Research shows that the top 30% of reps out perform the bottom 30% by as much as a factor of four, and many sales leaders do not know what top sales reps do differently or how to replicate that success across the team to drive additional revenue growth.

A data analytics solution that can incorporate multiple data inputs such as consumer behaviors, sales data at POS, and seasonal demand changes to provide actionable insights in real-time is invaluable to improving the efficiency of sales teams. With actionable data at their fingertips, sales reps can correctly prioritize what customers to visit, determine how much time to spend with each retailer, and offer the best personalized promotion-pricing mix that generates maximum growth.

An analysis of the top-performing FMCG sales reps shows that they spend 22 percent more time connecting with and directly engaging customers. This personalized, real-time knowledge of the market and individual customer needs enables them to create specific promotions that take advantage of micro-consumption patterns in the market. With a well-integrated data analytics solution, this capability can be extended across the entire sales force at scale, increasing the efficiency of the whole sales team.

Cash management is another significant obstacle to driving growth for FMCG brands across emerging markets, as 90% of all retail transactions are made in cash, and cash management can cost up to 9% of annual revenue. Sales reps often have to physically transport the money back to the company office for reconciliation, leaving them vulnerable to attacks and robberies. A Better than Cash alliance report showed that Coca-Cola delivery drivers in Nigeria get robbed as often as once a month, as they are responsible for carrying cash.

Open commerce is the best data analytics solution for FMCGs

Many FMCG brands have identified the need to adopt a data analytics solution but are stuck with traditional systems, such as SFA tools, that require sales reps to manually input their reports and can only analyze historical data. This reliance on legacy data often leaves teams working with outdated insights and results in many missed opportunities. This is why you need open commerce.

Open commerce is a new type of digital commerce solution that unlocks the full value of the traditionally fragmented distribution chain. Unlike traditional e-commerce, open commerce is decentralized and built on the core Web3 principles of open and equal access. With open commerce, FMCG sales reps can pull real-time demand from every retailer and seller across their target market.

 

Inefficient manual sales visits and inaccurate manual reporting are eliminated as sales reps know in real-time where the demand for their products is, and reports are generated automatically. Open commerce also solves the cash problem by enabling digital payments at scale. Distributors, retailers, and other ecosystem partners can pay on the same network, eliminating the risks and costs of carrying and reconciling cash.

Open commerce is also built to drive easy adoption. Many traditional data analytics solutions are designed for sophisticated, tech-savvy users, but sales representatives may not possess that expertise. As a result, adoption rates remain low, and any investments made into data analytics may eventually be wasted.

Empower your sales reps with the world’s first open commerce platform

RedCloud has built the world’s first open commerce platform that empowers sales reps to sell smarter and increase revenue. With RedCloud, merchants and sellers can pull demand by placing orders for the platform, which eliminates the extra time that sales reps spend visiting retailers and taking orders.

Now, sales teams have real-time visibility across the entire distribution chain, can see who is ordering their products, and properly segment their addressable market according to seller size, order frequency and order volume, among other key metrics. This increased visibility makes it easier to create better promotions and offer more competitive pricing to each seller. With RedCloud, your sales representatives are transformed from simply taking orders to intelligent territory managers who can make data-driven decisions to drive growth at scale.

We have also built the world’s largest payment network, with over 2 million pay-in points across 100 countries, so that merchants can make digital payments seamlessly, even without a bank account.

Schedule a demo today and see how RedCloud’s open commerce platform can increase your sales force efficiency by up to 15% and grow sales by up to 25%.

Cost Transformation: A new frontier for brands and manufacturers

Managing and reducing costs are vital aspects of any business, especially for FMCG brands and manufacturers. By reducing costs, brands increase their profits, and can set competitive prices which are attractive to customers. It also means better numbers for the company, which is attractive to investors. Therefore, cost reduction and management efforts are crucial to every business’s strategy.  

However, reducing costs is not as simple as it sounds. Traditionally, cost management strategies have focused on cost cutting or cost reduction. Unfortunately, these methods often backfire and result in reduced service, poor quality goods, loss of market share and eventually reduced profits. Therefore, to remain competitive with their pricing without compromising quality and value, brands need to be smarter and more strategic with how they manage costs.  

This article examines the traditional methods of cost management and shows why businesses must employ strategic cost transformation in these times.

Why traditional cost management solutions are ineffective

While brands have experienced revenue growth in previous years, their costs have grown significantly as well, which has made cost reduction a priority for many FMCG brands, but just how effective are these programs?

In 2019, Oliver Wyman conducted a survey of the leaders of CPG companies who had recently implemented significant cost cutting programs, and 76% of them said the program failed to deliver the value expected, and only 6% had better results than anticipated. Moreover, the programs that didn’t meet expectations missed the mark by significant margins. On average, these companies missed the target by 36% when compared to the savings the programs were expected to make.

This analysis shows that there is obviously a disparity between cost reduction intentions and reality. This is because the traditional approaches to managing and reducing costs are becoming increasingly inadequate. The tools that brand leaders and executives used to address cost in the previous decades will no longer produce expected results and, in the future, delivering effective cost management solutions will require new thinking and fresh approaches. Fortunately, the emergence of newer and more effective cost management models is paving the way for dramatic improvements in how companies view and approach cost management.

Cost Transformation: A strategic approach to cost management

If brands will generate the results they want from their cost management initiatives; they need to take a strategic and holistic approach to programs. According to PwC, the crucial priority is not what costs are taken out, but where resources are focused to stimulate growth and differentiation, this is strategic cost transformation. By recognizing the need to view cost in a fundamentally different and holistic way and drive dramatic improvements, the rewards can be enormous.

When setting cost transformation goals, business leaders tend to be conservative, which is a recipe for disappointment. By setting ambitious yet realistic goals, the entire team is focused on identifying creative step-changes on how each process is run rather than incremental savings actions. And can optimize processes for increased efficiency and attain cost reduction targets.  

To create and drive successful cost transformation programs, the customer must be the focus. Even though this might sound counter-intuitive at first, assessing cost reduction options via a ‘customer lens assessment’ will provide important input for prioritizing and redesigning how the company carries out its processes, both internally and externally.

Finally, to design successful cost transformation programs, brands must embrace digital solutions. Innovative solutions when rapidly adopted and implemented improve efficiency, streamline processes, and provide better visibility across the entire business operations, so that executives can make better decisions. Adopting better technology also reduces risk, and inefficiencies, which directly saves costs, and moves the brand closer to achieving their cost management goals.

Transform costs effectively with RedCloud's open commerce platform

One of the sectors that can help brands reduce costs is in their distribution chain. By digitizing the distribution chain, brands can cut costs by 10 – 20%, which is why you need RedCloud.

At RedCloud, we’ve built the FMCG industry’s first open commerce platform. With this digital ecosystem, brands now have real-time visibility over their distribution chain and better control over their inventory. Adopting an open commerce platform allows the brand to unlock the full value of their distribution chain and transform each existing industry relationship into a potential data point. Utilizing this data, brands can then reduce inefficiencies, streamline their operations and save costs.  

To find out more about RedCloud and our innovative industry solutions here that help brands, distributors and merchants sell smarter and improve visibility along the distribution chain, please get in touch via this contact form.

Driving growth in FMCGs by digitizing Revenue Growth Management (RGM)

Today, more than ever, CPG companies are struggling to achieve profitable growth, with the industry’s economic profit growth dropping to 3.2% between 2010 and 2019, a sharp decline from the 10.2% growth recorded in the previous decade. One of the reasons for this is that the traditional methods of driving growth are not as effective as they were in the past.

CPG companies typically used to invest anything between 11% and 27% of their gross revenue on trade promotions in a bid to drive growth. Unfortunately, 72% of trade promotions end in losses, and retailers are demanding more trade promotion support from CPGs than ever, increasing the CPG’s cost of serving retailers without any real return from the gross revenue growth.  

In today’s market, leading CPGs are adopting Revenue Growth Management (RGM) as a discipline to improve growth. This article looks at RGM, and how digitization of RGM can help CPGs further drive growth in the current industry landscape.

What is Revenue Growth Management?

Revenue Growth Management (RGM) is the process of analyzing data to understand how customers perceive a product’s value, predict the customer’s purchase journey, optimize the product and take advantage of shopping occasions for profitable revenue growth. Revenue Growth Management has four fundamental elements: pricing, product assortment, promotions and trade investment. By implementing revenue growth management strategies, CPGs are learning to capture significant value.  

One of RGM’s core principles is the align the price of a product to the customer’s perception of value. While there is no direct link between customer value perception and pricing in traditional trade promotion, value perception is foundational to all analytics in RGM. Understanding the RGM paradigm provides brands with an outside-in and deeper micro-segmented understanding of the consumer and the factors that influence their buying decisions.

Strategic RGM: The key to long term revenue growth

To get the maximum impact out of RGM, it must shape the company’s commercial strategy, rather than just enabling it. This is called strategic RGM and is built on deep insights that provides CPGs with more granular choices about where to compete and how to win. These insights can only be gotten detailed analyses of data from both primary and secondary sources from the company itself and its industry partners, which gives a clear picture of the available opportunities.

In the context of customers, strategic RGM requires an in-depth understanding of ‘purchase structures’ - such as how customers make buying decisions. Which products are substitutes for each other, and what happens when a customer can’t find a particular product? Do they choose an alternative or leave without buying anything? With these and other types of insights, brands can design and execute several short- and long-term initiatives to drive market growth.

Strategic RGM provides the right foundational elements to unlock and deliver commercial growth for CPGs, but are FMCGs equipped with the processes, capabilities, tools, and skills to drive a successful RGM agenda? Only a third of business leaders think so, and without proper equipping such as access to all important data, brands will lack the ability to drive revenue growth and their RGM strategies will not deliver expected results.

Digitalizing RGM to drive CPG Growth

In today’s market, it is vital that brands build the competencies, skills and processes needed to run successful RGM initiatives. Retailers are increasingly getting better at all the elements of (RGM), as many have embraced new technologies, including data gathering and analytics systems. By doing so, have overtaken brands in their knowledge of what, why, and how consumers buy.  

Therefore, brands must increase their digital capabilities across the fundamental elements of RGM. Unfortunately, the RGM digitization approach is uneven across companies and levers, as many CPGs have disconnected systems and insights, and lack the capacity to respond quickly to market shifts and deliver the right assortment promotions, pricing, and trade terms to accurately understand and predict market shifts, driving customer growth.

Unlock the value of RGM initiatives with RedCloud’s open commerce platform

At core of any successful RGM strategy is the need for deep insights across the entire distribution chain, and the ability to predict and understand shifting market conditions. This is what RedCloud delivers via our innovative open commerce platform, we allow brands, distributors, and merchants to sell smarter, buy better, pay simpler.

With this platform, brands gain real-time visibility into their distribution chain and understand exactly what is going on at every point in the chain, from the distributors to the POS. This way, brands maintain control over their order and inventory management as each existing connection across their industry is transformed into an existing data point. With RedCloud, marketers also gain insights into buyer behavior, and can devise successful buyer-specific campaigns and promotions, one of the fundamental elements of revenue growth management.

For more information on how RedCloud can help your FMCG brand, please contact us by filling this form.

Achieving long-term growth in a post-pandemic world

The pandemic had a significant impact on the CPG industry, causing rapid shifts in consumption patterns. While many companies had to deal with reduced demand for their products, other companies had to ramp up production to meet an unprecedented spike in demand. These changes occurred at the same time consumer packaged goods (CPGs) companies were looking to come out of a decade of slow and inconsistent growth as the CPG industry economic profit growth was only 3.2% between 2010 to 2019.

To achieve and maintain long-term growth, CPG companies must make strategic plans to adjust to the rapidly shifting market to take advantage of the potential opportunities that appear in the market. Brands must adopt a comprehensive and analytics-driven approach to increase their revenue, and the first step to this is to understand the contours of the next phase of post-pandemic reality. This article looks at how FMCGs can drive and consolidate growth in the long term as the world struggles to find its new normal.  

The effects of the pandemic on the CPG industry

The landscape of the consumer goods landscape company has been reshaped by the pandemic, which has had diverse effects on revenue and growth of different CPG companies. Some product categories, such as non-perishable groceries, and household & cleaning supplies experienced significant growth of 25% and above as more people stayed at home due to lockdown measures, while other consumer categories like alcoholic beverages experienced significant drop in demand as bars and restaurants remained closed. The pandemic also had a significant impact on channels, as e-commerce and omnichannel sales have increased significantly, while in-store sales have experienced a drop in sales as foot traffic into physical stores also dropped significantly.  

The most significant change that the pandemic brought, however, is the change to consumer behavior and consumption patterns. As consumers had their daily routines affected, their consumption patterns also changed, which affects their demand for products and services. As retailers and merchants also begin to attempt to implement digital solutions like ecommerce platforms and delivery services, they can begin to understand their customers better and provide them with more personalized services.

How brands can drive long-term growth with digital solutions  

Experts continue to predict that the consumption patterns will continue to shift in the days ahead as more channels open and customers discover new products and services. To drive growth and consolidate on it for the long-term, brands must have real-time visibility over their distribution network to understand the shifting market conditions, identify bottlenecks and take advantage of potential opportunities.  

Currently, FMCG brands, especially those in emerging markets operate with a linear distribution model that is inefficient. They do not have real-time order and inventory management, neither do they retain control over their goods as it passes along the distribution chain. This lack of visibility also means that they cannot accurately predict real-time changes of consumption patterns and buying habits and cannot react in time to capitalize of any opportunities that appear, which is a crucial competence that brands need to have in a post-pandemic world. This lack of real-time, reliable data also means that marketing teams do not have enough insight into their customers to carry out effective marketing campaigns.

Therefore, the traditional model that businesses employ leaves them handicapped when driving long-term MoM growth as they keep losing revenue, and market share. The solution to this problem is to adopt a digital solution that allows brands to predict, see and analyze market occurrences in real time. Which is what RedConnect does for brands, distributors, and marketers.

Driving growth with insights from RedCloud's open commerce platform

RedCloud has built the CPG industry’s first open commerce platform that allows brands, distributors, and merchants to sell smarter, buy better, and pay simpler. Different from other digital marketplaces or ecommerce solutions, our revolutionary open commerce platform unlocks the full value of the distribution chain by transforming every industry connection and partnership into a potential data point that provides real-time visibility over order and inventory management. Brands now have insights into what happens to their products from their stores up to the retailer’s shelves.  

With these powerful insights, brands can easily identify inefficiencies and eliminate bottlenecks so that their processes are faster and smoother, and with additional knowledge of consumer behavior, marketing teams can create buyer-specific marketing strategies and devise new trade marketing campaigns that can increase sales by up to 20%. With RedCloud, brands now have the power and the insights to consolidate on the growth they have experienced in the past to drive long-term growth.  

RedCloud is one of the TOP FIVE TECHS that have been awarded the Scale-Up Bridge Program in Mexico

In the midst of a health contingency period, the United Kingdom Department of International Trade (UK DIT) , Grupo Financiero Banorte and the Monterrey Digital Hub , joined forces in the joint ScaleUp Bridge program , with the aim of supporting five British fintechs to connect them with Mexico's digital entrepreneurship ecosystem. Banorte, one of the largest banks in the Mexican financial system, promotes this program by providing specialized advice and mentoring to fintechs to reactivate the economy through innovation and attracting talent.

Scaleup Bridge is a joint program of the British government, Banorte and Monterrey Digital Hub, through which the English FinTechs with the highest growth projection were identified and selected to promote their growth under the areas that the institution identified as essential for this program: payments and remittances, scoring , identity and fraud, corporate financial management and crowdfunding , and serving the needs of the Monterrey Digital Hub business community.

The companies selected for this business linkage program between the United Kingdom and Mexico are:

  • Pollinate (Payments and remittances) : Platform for the accelerated induction of MSMEs to digital banking, enabling virtual payments and income and expenses analytics.
  • DIGISEQ (Payments and remittances): They enable contactless payment methods and identity management through private devices through account tokenization.
  • Wiserfunding ( Scoring , Identity and Fraud): Specialized in the accurate assessment of the credit risk of small and medium-sized companies through technology and Artificial Intelligence.
  • Trade Ledger ( Scoring , Identity and Fraud): Digital company that optimizes loan operations for clients and individuals thanks to its recommendation engine and profile grouping
  • RedCloud Technologies (Enterprise Financial Management): Platform to enable frictionless payments for small and medium businesses without digitized banking offering an approach to global distribution chains and market intelligence solving the enormous cost of managing cash.

The binational program was presented at an event with the assistance of Juliana Correa (Director of the International Trade Department of the British Embassy in Mexico), Guillermo Güémez (Deputy General Director of Innovation of Grupo Financiero Banorte) and Eduardo de la Garza Sánchez (Manager General of the Monterrey Digital Hub).

To read this press release in full please click on this link!

Leveraging digital solutions to solve challenges in the food and beverage industry

The food and beverage industry is one of most critical industries globally, supplying food and drinks to millions of consumers worldwide. The industry is huge with many sub-industries and product categories which include alcoholic & non-alcoholic beverages, grain products, dairy food, meat, poultry, seasoning, oils, and so many more. This already huge industry is expected to keep growing, having grown from $5.94 trillion in 2019 to $6.11 trillion in 2020 at a compound annual growth rate (CAGR) of 2.9%. Furthermore, the CAGR is expected to rise to 7% from 2021 as economies continue to recover from the COVID-19 pandemic.  

To drive this growth though, players in the food and beverage industry must be willing to adopt new and innovative strategies to improve the efficiency of their operations and offer more competitive products. This article examines the current trends and obstacles in the industry, and how digital solutions can offer solutions to the challenges common to the food and beverage market.  

Current trends and challenges in the food and beverage industry

In recent years, there has been an increase in the availability of clean-label, organic, and non-GMO products due to increased demand as more consumers are educated about their potential benefits. The consumption of alcohol beverages, including beers, spirits and wines has also increased significantly.

On the economic side, there is strong economic growth from emerging markets as 70% of all FMCG sales and profit is expected to come from emerging and developing markets. As of 2020, 60% of the top 600 cities were in developing markets, which represents 735 million households and 1.3 billion consumers that will belong to the new middle class that can afford to consume more products from manufacturers in the food and beverage industry. We have also seen the rise of organized retail brands providing more value-based services to consumers, as well as the increased influence of digital marketing and social media on consumers’ buying habits.

On the other hand, negative trends in the food and beverage market include changing regulatory requirements, especially in emerging markets, which introduced a level of instability to the market, a lack of sufficiently skilled workforce to take advantage of new innovation and technologies available. The complexity of acceptance and purchase intentions of consumers is also a potential problem that players in the food and beverage industry face, in addition to dealing with the coronavirus pandemic and how it affects consumption patterns.

Adopting digital solutions to solve the challenges in the food & beverages sector

One of the biggest challenges that face the food and beverages industry, especially in emerging markets is the inability of manufacturers to detect changes in consumption patterns across customer segments and product categories due to their inability to receive and process real-time market data from industry partners, distributors and merchants.  

The distribution network is the livewire of the entire industry, connecting manufacturers to distributors, distributors to wholesalers, retailers and eventually the end consumer. However, the traditional distribution network in emerging markets is slow, inefficient and still underdeveloped. For example, in many developing markets, almost all transactions are cash based, with merchants paying cash to distributors, and distributors doing the same to manufacturers. This means there’s a risk of mismanagement, fraud and theft, leading to avoidable losses. To solve this problem, players across the food and beverage industry must adopt digital solutions. By digitalizing the distribution network and their operations, efficiency is increased, and losses are avoided.  

Manufacturers, distributors and merchants in the CPG industry in general and the food & beverage industry need a solution that allows them to buy better, sell smarter and pay simpler. This solution should provide players in the industry with the data and intelligence needed to make strategic decisions. This is where RedConnect from RedCloud comes in.

RedCloud is a digital ecosystem that solves most of the problems already identified, allowing businesses in the food and beverage sector to sell smarter, buy better and sell simpler. With this digital solution, the value of the entire distribution network is unlocked. Now, brands have access to real time consumption data, so they know what product is being sold, how fast it’s sold and who is buying them. This is done by transforming every industry connection into a potential source of data, providing valuable insights that they need to make strategic decisions. With access to the data that RedCloud provides, marketing teams can design user-specific campaigns, and identify new avenues for upselling and cross-selling their products.  

RedConnect also provides real time visibility of order and inventory management. Rather than having to create and comb through tons of spreadsheet data, our digital platform provides all the information needed in a simple, clear and easy-to-understand manner. Distributors and retailers can also do away with cash-based transactions, as the platform comes with a secure and easy-to-use payment system. Now, instead of drivers or delivery personnel collecting cash, which is risky, they can simply make payments on the app, even if they don’t have a bank account.

In conclusion, there is tremendous potential for growth in the food and beverage industry, and by adopting RedConnect, players at all levels can increase efficiency, streamline operations and drive sustainable growth.  

To find out more about how RedConnect can help your brand, please get in touch via this contact form.

The Race for Analytics in the CPG Industry

Consumer-packaged-goods companies today are dealing with a lot of challenges, including economic uncertainty, rapidly changing consumption patterns, increased cost pressure due to retailer consolidation. As a result, the rate of growth in the industry has slowed down considerably, dropping to a meager 3.2% in the past decade. To achieve accelerated growth in this decade, players in the CPG industry are beginning to recognize the need for more robust data analytics tools and processes. A McKinsey survey of the most successful CPG companies of the last decade shows that they outperform their competitors in the categories that they compete, such as the usage of sophisticated analytical tools for setting prices and collecting data from retailers.

Why data analytics is vital for manufactures in the CPG industry

Incorporating data analytics into their processes provides CPG manufacturers with a mix of direct and indirect benefits. For starters, gathering and analyzing data means marketing teams can constantly produce never ending growth opportunities by designing buyer-specific campaigns and promotions. Businesses can also analyze the market situation in-real time and react to rapidly changing consumption patterns. An example of this was seen in the pandemic where change in the consumption habits of consumers led to rapid spikes and fall in demand in some product categories. Without access to real-time data analytics, manufacturers cannot react in time to match rising demand, leading to potentially huge losses.

Executives of consumer-packaged goods companies need access to powerful data analytics tools to make data-driven and well-informed decisions if they will emerge as true business leaders, as one poor decision in the fast-paced CPG industry can be disastrous. Therefore, employing a data-backed business strategy is crucial for success in a business landscape where there is almost no room for wrong decisions.  

As important as digital data analytics is, the CPG industry still has a lot of catching up to in terms of digital maturity. A 2020 Digital Quotient survey by McKinsey shows that the consumer goods industry is the third lowest digitally mature industry and is only fifth place when it comes to analytics maturity.

The challenges of adopting digital analytics tools and processes

While almost all business leaders in the CPG industry agree that investment in digital analytics is vital, more than half believe that these investments haven’t yielded the desired results. Research shows that only 40% of CPGS that have invested into building data analytics tools and processes have achieved returns above their capital cost. Here are some of the challenges that businesses face with adopting digital analytics processes that deliver.

Many B2B brands in the FMCG sector fail to connect their digital analysis programs to the enterprise strategy, treating digital analytics efforts a side, pet-project rather that seeing it as a tool that enables strategic goal setting and achievement. Other companies swing to the opposite side and invest data analytics tools and processes without understanding what their business’s unique needs are or how they will use the data generated to drive growth and provide significant impact.

Another challenge that brands face when adopting digital analytics is underinvesting in managing change. Senior executives often say that they wish they spend as much or even more on change management as they did on new technology. If the most senior business executives do not have a comprehensive plan to encourage the adoption of technology by the frontline workers, new techniques and tools won’t get maximized.

Winning the digital analytics race with RedCloud

As consumers rapidly adapt to new tech-enabled ways of shopping, the consumer purchasing path has become more complex, making it difficult for brands to know exactly where to adjust their efforts to compete more effectively. It's important for CPG brands to use data from various sources to influence their decisions in order to avoid wasting resources on unnecessary endeavors.

In the CPG industry, there are three main sources of data: social data, machine data, and transactional data. Social data comprises of a consumer’s online behavior, transactional data is generated by online and offline transactions and records. Unfortunately, these two types of data sources are limited in providing meaningful insights into the $760 billion CPG market, especially in emerging market where most of it isn’t captured or reported back to the manufacturers. Most brands simply lose sight of their stock the minute it’s shipped out, creating a lack of visibility across the entire distribution chain.

Thus, what the CPG industry needs is a digital solution that captures real-world behavior across the entire distribution network, provide brands with visibility they need into the behavior of distributors, retailers and the end consumer. In other words, they need RedCloud.

RedCloud has built RedConnect, the industry’s first digital ecosystem that allows brands to see exactly what is happening across their distribution network in real time, unlocking the full value of the network and providing the much-needed visibility. Now, marketing teams can do trade marketing with ease, and know what areas are consuming their goods the most, and design campaigns to better target those regions. Operations teams now have more visibility and control over order and inventory management.

With RedConnect, brands, distributors, and merchants can now sell smarter, buy better and pay simpler.

Creating Order - Driving Visibility in Inventory Management

To effectively meet consumer demand, CPGs must be able to successfully manage their inventory and control their stock. Without effective ordering and inventory management, brands run the risk of either having excess inventory causing product spoilage or having insufficient inventory which can lead to potentially huge losses due to their products being out of stock.

A survey conducted by the Association of Supply Chain Management (ASCM) of over 2,400 distribution chain professionals shows that inventory management is a top technical skill needed in this field. Without proper inventory management, brands would experience excess storage costs in times of low demand, and losses from out-of-stock situations in times of excess demand.

To properly manage their inventory, brands need to understand consumer patterns to synchronize available inventory with market demand. However, in the wake of the pandemic, buying and consumption patterns have changed rapidly, and brands do not have the capabilities to predict demand. The traditional systems that FMCGs, especially those in emerging markets, use to manage their inventory and satisfy market demands are not equipped to match the current market realities.

If brands are going to meet customers’ demands while maintaining and consolidating growth, they need more visibility across the entire distribution chain.

Challenges CPGs Face When Managing Inventory

Traditionally, FCMGs try to manage their inventory by following data based on seasonal changes of demand. Unfortunately, this method is built on local planning practices which is slow and inefficient since brands depend on manual methods of collecting data. This method has significantly longer lead times, which means brands can only look backwards and not forwards to understand shifts in consumption patterns. Because of this, sales and marketing teams are often incapable of predicting and adapting to changes in demand.

The last few years have seen rapid shifts in consumption patterns across the entire CPG industry, irrespective of the product category. The increasing dominance of technology and the consumer’s relationship with media means that consumers now have access to more products from different brands across multiple channels. The proliferation of social media, viral marketing, and the sharing economy also means that consumers are influenced from various sources about which products to choose, all of which makes it harder for brands to predict buying patterns. The effect of the pandemic on customers’ buying habits is that consumers are now willing to try out new products and buy from different channels.

Bringing Visibility to Order Inventory Management with RedCloud

The fast-paced nature of the CPG distribution chain coupled with the rapid changes in demand means that brands need a solution that provides them with increased visibility over the entire distribution chain. With increased visibility, brands can easily cope with market demands because teams can see in real-time the demand for their product, making managing inventory easier.  To do this, FMCGs need a digital solution that connects them to their entire network of distributors and merchants. This way, every interaction across the distribution network creates a new data point that can be captured and analysed to reduce errors, improve efficiencies, and better manage their inventory.

This is where RedCloud comes in. At RedCloud, we have built the CPG industry’s first connected digital ecosystem that gives brands unparalleled visibility over the entire distribution chain. With our platform, every connection and transaction is turned into a potential data point. You can now see which retailer or merchant is buying your products and where there is a high level of demand, as well as the location of each sale. All this data provides sales, marketing, and operations teams with an incredible amount of knowledge to reduce errors, increase efficiencies, and hit their targets. By granting increased visibility, marketing teams also have all the information needed for better trade marketing to create better campaigns and generate more ROI from their promotions.

Find out more about how RedCloud helps brands buy better, sell smarter, and pay simpler by filling out this contact form.

RedCloud Launches B2B Open Commerce Platform in Mexico

LONDON, June 2021 – RedCloud Technologies, the UK-headquartered global technology company has announced the extension of its local open commerce platform to Mexico to economically empower merchants of any size by enabling them to offer digital commerce to their customers through a single connected app.

RedCloud’s platform has already helped over 40,000 registered merchants to digitally serve over 1.2 million customers. The company has one of the world’s largest payment networks, allowing global brands to deliver a localized experience to the most vital parts of their retail chain. Stores and sellers are able to trade instantly with recognized brands, fast tracking them to the digital economy.

With the Red101 connected app, merchants provide commerce instantly through any connected device, selling electronic recharges of main brands like AT&T, Unefon, Virgin, Maz Tiempo, and Movistar to their customers.

Businesses on RedCloud’s open commerce platform can now meet the accelerating demand of consumers who want a faster and more personalized way to buy from their favourite stores, while enabling sellers to trade and pay in the new digital economy.

This move is certainly welcome, coming at a time when Central Bank of Mexico (Banxico)* is investing and building infrastructures so that “every Mexican can send and receive electronic payments regardless of their economic background or any other conditions.”

CEO of RedCloud, Justin Floyd said, "RedCloud's mission is to economically empower the world's small businesses by seamlessly connecting them to global and local consumer brands and be part of the open commerce revolution. Mexico is a market full of entrepreneurs who need a better way to trade, pay and finance their businesses to meet the accelerating consumer demand. We are delighted to partner with Banorte bank and Monterrey Digital Hub to make commerce universally accessible.”

Recently, RedCloud was selected by the United Kingdom Department of International Trade (UK DIT) as one of the top five British FinTech’s in the ScaleUp Bridge program, a joint program between the UK DIT, Grupo Financiero Banorte, and the Monterrey Digital Hub. The ScaleUp Bridge program aims to support five British FinTech's and connect them to Mexico’s digital entrepreneurship ecosystem. Banorte, one of Mexico’s largest banks promotes the program by providing specialised advice and mentoring to the FinTech's to reactivate the economy through innovation and attracting talent.

Eduardo Silva, the Chief Sales Officer at RedCloud, has also stated that “The Mexican market provides unique opportunities to partner with Mexican manufacturers, distributors and merchants to increase their revenue helping them to sell smarter, buy better and pay simpler. We want to be their partner of choice to make their sales channels work more efficiently, make better decisions with consumer data, and take marketing actions that raise sales velocity.”

The five FinTech's selected to join the program where those with the highest growth projection in essential areas such as payments and remittances, scoring, fraud and identity management, corporate financial management, and crowdfunding.

RedCloud is committed to bringing global commerce to local markets, empowering local merchants to provide more value and better services to their customers. This expansion into Mexico is in line with RedCloud’s aggressive growth plans.

About RedCloud

RedCloud is a global technology company headquartered in the UK, committed to developing solutions for FMCG brands, distributors, and merchants that allow them to buy better, sell smarter, and pay simpler. With its proprietary solution, RedCloud is poised to enable global commerce locally, connecting local merchants to more customers and distributors, and retailers to manufacturers.

*https://www.pymnts.com/news/banking/2021/how-mexicos-central-bank-plans-to-move-payments-to-digital/

Are your sales team left in the dark?

Your sales team are at the heart of your FMCG business, opening up new avenues for sales opportunities. For your sales team, the power of syndicated data and unlocking the benefits of it proves invaluable. The real question is, are your sales team left in the dark when it comes to analysis of the data made available to them?

Granular analysis of syndicated data will give powerful insights into:
- Where, geographically sales are decreasing
- Which of your products are in the highest demand and why.
- Why sales are decreasing.

Analyzed, Syndicated Data is Indispensable for Sales…

A healthy sales pipeline is built upon data-led insights and decisions which have enabled sales teams to re-strategize based on analysis of product consumption trends, merchant behavior, stock levels and overall sales performance.

Many organizations are utilizing some form of analytical or Business Intelligence tool to provide them with data insights into the many stages of their distribution chain. Typically, most of these tools ‘do what they say on the tin’ and deliver a very high-level overview of the distribution chain. Unfortunately, these tools are unlikely to provide any actionable insights for a sales team.

That said, studies show that sales teams who use some form of data tool in planning have a 54% greater forecast accuracy. Imagine what that percentage could be if the data were analyzed properly?

Syndicated data alone just isn’t enough.

For example, data which highlights a decrease in sales of a particular product is useful, however, wouldn’t you like to know:

- Why is there a decrease?  
- Geographically, where is there a decrease?
- What can we do to improve?

If you had a solution which could empower you with actionable insights, you could;
- Locate the geolocation in which sales have decreased.
- Redirect your sales and marketing efforts to new geolocations which would prove more fruitful.

Perhaps, you could have even communicated directly with your merchants to understand their challenges at POS?

This is just one of many examples of how analysis of syndicated data is invaluable to your sales team. Actionable insights fuel new strategies which subsequently, deliver the sales results your business needs to survive.

With the help of data analysis, sales leaders can make better decisions when it comes to their sales strategy. Proving this point, teams that use data analytics tools in their planning record 19% greater success in meeting their annual targets (51% vs. 43%) and 27% higher win rates (47% vs. 37%).

Let’s connect the dots and shed some light for your sales team…

RedCloud is the world’s first open commerce platform, specifically designed to unlock the value of the distribution chain by turning each stage into a data collection point.

The result?

You’re delivered actionable, real-time data insights throughout your distribution chain and a platform which empowers you to communicate directly with your merchants – giving you insight where you need it the most.  

Want to discover more? Contact us today to find out how we can increase your sales by up to 25%*.

*Statistic based on research conducted by Oliver Wyman.  

Is marketing in the dark costing you money?

The existing marketing analytics tools are inadequate

Many FMCGs already use data analytics tools to provide some data on their marketing performance, but the information received is not always actionable, often leaving more unanswered questions as the data is hard to interpret and turn into actionable points. The tools are disconnected, and the data gathered is not syndicated across each point in the distribution chain, resulting in significant gaps in the data produced that keeps your marketing in the dark.

For many marketing teams, the tools available provide too much unnecessary information, tracking metrics that are not useful and generating ‘noise’ that keeps you from getting a clear picture of your marketing performance or understanding buyer behavior throughout the customer journey. Another problem is that the analytics tools available cannot provide data in real-time, so marketers only have access to legacy data that only allows them to look back, not forward. The inability to perform predictive analysis means that you cannot rapidly respond to shifts in demand or create new routes to market, restricting you from becoming a true market leader in the competitive CPG industry.

Despite the seeming abundance of data, marketing teams don’t know where the demand for their products is, or which campaigns deliver the most revenue. This situation persists even though marketing data and analytics is a key investment area by FMCGs. A 2020 survey of over 400 marketing leaders showed that CMOs ranked data and analytics as the most important area to invest in. However, more than half the senior marketers surveyed, including CMOs and VPs of marketing, are unimpressed at the results generated.

Only real-time, actionable insights can close marketing gaps and drive sales

To create better campaigns that maximize sales opportunities and meet revenue targets, you need more than a tool. You need a connected commerce platform that doesn’t leave you in the dark but gathers syndicated data to shed light on every stage of the distribution chain.  

For example, knowing that there is an increase in sales of a particular product is certainly advantageous, but it will be better to know:

  • Why is there an increase in demand?
  • How that increase is spread among different geographic locations ?
  • Who is buying more of your product?
  • What campaign or promotion was responsible for the increase?

With a market intelligence solution that gives actionable insights in real-time, you can:

  • Identify where the increase in demand is coming from.
  • Identify the type of buyer that is most likely to buy your goods (grocery store, supermarket, convenience store, etc.) and put the right products in the right store.
  • Monitor the effectiveness of the end-to-end customer journey from store to shelf.
  • Create laser-focused, cost-effective campaigns targeted at the right kinds of buyers.
  • Communicate with merchants in real-time to discover the challenges faced at POS.

Syndicated data gives you the power to create specific campaigns targeted at the right buyers, drive consistent merchant engagement, and reduce the cost to serve each customer, thereby expanding your customer base!  

This is just an example of how granular insights with data captured across the entire distribution chain can increase the effectiveness of your marketing. With these insights, you can create new data-driven marketing strategies and open new routes to market, taking advantage of the micro consumption patterns in the market to create new demand for your products.

Shed some light for your marketing team

RedCloud has built the world’s first open commerce platform that unlocks the full value of the distribution chain, allowing you to gain valuable data from every point of the distribution chain. With the actionable insights provided, you can now identify and maximize opportunities to upsell and cross-sell your products in real-time, identify gaps and opportunities within the market, create new demand for your products, target the right merchants with specific campaigns, and even drive merchant behavior with automated communications.

By partnering with RedCloud, you can bring your marketing out of the dark and increase your revenue by up to 25%.

In my next blog, we will explore how best to utilize data to increase engagement and sales.

Automate to Accelerate Your Sales

Lack of sales automation is the reason many sales leaders are struggling with slow sales cycles and the inability to spot new sales opportunities.

Many FMCG sales leaders report that a substantial amount of sales time is absorbed through manual administrative tasks, such as visits to their sellers' stores to; chase orders, obtain information on stock levels and to gather feedback on product consumption trends.


As a result, many are suffering from:
- A slow sales cycle: because orders are being taken manually, through store visits.
- An inefficient sales team: because they are spending too much time on administration and reporting.
- A lack of new sales opportunities: because the team are unable to obtain enough data to drive data-led, strategic decisions.


Fact: Adoption of Automation Increases Sales

Brands who adopt sales automation early on consistently report a 10-15% increase in efficiency, a sales uplift potential of up to 10% and a reduction in order processing time from 2-3 days to just 1-2 hours.

With SG&A costs absorbing up to 25% of total revenue, brands need to rapidly adapt to new and more efficient ways of working to protect revenue.

Not only manual data capturing methods are time-consuming for sales, but they often provide inaccurate and very little insight into the entire sales cycle, which, of course, sales rely upon to build an effective sales strategy.

Research shows that around one third of sales tasks can be automated and that if automation was implemented, FMCGs could free up valuable time for their sales teams – which, could be spent on the generation of NEW sales opportunities.

By automating your data you are securing it, as the data is in a central source and no longer in the hands of staff on paper files. By centralising your data, the data becomes more accessible across not only the sales team, but across the entire organisation, including marketing. The utilisation of this data at every point of the sale, unlocks new opportunities and increases customer engagement, through sales activation. Your data becomes live and you are able to track movement in real-time.

Discover the world’s first open commerce platform

RedCloud is the world’s first integrated open commerce platform, specifically designed to unlock the value of the distribution chain by transforming  each stage in the POS into a valuable data collection point and by connecting brands to their; distributors, retailers, and sellers.

Here are some examples of how automation with RedCloud can help to increase your sales by up to 25%*.

- Digitalisation of the order and payment process for sellers, via an app

- Digitalised and granular statistics on product consumption trends and real-time visibility of inventory
  allocation and inventory flow
- Automated and data-led marketing engagement and communication with sellers

- Automated SLA tracking

Want to discover more? Contact us to learn how we help FMCG brands and distributors globally to accelerate their sales by up to 25%*.


*Statistic based on research conducted by Oliver Wyman

Killing the Cash Cow: Eliminating the FMCG industry’s trillion-dollar cash problem

The reality of cash payments

Cash payments remain prevalent across the developing world because retailers want it. It’s convenient, instant, and accepted everywhere, which makes it preferable. This poses a problem to brands and distributors, as most digital payment solutions don’t have the same widespread acceptance, therefore, merchant adoptions of digital payments remain extremely low.

In many cases, an attempt by FMCG brands and distributors to solve the cash problem follows this pattern:

  1. Brands discover how much is lost through cash handling.
  2. To fix this problem, a digital payment solution is created, either built in-house or in partnership with a third-party payment provider.
  3. The payment platform is then rolled out to merchants, and sales & marketing teams are tasked with getting merchants to sign up to use the platform.

Merchant acquisition is low, with less than 10% of merchants using the platform consistently, making it cost-inefficient

Every day, similar scenarios play out across the world, from Latin America to Africa and Asia. A large FMCG in Argentina that I have spoken to, hires delivery trucks that move around every day, transporting substantial amounts of cash to a central warehouse for processing and reconciliation. This a huge concern, as the cost implications are enormous. Even the most conservative estimates put cash handling costs at 2% of total revenue, which means that an FMCG that processes $300 million worth of business annually loses $6 million to cash payments.

The retailer lynchpin

A critical look at the state of cash payments in the CPG industry shows that merchant adoption is crucial to the success of any payment digitization process. Unfortunately, many retailers still prefer to use cash for cultural and historical reasons and don’t have any incentive to switch to digital payments.

While retailers lose a significant amount of money due to cash handling, these costs are hidden and hard to identify, making cash payments seem preferable. The three main reasons I have identified as to why retailers are not transitioning to digital payments are:

  • Digital and financial literacy: Retailers and merchants in developing economies have been using cash for generations. Switching to digital payments requires a new way of thinking about money. In addition, adopting a digital payment platform means learning how to use new technology, which can be off-putting for merchants who are not tech-savvy.
  • Trust in payment providers: Digital payments require that retailers trust the payment provider with the security of their funds. However, many merchants aren’t aware of the security measures in place to protect their funds and are sceptical about placing their business funds in the hands of an unknown third party. This makes it a battle to get a high adoption rate for digital payments.
  • Hidden cost of cash revealed: Most digital payment platforms charge transaction fees, which can seem expensive to an average retailer.  Merchants may resent the fact they are being charged to use their own money where previously these costs have been hidden.

Brand-retailer partnership is the solution

Solving the cash payments problem can only be accomplished when brands partner with all the players along the distribution chain. Distributors and merchants along the chain must:

  • Sign up for the same payment service/platform (acquisition)
  • Have an incentive to use the payment service (value to all players on the chain)
  • Remember to use the service (top of mind)
  • Know how to use the service (digital & financial education)
  • Be willing to pay for the service

Building this partnership is accomplished in 3 ways:

  1. Driving digital and financial literacy via customer success teams and initiatives.
  2. Providing specific incentives that encourage merchants to adopt and continue using digital payments. These include access to financing and targeted trade promotions from brands.
  3. Integrating digital payments with an open commerce platform that unlocks the value of the distribution chain with advantages like real-time data and insights into consumption patterns, market intelligence to help drive sales, and automated communications to reduce order processing time.

The old way of throwing an app at merchants to solve the cash problem has proven not to work in the long run.

An advantage of switching to a digital payment system is the access to financial services such as supply chain financing, loans, and other credit facilities. Access to finance remains one of the biggest obstacles to growing their business for many MSMEs, with the credit gap for MSMEs estimated at $5 trillion, 1.3 times the current level of MSME lending. Relying on cash payments means there are no accurate records or credit history, which prevents businesses from accessing financial services. Digital payments build upon financial records, which can be collateralized to access credit facilities.

Digitalize your distribution chain to solve the cash problem forever

Digitalizing the entire distribution chain is the only way brands can permanently solve the cash payment problem. Instead of building stand-alone digital payment platforms that never get adopted, what you need is an integrated commerce platform that unlocks the value of the entire distribution chain.

By opening new communication channels with merchants, providing credit facilities, and providing real-time market insights that can help businesses grow, merchants will see the advantages of digital payments, leading to widespread adoption. This is will in turn lead to faster payments, increased sales velocity and more revenue for FMCG brands.

RedCloud has built the world’s first integrated open commerce platform solves the cash problem with an integrated payment system. In addition, we also unlock the entire distribution chain and deliver value to brands, distributors, and retailers with access to real time data and insights that support strategic decisions. This increases the sales volume and frequency for all players across the chain, leading to true business growth.

Merchants who already use RedCloud have reported a 40% increase in business and are willing to recommend it to other merchants. This positive engagement with existing merchants helps to increase the adoption of digital payments through recommendations and repeat business. By partnering with RedCloud, FMCG brands can reduce costs and increase revenue by up to 25%*, a true win-win for everyone in the CPG industry.

In my next blog, I will be discussing the hidden costs of money and how retailers are losing up to €80 billion globally to cash payments.

*Statistic based on research conducted by Oliver Wyman.  

Automate to Accelerate your Marketing

Accelerate your marketing by adopting automation

The FMCG industry is changing rapidly, and with the rise of digital, brands must build better relationships with their merchants and distributors while offering personalized experiences. Achieving this at scale is impossible via manual methods, which is why automation is crucial to remaining profitable.

According to Forbes, 63% of the companies outgrowing their competition use one or more automation tools, and 78% of high-performing marketers indicate that these tools have helped increase their revenue. Another study reported that B2B marketers also contributed to a staggering 44% of the sales pipeline by implementing marketing automation, which is a 10% increase over those who have not yet adopted this approach.

By adopting marketing automation, you can:

  • Improve customer experience: Today’s customers want a personalized experience that manual marketing processes cannot provide. You can create and automate highly tailored and targeted campaigns based on merchant behavior, leading to increased ROI and brand loyalty.
  • Increase average transaction value: Automated product recommendations are one of the best drivers of repeat sales, allowing you to upsell and cross-sell your products, increasing the average value of each transaction with merchants and distributors.
  • Increase merchant lifetime value: By implementing automated, data-driven marketing strategies, you can increase revenue through merchants spending more during their interactions with your FMCG brand.

Automate to accelerate campaign precision

Automation accelerates your marketing with personalized messages that increases order velocity and frequency which directly leads to increased revenue for the brand. Ad Week published a study that shows personalized marketing campaigns can:

  • Increase revenue by 5 – 15%
  • Boost the efficiency of marketing spend by 10 – 30%
  • Reduce customer acquisition costs by up to 50%

The question to you is: do you have the capability to target your merchants based on product consumption trends, stock levels, and product popularity? Can you run targeted, buyer-specific promotions based on granular data insights?

If the answer is no, then you need to accelerate your marketing with RedCloud.

Sell smarter with the world’s first open commerce platform

RedCloud is the world’s first open commerce platform that unlocks the full value of the distribution chain, transforming every interaction into an intelligent data collection point and connecting brands to their distributors, retailers, and merchants.

With built-in market intelligence, you have access to real-time, actionable insights that allow you to:

  • Understand buyer and product consumption trends
  • Target the right merchants with the right promotions
  • Monitor marketing ROI and make changes in real-time as required
  • Consistently communicate with and engage with your merchants

Want to learn more? Contact us today to discover how partnering with RedCloud can increase your sales by up to 25%*.



*Statistic based on research conducted by Oliver Wyman.  

Why More Money is Killing Your Business

The hidden cost of cash for retailers

Accepting and managing cash payments is expensive, costing many retailers between 4.7 and 15.3 percent of total revenue, meaning that for every $100 sold, the business pays between $4.70 and $15.30 to manage their cash. Every year, retailers lose $99.56 billion to shrinkage, with over 34% of this shrink attributed to cash theft. These costs are mostly borne by ‘mom-and-pop’ shops and other independent small businesses that operate in poor, rural areas and cannot afford sophisticated security and cash transportation systems. Despite these issues, most small and medium retailers still prefer cash as costs are hidden and are perceived to have certain advantages.

To successfully solve the cash problem for retailers, payment providers must accomplish 3 things:

-          Educate merchants and retailers on the costs of using cash.

-          Provide value-added services to drive merchant adoption of digital payments.

-          Provide the technical support needed to make the switch easier.

Any provider that succeeds in digitizing payments for the retail commerce space would unlock a massive opportunity – the $19 trillion in cash payments made in the retail industry, which is almost 500 times the total volume of payments made across the entire mobile money industry.  

It’s not enough to be as good as cash, be better.

While the promise of solving digital merchant payments is clear, how to succeed in the space is not. Many successful digital financial services (DFS) players have found out that cash works well enough in retail commerce for merchants. Moreover, to drive merchant adoption rates to sustainable levels, being just as good as cash is not enough - digital payments must be significantly better than cash. Behavioral inertia is significant but can be overcome with a genuinely compelling value proposition.

Compelling value propositions must be built into the payment element and must solve merchants’ challenges. These value-added services should speak to the specific pain points and use cases of the prospective users. 3 major challenges that merchants experience that can be addressed by digital solutions are:

Accessing inventory and capital

The most common challenge that small and medium retailers identify is the lack of access to working capital and credit facilities. 40 percent of MSMRs globally have unmet financing needs and the global credit financing gap for MSMRs is $5 trillion, 1.3 times the current lending rate.  Digitizing merchant payments is key to unlocking financial access for these underserved businesses by generating detailed revenue data that support low-cost credit scoring.

Merchants also face several challenges around inventory, which include keeping track of their stock in real-time, reducing lead times on orders, and paying for inventory when delivered. I know a brand in Africa that has up to 16% of orders returned because merchants do not have enough cash on hand to pay for the products when delivered, leaving the brand to bear the cost of unfulfilled orders.

A digital payment solution reduces friction and the cost of doing business, especially when adopted across the entire distribution chain. With an integrated payment and ordering platform, a merchant can communicate directly with the distributor to place an order, pay via the same platform, and receive their inventory quicker.

Managing customer relationships

The inability to identify loyal customers and target them with discounts and promotions is a significant barrier to increasing sales. With digital payments, records of customers and their transactions are recorded automatically, and the POS data can be used to target loyal customers with communications that drive sales. For example, if a merchant knows their top 10 customers, they can send customized SMS messages advertising a new inventory and offering a discount, potentially increasing sales by up to 10%.

By bundling customer relationship management capabilities into a digital solution, merchants will be more likely to adopt the platform, a win-win for the entire industry.

Extracting business intelligence

In developing economies, most merchants only have a vague idea of their business’s health and their ability to drive growth. Much of this perception is based on intuition, rather than detailed analytics. However, DFS providers can build solutions that generate detailed analytics from payment data. This analysis can show how sales this month compared to sales in previous months, for example, and could even compare the merchant’s performance to others in the area. More advanced analytics can use transaction data to analyze micro consumption patterns in the market and give recommendations on product and pricing opportunities to merchants. This sort of market intelligence is invaluable to the small and medium retailers who operate on razor-thin margins.

Unlock a cashless future with RedCloud

A critical look at these pain points shows that the 3 main areas that retailers have challenges: buying, selling, and paying, and these are the 3 areas that RedCloud focuses on delivering value.

RedCloud has built the world’s first integrated open commerce platform that unlocks the value of the retail distribution chain, enabling brands, distributors, and merchants to sell smarter, buy better, and pay simpler. More than just a payment platform, RedCloud tackles the cash problem from both ends by connecting the informal retail sector to the digital economy, eliminating the significant cost brands and distributors incur due to cash processing fees or lost orders and provides value-added services that incentivize merchants to accept digital payments.

RedCloud provides real-time data insights and unparalleled visibility into the distribution chain, turning every transaction into a data point. Now, merchants can communicate effectively with brands, distributors, and their customers, leading to shorter lead times on orders, instant payments, and access to credit via supply chain financing.

We’ve also gone one step further in driving merchant adoption, by enabling merchants to expand their offerings to include digital products like airtime, digital TV services and earn a commission on each sale. Merchants that use Red101 have recorded business growth rates of up 40% within 6 months and even express their willingness to invite their friends.

By empowering small and medium retailers across the emerging world with business intelligence capabilities, faster payments, access to credit facilities, and commissions on digital product sales, we’re building the future of retail – seamless, end-to-end digital commerce that works for everyone.

Partner with RedCloud today to see how we can increase your revenue by up to 25%.

Dare to be Different: Marketing Innovation powered by Data

FMCG brands today are dealing with a host of challenges – including rapidly shifting consumption patterns, intensified cost pressure due to retailer consolidation, and the rise of hard discounters. This has led to stagnant growth over the past few years, with economic profit nosediving from a 10.4 percent growth rate per year from 2000 to 2009 to a meagre 3.2 percent per year from 2010 to 2019.

The impact of marketing on sales in the FMCG industry is two to three times that of other industries, with some product categories such as beauty having 45 percent of sales attributable to marketing. Thus, marketing teams are constantly under pressure to operate quickly and generate ROI on marketing spend. To achieve their targets month-on-month, and drive sales successfully, data-driven, innovative marketing strategies are a must-have.

Data-driven marketing is necessary, but traditional FMCG marketing is data-challenged

A recent research study by Google shows that developing and implementing data analytics capabilities at scale can drive over 10% of sales growth for FMCGs, of which 5% comes directly from marketing. In the face of modern industry challenges - the impact of the COVID-19 pandemic, rapid growth of technological capability, and fast-changing consumer trends, leveraging data analytics is not just beneficial for marketers; it is essential.

Access to real-time data-driven insights can help drive growth and help set targets, yet brands are faced with several challenges, such as:

  • Capturing and analyzing vast quantities of data generated: On average, brands only have access to one-tenth of the data retailers have. Lacking access to the vast amounts of valuable data generated from each transaction, across multiple data points, brands remain in the dark about which marketing strategy works and what does not. The lack of visibility into the results of marketing activities across the entire distribution chain means teams must rely on legacy data and can only look backwards, not forward.
  • Extracting meaningful insights from captured data: Most marketing data is still siloed and only available in spreadsheets that are hard to understand. The sheer volume of data available and the format in which it is presented by most available tools are practically incomprehensible and will overwhelm even the most seasoned category manager.
  • Leveraging insights to drive sales and increase revenue: The limited insights available are not inherently actionable, as trade marketers and salespeople cannot take advantage of the information to drive sales and grow market share.

These challenges mean marketing teams are stuck, unable to create innovative data-driven marketing strategies, drive growth and increase revenue.

Access to real-time, syndicated data is the key to driving growth

90% of FMCG leaders consider data collection, activation, and scaling as key obstacles to achieving their marketing goals. While many brands have begun the journey of identifying tactics and use cases that can leverage data, there is still a considerable gap between what can be achieved with existing tools that provide outdated and unactionable data and what brands really need – actionable insights from real-time, syndicated data.

Innovative marketing that delivers results requires more than just a tool. Brands need a connected digital commerce platform that allows them:

  • Develop channel strategies and grow market share: By analyzing sales data to identify micro consumption patterns in the market, you can redirect sales and marketing efforts to the most suitable geolocations, aligning marketing strategies with preferred channels to increase market share.
  • Optimize marketing spend for better results: Advanced analytics capabilities allow marketing teams to identify the best and least performing campaigns in real-time. These insights enable marketers devise cost-effective marketing and campaign strategies that generate the highest ROI.
  • Build stronger connections through consumer insights: Customer segmentation increases campaign effectiveness and drives revenue growth by up to 7%. With real-time, syndicated data insights, you can better understand the behavior of key customer segments, identify who is most likely to buy from you and create targeted, buyer-specific promotions to upsell and cross-sell your products, yielding up to 60% increase in revenue.

An analysis of the most successful FMCG brands in comparison to the competition shows an overwhelming dominance in the capture and use of data in their marketing strategies. Winning brands collect up to 47% more data from retailers, analyze buyer attributes in more depth and generate more granular insights than their competitors.

Increase your revenue by up to 25%* with RedCloud

Utilizing data analytics in marketing can increase revenue by up to 25%*, but achieving this requires your brand to adopt a digital commerce solution that:

  • Systematically captures data from different data points across the distribution chain
  • Apply intelligent algorithms that recommend actions based on insights.
  • Deliver data insights and visualization in easy-to-understand reports
  • Allow instant, and seamless communication with distributors, merchants, and retailers.

This is what partnering with RedCloud brings to your organization – a connected open commerce platform that helps marketing teams gather valuable data-driven insights to sell smarter

RedCloud is the world’s first integrated open commerce platform that unlocks the full value of the distribution chain, connecting brands to distributors and retailers in new and more powerful ways. With RedCloud, marketing teams can finally gain access to real-time data analytics across the entire distribution chain and POS, leveraging these insights to improve campaign performance, increase ROI on marketing spend and drive sales.

Contact us to find out how RedCloud can drive innovation in your marketing, helping you sell smarter and increase revenue by up to 25%*.

*Statistic based on research conducted by Oliver Wyman.  

Dare to be Different: Creating new sales opportunities with data

Developing markets hold tremendous growth potential for the FMCG industry and are likely to generate new consumer sales of $11 trillion by 2025, an equivalent of 170 Procter & Gambles. However, local competitors and smaller brands will fight for that business in ways that established multinational FMCG brands have not seen. Smaller brands currently account for 19% of dollar sales and more than half the growth (53%) in the FMCG industry.

These changes in the FMCG industry have prompted sales leaders to re-assess their strategy and create an opportunity for sales teams to discover new business models, leverage technologies, and further corporate learning for long-term growth and brand loyalty. Brands must equip their sales force with in-depth market insight delivered in real-time to enable them to deliver consistent results month after month.

Lack of data at POS restricts growth for FMCGs

As new competitors enter local markets with locally relevant products and win market share, established brands need to respond and compete with a strategy that helps maintain market share while identifying new growth pockets to leverage.

FMCG sales teams struggle to hit their targets and capture market share due to the lack of real-time data across the distribution chain. Identifying and maximizing growth opportunities is almost impossible as sales teams lack insights on:

  • who is buying their products,
  • where the demand for their products are, geographically,
  • why there is an increase or decrease in sales,

SG&A costs also remain high, up to 20% of revenue, as sales reps spend a considerable amount of time physically visiting merchants, collecting POS data manually, and then entering them into spreadsheets. The lack of actionable, syndicated data insights coupled with the manual data collection efforts leave sales teams unable to capture new geolocations and drive growth.

Actionable, data-driven insights is the only way forward.

Succeeding in this competitive marketplace will require sales teams to re-evaluate their route-to-market strategy, leverage the wealth of consumer data available to identify areas of new demand, and take advantage of these growth pockets with real-time, data-driven insights. To expand into new geolocations and increase market share, sales teams need a solution that

  • Captures real-time data from multiple points across the entire distribution chain
  • Sifts through the large amounts of data captured,
  • Generates actionable insights that can be applied to drive sales.

By capturing POS data syndicated across the entire distribution chain and identifying the micro-consumption patterns in the market, sales teams can create new sales opportunities by:

  • Understanding and segmenting their customers: With real-time, syndicated data analytics, you have in-depth visibility across the entire distribution chain and can create custom, targeted propositions for different customer segments. You also see the most effective promotions for each buyer type and replicate them to drive growth.
  • Generating and evaluating effective route-to-market (RTM) strategies: The current route to market in developing markets has a high cost to serve and is one of the FMCG industry’s barriers to profitable growth. To effectively win new markets, FMCGs need to establish, integrate, and digitize ecosystem partners across the end-to-end RTM value chain. Adopting a digital technology-based approach to RTM, sales leaders can increase sales by 20% and salesforce effectiveness by 5 to 10%.
  • Failure-proofing the supply chain: The supply chain is the lifeblood of any FMCG business, which is why 83% of industry decision-makers rate “out-of-stock” as the number one pitfall affecting ROI. Using synced geoanalytics data, sales leaders can optimize the distribution process by merging multiple delivery networks to create a faster, more efficient distribution chain. Research has shown that FMCGs that integrate data analytics into their operations lead to a 4.25x improvement in delivery times and outperform their competitors by as much as 5% in productivity and 6% in profitability.

Create new sales opportunities with RedCloud

Seeing just how important real-time, syndicated data analytics is to create and optimizing new sales opportunities, brands need a solution that gives in-depth views into sales data to uncover unmet needs and identify growth opportunities. Simply put, your business needs RedCloud.

RedCloud is the FMCG industry’s first digital open commerce platform that unlocks the value of the distribution network and transforms each industry connection into potential valuable data points. Our intelligent platform captures real-time data syndicated across multiple data sources in the distribution chain – distributors, retailers, and merchants and provides actionable recommendations to sales teams. With access to actionable, data-driven insights, sales teams can better allocate their Inventory across the value chain, moving beyond simple reactive operations to take proactive decisions.  

RedCloud also makes entering and competing in new geolocations easier by enabling you to evaluate the distribution landscape, identify the strongest distribution channels for your business and prioritize the best retail partners to ensure success.

The key to sustainable growth for FMCG brands

The FMCG industry has had a long history of generating reliable growth through mass brands. In 2010, the FMCG industry was responsible for creating 23 of the top 100 global brands and had grown the total return to shareholders (TRS) by almost 15% per year for 45 years. However, shifting consumer behaviour, retailer consolidation, and the rise of hard discounters is placing increasing pressure on this traditional value-creation model. As a result, in 2016, 62% of FMCG companies missed their revenue growth target, and most of those companies were not first-timers, as 59% of the brands in question had missed 4 of their last 8 top-line quarterly targets.

FMCGs must re-evaluate their go-to-market strategy, especially in emerging markets and embrace an agile digital-first operating model that increases market share and drives sustainable growth.

The traditional FMCG business model is not enough anymore

The FMCG industry generated tremendous growth in previous decades with a value creation model that involved:

  • Building mass-market brands, which achieved reliable growth and gross margins of 25% on average over non-branded competitors.
  • Cultivating relationships with distributors and mass retailers that provided advantaged access to consumers.
  • Entering developing markets early and actively dominating categories as consumer purchasing power increased – this strategy generated 75% of revenue growth in the sector.
  • Designing operating models for cost reduction and consistent execution, keeping SG&A costs between 4 & 6% of revenue.

In recent times, however, this model has lost steam with top-line growth slipping in most subsegments. Large food-and-beverage manufacturers, which account for about 50% of total category sales, have remained stagnant with an average growth rate of only 0.3% per year. In contrast, midsized companies expanded sales by 3.8% and small companies by 10.2%.

FMCG brands are stagnating due to a lack of technology adoption

The growth of major FMCG brands is slipping as the traditional model is being disrupted by technology-driven trends.  Over the last few years, companies with a net revenue of $8 billion and higher grew at only 1.5% (55 percent of global GDP), while companies under $2 billion grew at twice that rate, showing that large FMCGs face a serious growth challenge.

Important trends that have disrupted the traditional value-creation model are:

  • The explosion of small brands: Smaller consumer-goods companies are growing rapidly, being fueled by over $9.8 billion in venture funding over the past 10 years, and capitalising on millennial preferences and digital marketing.  These brands are often hard to spot as they sell through channels not covered by the data the industry has historically relied on heavily, making them invisible to larger brands until it’s too late.
  • The disruption of mass-retailer relationships by e-commerce giants and hard discounters: E-commerce giants like Amazon and hard discounters like LIDL are fuelling a fierce business-model battle in retail and mass merchants are feeling the squeeze.
  • Amazon, Alibaba, and JD.com grew gross merchandise value by an unprecedented 34% between 2012 to 2017. Meanwhile, in Latin America, over 22,000 smaller merchants have been forced to close, while major FMCG brands have lost 7 – 10% of their market share to discounters.
  • The rise of digital: Digital is revolutionising how companies learn about and engage with consumers. Traditional mass channels and marketing standards are rapidly becoming obsolete as digital tools increase the volume of data collected each year, boosting brand capabilities but also consumer expectations.

While many FMCGs have started to adopt digital technologies, there is still a long way to go, especially in embracing truly data-driven marketing and sales processes.

Key growth drivers for FMCGs

To effectively drive growth in this competitive retail landscape, FMCG brands must adopt a new model that places digital at its center. We have identified 3 main drivers for FMCG brands that are essential to driving growth and increasing market share.

  • Fast-tracking technology adoption: To remain successful, brands must invest in understanding their customers to segment and prioritise initiatives. With granular POS data and syndicated consumer data, you can segment customers in multiple ways and understand what’s important to them, enabling effective communication and allowing you to deliver the right product, at the right place, at the right time.
  • Uniting all industry stakeholders: The current landscape of the FMCG industry is about reinventing relationships, hence, manufacturers, retailers, and suppliers must be open to collaboration. This requires in-depth insights into the entire distribution chain with expanded availability of customer data, allowing a deeper and more nuanced understanding of market movement. This way, brands can identify and eliminate potential bottlenecks, reconfiguring the traditionally fragmented distribution chain into digitally agile and efficient value chains.
  • Leapfrogging new category creation in developing markets: To capture the $11 trillion potential growth in emerging markets, FMCGs must excel in digital execution. Your brand needs strategic, data-driven decisions in sales and marketing, combined with a route-to-market strategy that incorporates traditional, omni, and e-marketplace channels.


Achieving all of this is not an easy task, and so, this is where RedCloud comes in.


Grow your brand with RedCloud

RedCloud is partnering with FMCG brands to change the way you do business. With the world’s first open commerce platform, we unlock the value of the entire distribution chain, transforming existing industry relationships into potential data points.

Now, brands can access POS data in real-time and understand the micro-consumption patterns in the market to make strategic decisions to drive growth. Sales and marketing teams are no longer in the dark, as campaign performances and shifting demand patterns can be analysed in real-time to generate actionable insights – insights that are invaluable to penetrating new markets.

With RedCloud, your brand can finally compete by leveraging innovative technology to improve profitability and drive market share.

Contact us today to see how we drive business growth and improve revenue by up to 25%*.

*Statistic based on research from Oliver Wyman.

Driving growth with digitalized distribution

The global FMCG industry is predicted to grow at an incredible 5.4% each year to reach $15 trillion by 2025, with much of this growth coming from developing markets, according to a report from Allied Market Research. However, historic data shows that large FMCG brands are stagnating rather than growing, with small companies generating two to three times their fair share of growth. According to a Nielsen report, the majority of growth (53%) in FMCG sales comes from the smallest manufacturers who seem to be cannibalizing sales from the largest food and beverage brands, whose market share dropped to 31% and contribute only 2% of the sector growth.

Smaller brands and e-commerce giants have outpaced large FMCG brands in driving growth due to their digital-first approach. With consumers changing the way they shop, digital technology has allowed smaller companies to remove their dependence on traditional distribution routes and gain faster routes-to-market, which is invaluable in developing economies. To remain competitive and recover market share, FMCG brands must fundamentally revisit their way of working and transform their distribution chain. If they continue with the traditional model of mass marketing, large FMCG sales teams will struggle to drive growth effectively.

The traditional distribution chain causes stagnation

The traditional FMCG distribution chain in emerging markets is characterized by a complex maze of intermediaries and players, including distributors, sales reps, wholesalers, and retailers. Despite the importance of the CPG industry, much of it is unorganized, with local convenience shops and mom-and-pop shops still playing a dominant role. The abundance of middlemen and the fragmented nature of the distribution chain continues to impose a challenge to the growth of FMCGs due to:

  • Lack of visibility across the value chain: This is a significant problem for FMCG brands, especially in emerging markets like Africa, where van sales are still commonplace. With this inefficient distribution model, line of sight throughout the supply chain is almost impossible, leaving brands with no data at POS or insights into actual consumer demand.
  • Sales and marketing teams are left in the dark, lacking the data and insights needed to respond to market demand in real-time and make strategic data-driven decisions to drive growth.
  • Slower route to market: The traditional distribution chain is highly fragmented and interdependent, which increases the friction that large brands encounter when allocating inventory and moving products to the end consumer.
  • High SG&A Costs: SG&A costs remain high and may account for up to 20% of annual revenue in the current sales process as sales representatives have to visit merchants to gather data manually.

To maintain market share and drive growth in developing markets, FMCGs must embrace an agile, digitalized distribution chain to optimize their distribution processes, increasing efficiency and reducing risk and cost.

Digitalizing the distribution chain is the way to grow

The annual consumption in developing markets is expected to hit $30 trillion by 2025, one of the largest growth opportunities in history. To maximize this potential, brands must transform their distribution processes and rethink how they interact with retailers.

Adopting digitalized distribution allows companies to meet rapidly changing consumer demands and address the challenges that traditional distribution could not solve, leading to a distribution chain that is:

  • Faster: With advanced forecasting approaches built on predictive analysis of syndicated data across the entire value chain comes a more precise forecast of consumer demand. What were once monthly forecasts become weekly and even daily.
  • More flexible: Sales teams can now respond flexibly to rapid changes in consumer demand, reducing “out-of-stocks” and empty shelves at POS and saving the $1 trillion lost every year.
  • More granular: By understanding the micro-consumption patterns in the market, companies can manage demand at a granular level with intelligent, data-driven inventory allocation that capitalizes on higher margins.
  • More efficient: With access to data analytics, sales representatives can automate sales processes and free up valuable time to generate new sales opportunities, leading to a 10 - 15% increase in efficiency.

Digitalize your distribution chain with the world’s first open commerce platform

To achieve growth targets by digitalizing the distribution chain, brands need a fully integrated system that connects manufacturers, distributors, wholesalers, and retailers, unlocking the value of the distribution chain. This integrated system needs to provide real-time, syndicated data to a granular level across the entire value chain, which can be broken down per distributor and even per retailer. While many FMCGs are beginning to adopt digitalizing their distribution processes, this level of in-depth insight into the value chain is almost impossible. Until RedCloud.

RedCloud is the world’s first open commerce platform that unlocks the full value of the distribution chain, connecting brands, distributors, retailers, and merchants. With RedCloud, you have access to real-time data captured across the entire value chain, giving sales and marketing teams:

  • Increased visibility:  Armed with real-time, granular insights, your brand has increased visibility at POS and can identify rapidly shifting consumption patterns in real-time to identify areas of high and low demand. You can also re-allocate inventory intelligently, based on customer segmentation to capture new sales opportunities that can increase revenue by up to 7%.
  • Faster route-to-market: RedCloud provides better data analytics to help your sales teams create an agile, data-driven go-to-market approach that improves sales and lowers the cost to serve by up to 15%.
  • Reduced SG&A costs: RedCloud allows you to automate sales processes and eliminate time spent on manual tasks like visiting merchants to collect data, physically selling products at the door reducing SG&A costs by 70%.

RedCloud is the partner your brand needs to digitalize the entire distribution chain, drive growth, and increase revenue by up to 25%*. To learn more about our solution and how it can help your business, request a demo today.

*Statistics based on research from Oliver Wyman.

Improved Market Visibility for Distributors

Distributors in emerging markets are facing a major disruption in their distribution model, with key metrics showing that challenges to the traditional models have eroded the financial health of distributors. The rise of modern trade and digital commerce threaten traditional distribution and have driven gross profit margins down by an average of 4% per year, resulting in direct EBITDA reduction of 1 to 2 percent, showing that distributors cannot maintain profitability levels.

The average return on invested capital (ROIC) for distributors ranges from 20-30 percent – significantly lower than other businesses, while SG&A costs as a percentage of revenue have remained high (10.5%) over the last five years. Now, more than ever, distributors must look to the future and adapt to a new way of doing business to remain profitable.

Traditional distributors are flying blind

Distribution in emerging markets has remained the same for years; other than some basic technology interventions to track sales, very little has changed. In many markets, distributors still manually order products from FMCGs, hold stock till retailers make manual orders, deliver the orders via van sales, and collect cash payments – an extremely inefficient model. Unfortunately, this ineffective model provides little to no insight into the distribution chain, with distributors lacking an overview of their business performance, productivity, and growth – areas where their modern competitors excel.

The pandemic proved that companies which embrace the digital revolution are more resilient than those that do not. Amazon, the world’s leading digital distributor, almost doubled its sales in a single month at the height of the COVID-19 crisis due to years of investing in digital selling and analytics. While traditional distributors do not have the same resources as Amazon, there is one thing they have in common: treasure troves of transaction data across products, brands, and consumers that can help anticipate consumer needs and create new strategies to match market demand.  However, without a system in place to capture and utilize these valuable transaction data points, traditional distributors are flying blind, unable to unlock productivity in inventory planning, reduce warehouse costs, or save on delivery costs.

Digital-first distributors will continue to offer capabilities that traditional distribution cannot match, as e-commerce and online retail do in B2B what they have accomplished in the consumer world – personalized, data-driven processes that create an addictive experience. To compete favourably and remain profitable, distributors in emerging markets must rewrite the rules of traditional distribution and undergo radical restructuring driven by digital ecosystems and market networks that enable hybrid forms of cooperation and competition.

Digitalized distribution is the future

Today, distributors are under immense pressure as the balance of power shifts to brands and retailers, leading to reduced margins over the years. Major FMCG brands underperformed the market in recent years and are beginning to finetune their distribution model by embracing direct distribution, reducing gross margins, and increasing the costs transferred to distributors. Larger wholesalers and retailers also have more bargaining power and are negotiating for increased trade spend while developing higher-margin private-label products - leading to reduced margins for distributors.

The only way out is for distributors to digitalize their distribution chain and gain access to the deep data insights that are inaccessible under the manual distribution model. This new digitalized chain provides distributors with:

  • Increased visibility: By capturing the data generated from each transaction, distributors have in-depth insights into the entire chain and can take advantage of the micro-consumption patterns to make strategic decisions on where to sell their products.
  • Increased market capillarity: With synchronized geoanalytics data, distributors can identify high-demand areas and increase supply to retailers in those areas, taking advantage of growth opportunities to increase order volume.
  • Reduced out-of-stock situations: $1 trillion is lost at POS every year due to products being out of stock. With granular data insights from multiple data points, distributors can identify inventory levels in real-time and ensure stock availability to retailers, leading to shorter lead times on orders and reduced inventory costs.
  • Improved order velocity: With distributors and retailers connected digitally, lead time on orders can be reduced from weeks to days. Distributors can also drive retailer engagement, increase order velocity and volume with targeted digital communications.
  • Reduced cash payments: By digitalizing the distribution chain, distributors can easily accept and process digital payments, eliminating the huge costs of processing cash. Cash payments cost FMCGs and distributors in emerging markets up to 16% of total revenue, with some brands spending upwards of $5 million every year on cash processing and reconciliation.

With real-time visibility across the value chain, distributors can finally step into the future and compete in the digital economy. However, adopting a digital distribution model can be challenging, especially for traditional distributors who currently operate through linear value chains, which is why you need a framework that seamlessly brings all the components of the digital distribution chain together.

Take your distribution digital with RedCloud

RedCloud is the world’s first integrated open commerce platform built to unlock the full value of the distribution chain by providing distributors with deep data insights and real-time visibility across the entire value chain.

The COVID-19 crisis has demonstrated how vulnerable the traditional distribution chain is, as many distributors could not anticipate rapidly changing demand patterns or supply-chain disruptions. Preparing for the future will require building digitally enabled distribution chains that harness real-time market insights, advanced analytics, and digital payments to deliver significant benefits, and RedCloud does this in 3 major ways:

  • Sell smarter: RedCloud allows distributors to increase ROI and remain profitable by increasing sales velocity and order flow. Our proprietary open commerce platform provides in-depth granular data insights syndicated across the entire value chain, which allows you to identify underserved geolocations and increase distribution to those areas, effectively increasing sales volume and growing your revenue by up to 10%.
  • Buy better: RedCloud puts the power is back in your hands by increasing market penetration and expanding your reach. You can reach even more retailers in real-time, allowing you make better decisions on which products to carry and negotiate for better margins based on actual consumption data
  • Pay simpler: RedCloud solves the cash problem with an integrated payment platform that empowers distributors to make digital payments to brands and accept the same from retailers. Our platform also allows merchants to sell digital products to their customers, which helps overcome the biggest challenge in digitizing payments in emerging markets - merchant adoption.

The future of distribution is digital, and only those who are proactive enough to take bold steps will be the winners of the new digital commerce economy. This is the RedCloud advantage, a better, more efficient way of doing business for the traditional distribution sector.

Partner with RedCloud today to build the future of distribution and increase your revenue by up to 25%*

*Statistics based on research from Oliver Wyman.

Eliminating friction along the distribution chain in the FMCG industry

The distribution chain is the heart of the FMCG industry, keeping retailers’ shelves stocked and end consumers satisfied. For decades, FMCG brands in emerging markets have operated through a traditional distribution model dependent on a manually connected network of intermediaries to move products from the manufacturers to end consumers. However, the pandemic has tested the ingenuity, resilience, and flexibility of this distribution model and found it wanting as brands and distributors have been unable to keep up with rapidly shifting demand patterns and consumer behavior.

To maximize the $30 trillion growth opportunity that exists in emerging markets, brands must fundamentally revisit their distribution models and transform themselves. If they stay with the traditional, manual model of distribution that relies on van sales and cash sales, they will struggle.

Friction in the distribution chain is fatal.

Fundamental changes in consumer behavior, and the limitations of traditional distribution model are knocking brands and distributors off-balance, leading to significant friction in the value chain such as:

·      Lack of visibility: Under the current distribution model, data is still very fragmented, and visibility is dependent on stakeholders providing information manually. Therefore, brands and distributors are essentially flying blind, unable to identify rapidly shifting demand patterns or make strategic data-driven decisions in real-time. This leaves sales teams unable to meet their targets as growth opportunities are left untapped and market share is lost.

  • High SG&A costs due to manual operations and cash payments: Many FMCG brands and distributors spend up to 25% of revenue on SG&A costs due to an inefficient model that requires sales reps to spend countless hours on manual data collection efforts, reducing time spent on valuable, revenue-generating tasks. Cash payments are one of the biggest barriers to doing business in emerging markets as cash processing and reconciliation costs brands and distributors between 2% and 9% in revenue annually.
  • Lack of communication and engagement with retailers: Van sales are commonplace in emerging markets, an inefficient distribution model in which there is very little communication across stakeholders in the traditional chain, leading to low sales velocity and longer lead times between orders.

These challenges underscore the need for FMCGs to accelerate the adoption of digital distribution and value chain transformation to outmaneuver uncertainty and maximize existing growth opportunities.

Eliminate distribution chain friction with RedCloud.

The traditional distribution model is no longer enough in today’s competitive retail market, with reports showing that 75% of the largest FMCG brands have had negative or strongly negative impacts on their businesses due to distribution chain disruptions, and plan to downgrade their growth outlooks. In contrast, e-commerce and smaller brands that employ digital distribution models have experienced significant growth as consumers in emerging markets made the greatest shift to e-commerce and digital commerce, and United Nations Conference on Trade and Development (UNCTAD) reporting that digital commerce’s share of retail trade grew from 14% in 2019 to 17% in 2020.

Eliminating friction by digitalizing the distribution chain requires stakeholders to build sufficient flexibility by leveraging a technology-led platform that connects the entire value chain and supports applied analytics to provide in-depth insights at POS. This is what RedCloud, the world’s first open commerce platform provides – an innovative platform that transforms existing industry interactions into potential data points and placing valuable data insights at your fingertips.

RedCloud eliminates the friction in the distribution chain by:

  • Providing in-depth insights: By connecting FMCG brands, distributors, and retailers, we unlock the full value of the distribution chain, providing real-time data across the entire value chain and empowering brands and distributors to make strategic decisions to increase revenue and drive growth.
  • Increasing efficiency and reducing costs: Up to one-third of sales tasks can be automated, and with RedCloud automating the data collection process, sales teams become more efficient, and can spend more time on generating new sales opportunities, leading to a sales uplift potential of up to 10%.
  • Providing instant and automated communication to drive engagement: Personalized, targeted marketing campaigns can increase revenue by up to 15%. Our proprietary platform allows you personalize and automate communications with retailers to drive engagement and increase order velocity.

To learn more about how our proprietary platform is eliminating distribution chain friction and driving revenue growth by up to 25%, schedule a demo today.

Drive digital transformation to scale up

For decades, strong brands and product innovations were the recipe for success in the consumer goods industry. More recently, tried-and-true traditional distribution models in emerging markets accounted for three-quarters of revenue growth, but a new era has since dawned that requires a new strategy.

Large FMCG brands and distributors now recognize the need to embrace digitalization, as it speeds up and shifts the market, with 60 percent of CEOs surveyed saying they plan to transform their organization within the next few years. The reasons for this are obvious, as online providers in the CPG industry recorded 34 percent growth in the past six years, while conventional companies barely grew by 0.4 percent. The smallest outfits in the industry currently benefit the most from digital marketing and digital distribution channels, accounting for over half of industry growth.

However, to digitally transform their companies, FMCG industry leaders must embrace a new breed of transformation to build a sustainable competitive advantage while avoiding common mistakes that companies often make when attempting to lead transformation initiatives.

Most FMCG digital transformation initiatives will eventually fail

FMCG brands and distributors realize the need to digitally transform their companies, as 38 percent of industry leaders say they aspire to generate 50 percent or more revenue within the next few years from digital technologies and services, which is 40 percent higher than the present number. Two-thirds of companies also state that they expect the digitization of core business processes will be (or is already) essential to maintaining economic viability.

Digital transformation can unlock significant value when rightly implemented. However, this is not an easy task, as there have only been a few successful cases of digital transformation and many notable failures from otherwise high-performing companies. Research shows that 70% of digital transformation initiatives fail to reach their stated goals due to a lack of employee engagement, inadequate support from management, poor cross-functional collaboration, lack of accountability. Furthermore, sustaining the impact of a transformation initiative requires a major company-wide mind and behavior shift – something that only a few leaders know how to achieve.

Only a holistic approach can lead to successful digital transformation

While digitization is inevitable, business leaders need to accelerate the rate and scale of transformation as only 8 percent of company leaders say their current business model will remain economically viable if the industry keeps digitizing at its current course and speed.

Successful digital transformation programs will require business leaders to embrace the idea of holistic change in how the business operates as traditional transformation approaches deliver sub-optimal results. To deliver extraordinary change that builds sustainable competitive advantage, brands and distributors in the FMCG industry must see digital transformation as a business-model transformation that cuts across all parts of the business, including the sales and marketing processes, route-to-market, and distribution chain model. This is the only way to remain relevant in the digital economy and take advantage of the enormous growth opportunity in emerging markets.

Another key learning point for FMCG brands and distributors is that digital is transforming industries into ecosystems, upending the fundamentals of supply and demand. A McKinsey study shows that digital ecosystems could account for more than $60 trillion in revenues by 2025, which is more than 30% of global corporate revenues. Businesses that successfully adopt digitalization will have the scale to reach a nearly limitless retailer base, and benefit from frictionless distribution chains. The rise of digital platforms that allow industry players move easily across market borders is disrupting the traditionally manual distribution model with the key benefit of aggregating incredible amounts of data from distributors, wholesalers, and retailers to generate detailed, data-driven insights.

To successfully drive digital transformation, companies must strive to establish key digital infrastructure made up of people, processes, and tools that enable the successful execution and sustainability of results as opposed to cost-cutting or short term, tactical improvements as the main compass for change.

Drive digital transformation and increase distribution chain visibility with RedCloud

Digital transformation has the power to directly affect sales and increase revenue, with a Nielson study showing that 60 percent of FMCG sales can be affected at the store level. Unfortunately, large FMCG brands and distributors have only 20 percent visibility into their distribution chain, and virtually none at POS, as opposed to the 90 percent visibility needed to address key points of volatility where costs and revenues are at risk, such as out of stock situations at retailers’ which causes an annual loss of $1 trillion.

According to an IBM C-suite study, 84% of distribution chain officers have stated that a lack of visibility across the distribution chain is the biggest challenge they face, which has to led to inefficiency and waste. Digitizing the distribution chain will save FMCG manufacturers and distributors significant resources, reduce wastage and increase revenues.

RedCloud is the world’s first integrated commerce system that unlocks the value of the distribution chain, leveraging on existing industry relationships to connect manufactures, distributors, and retailers digitally. Our proprietary solution enables the real-time data capture and integration delivering end-to-end visibility across the value chain. Brands and distributors can see in real-time, which of their products are in highest demand, where the demand for their products is, who is buying the products, and why sales are increasing or decreasing.

With syndicated geoanalytics data, sales teams can adjust inventory allocation to the areas of high demand to maximize growth opportunities while marketing teams can implement targeted, automated communications to drive retailer engagement and increase order velocity. RedCloud is the partner you need to digitally transform your distribution chain from a manual, inefficient model into a hybrid, agile digitalized model that delivers up to 25% increase in revenue*.

Schedule a demo today to see how RedCloud is transforming the FMCG industry and empowering over 1 billion merchants in emerging markets by connecting them to the digital economy.

*Statistic based on research conducted by Oliver Wyman.

Lack of merchant engagement is costing FMCGs billions in lost sales opportunities.

To maintain competitive advantage, drive growth and capture market share, marketing leaders of large brands must devise new strategies to engage merchants directly and increase visibility at POS.

Lack of direct merchant engagement is hurting FMCG brands

The fragmented nature of the traditional FMCG distribution chain leaves marketing teams unable to engage directly with merchants. Manual communication and data collation methods means marketers can only reach and engage large distributors and tier 1 retailers, leaving tier 2 and 3 retailers with sub-optimal engagement levels. However, the insights required to make data—driven decisions such as:

·      which products are in high demand?

·      where, geographically, the demand for their products is?

·      what types of retailers are buying their products?

·      which of their marketing campaigns are working?

Are only accessible when marketers can engage directly with smallest retailers and have insights to real-time data collated at POS.

The inability of marketing teams to engage their merchant network directly across multiple channels leads to lower sales, with industry reports showing that marketers that use 3 or more channels to drive campaigns had a 287 percent higher purchase rate than those using a single-channel campaign.

Without direct merchant engagement, marketers are also unable to react to rapidly changing demand patterns as there is no real-time visibility into consumer behavior. This leads to loss of market share to nimble, digital-first startups that can authentically target and engage tight segments to win over channel partners.

Increase visibility and drive engagement with RedCloud

Syndicated data and direct merchant engagement allow marketers leverage on existing demand to upsell, and cross-sell their products with personalized campaigns, with studies showing that personalization, when executed well, can increase retailer satisfaction by over 600%. For example, if an FMCG brand discovers an increase in demand for one of their products, (say baby food), this valuable insight provides a great opportunity to target that specific retailer segment with a personalized campaign for a related product, say baby diapers to increase the average order volume and value and drive sales.

Increasing direct merchant engagement leads to improved brand loyalty and retailer retention, which increases revenue as a 5 percent increase in retailer retention can increase revenue by over 25% and the top 10 percent loyal customers have an lifetime value worth over 6 times the industry average.

To increase direct merchant engagement, FMCG marketers need a solution that provides access to real-time, actionable data collated at POS while also enabling direct engagement with all the merchants in the distribution chain. While many FMCGs have attempted to launch digital platform or apps to engage with retailers, adoption remains low as retailers do not want to engage with multiple apps from multiple brands.

This is where RedCloud, the world’s first open commerce platform excels. We unlock the full value of the traditional distribution chain, directly connecting FMCG brands, distributors, and retailers on a single platform that preserves industry connections while providing powerful digital capabilities. With brands and their merchants on the same platform, marketing teams have real-time visibility across the value chain, and can access collated data at POS. In addition, the open commerce platform allows marketers directly engage merchants with personalized, targeted campaigns that take advantage of the micro-consumption patterns in the market to increase sales velocity and order volume.

In my next blog, I’ll explore how marketers can increase app adoption to further enhance merchant engagement, increase customer retention and generate brand loyalty.

Driving growth with digital sales communication

Every day, sales representatives in FMCG companies are responsible for developing and sustaining long-lasting relationships with distributors and retailers to ensure orders are filled and sales targets are met. In emerging markets, however, much of this communication is manual, as sales reps must visit retailer stores to interact with merchants and gather feedback.

Even though many FMCG brands recognize the need to digitalize their business, digitization of the sales communication and customer interaction process does not receive much attention.  A Google survey of over 2700 B2B sales managers found that many top sales leaders underestimate the strategic importance of digitalizing sales interactions.  

FMCG brands must now answer the question of how to reach customers quicker via digital channels and respond to their requests in real-time as research shows that sales leaders that effectively implement digital transformation drive five times more revenue growth than their peers who do not.

Manual communication is limiting your sales force and costing you sales.

The manual communication methods used by sales teams in emerging markets are slow and ineffective, and risk losing sales as lack of real-time communication is by far, the biggest frustration for FMCG customers. 30% of B2B buyers surveyed say they prefer to buy from distributors because manufacturers’ sales reps took too long to respond to their requests.

Digitization has made providing consistent, high quality customer interactions a competitive differentiator, irrespective of the sales channel, and FMCG companies need to adjust to this reality. Without digital means of communicating with their customers, sales teams do not have access to raw POS data, or the visibility needed to manage sales profitably and accurately determine the most effective ways to allocate sales resources.

B2B brands that are unable to replicate the convenient and personalized customer experience offered in the B2C industry are already losing to non-traditional players that can. E-commerce giants like Amazon, and smaller digital-first brands are already cashing in on this trend by providing their customers with simple and convenient digital platforms to make commerce easier and faster.

Digitalizing sales communication is key to driving sales growth.

Digitization is a decisive factor for driving sales growth in the long term as it enables brands improve communication with distributors and retailers to gain line of sight across the distribution chain and gather vital information about consumer behavior and purchase decisions. Companies that successfully digitally transform their sales processes and implement digital sales communication generate five times more CAGR and 8% more shareholder returns than companies that do not.

On the other hand, brands that fail to make the switch to digital communication will find their market share taken over by smaller, digital-savvy brands that directly engage merchants through multiple digital channels. Statistics show that the smallest brands now account for over 53% of FMCG sales growth, and e-commerce’s share of retail trade has grown to 17% - showing that the future of sales communication is indeed digital.

Fortunately, all is not lost, as industry reports shows that B2B customers desire a combination of great digital interactions and the human touch – a field that FMCG brands have excelled at for decades. Sales leaders must employ fresh, out-of-the box thinking to combine digital platforms with the existing relationships in their distribution networks to increase visibility across the distribution chain and empower sales reps to make targeted, data-driven decisions based on real-time feedback gotten from all merchants.

This is RedCloud’s mission – a highly efficient, digitalized distribution chain that connects FMCG brands directly to every single distributor and merchant across the value chain. We have achieved this by building the world’s first digital open commerce platform that allows sales team gain real-time insights into the entire distribution chain. For the first time, sales teams have line-of-sight to the smallest merchant and can access actionable data at POS. In addition, you can directly segment customers and communicate with specific merchants to cross-sell, and up-sell your products, which can yield up to 60 percent higher revenue.

Schedule a demo today to see how RedCloud is revolutionizing the distribution chain and partnering with brands to increase revenue by up to 25%.

Reversing the Decline of the Distribution Industry

The distribution chain is the heart of the CPG industry, and at the center of that chain are distributors. Distributors are responsible for moving approximately $6 trillion in goods between manufacturers and consumers but have recently been struggling to remain profitable.

The global pandemic has only accelerated market trends that put more pressure on distributors. Slower economies mean reduced demand for distribution services, amplifying the forces that have eroded the margins of leading distributors over the last two decades. To remain competitive, it’s more crucial than ever that distributors learn how to adapt to the changing marketplace, and that starts from understanding the reasons for the decline of the distribution chain.

Examining the decline in the distribution industry

Given the important ‘middleman’ position that distributors occupy in the industry, you would expect them to benefit greatly from the relatively strong economic growth that has been seen in the past few years. Unfortunately, this is not the case as key metrics show that traditional distribution models have been challenged by the changing marketplace, eroding the financial health of distributors.

Looking at gross margins and EBITDA margins, we can see a decline over the past 5 years, which is worrisome as companies go through the economic effects of the pandemic with reduced margins.

Looking critically at the distribution industry, there are two major factors are responsible for its disruption.

The rise of price transparency

The first factor eroding the financial health of distributors is the rise of price transparency that allows customers to efficiently find the best deals, which contributes to the rapidly shifting consumer behavior. Traditionally, distributors have the impulse to do everything to gain and retain customers, and this often gets in the way of pursuing profitable growth. For example, when surveyed, customers say that the most important value a distributor provides is a wide array of products and services, and the price is only the third-most important attribute. However, when making major purchase decisions, even customers agreed that price is the most important factor they consider.

This contradiction is an example of the pressure that distributors face when trying to satisfy their customers. Customers are placing distributors under increased pressure to provide a wider assortment of products and services but at lower prices. As distributors try to meet these demands, their already shrinking margins are impacted even more.

The rise of e-commerce and omnichannel

As more become more comfortable with buying online, customer demand has shifted to ecommerce and true omni-channel experience. Customers now expect a seamless experience irrespective of where they interact with their distributor, whether it is full online, a hybrid of online ordering and physical pickups, or completely offline. E-commerce has also raised the standard for customer experience, providing multiple buying choices, real-time package tracking, 24/7 support and easy service interactions, and so on.

However, online distributors have lower operating costs than traditional distributors, which also puts pressure on prices and margins. The technology and infrastructural investments that traditional distributors need to put in place to compete with other e-commerce players puts even more pressure on EBITDA margins.

Fight back with digitalized distribution

To remain competitive, distributors need to adapt to the changing marketplace and become digitalized. By digitalizing their operations, distributors can provide a seamless experience to their customers, while providing competitive prices. Also, digitalizing the distribution chain means more insights into point of sales so that you can identify areas of high and low demand. This helps reduce inventory and potentially improve margins.

However, many distributors cannot build the entire IT infrastructure they need to properly connect the distribution network, which is where RedCloud comes in.

By partnering with RedCloud and our industry-leading commerce platform, you have valuable and actionable insight into the distribution chain. Distributors can see and respond to orders in real time, anticipating and responding to customer demand, reducing lead time and inventory cost.

RedCloud is enabling distributors to buy better, sell smarter, and pay simpler, so they can reduce inefficiencies and increase their margins.

Power is shifting - retailers and consumers are taking control from CPGs

Do you have the ammunition needed to take back control and maintain market share?

In recent times, changes in consumer behavior and the retail landscape have put increasing pressure on CPG companies. Today’s customers have veered from the traditional linear path-to-purchase that CPG companies controlled. Brand loyalty is also waning now that customers interact with multiple channels along the purchasing journey and price plays a more critical role in buying decisions, as customers can compare prices easily. All these factors mean that CPGs are facing more uncertainty than ever on the rate of consumer spending on their products.

Retailers are also increasingly focusing on white-label products as they try to increase their bargaining power with popular FMCGs. They are changing their product ranges and adding more products to their shelves to differentiate themselves from other retailers. These factors, combined with varying input prices, means manufacturers are now faced with the challenges of growing their margins, winning the price war for consumers, and getting their products on the retailer’s shelves.

All these trends make one thing clear; power is shifting from CPG companies to retailers and consumers, and pressure is mounting on marketing teams to figure out innovative strategies to retain their market share and drive month-on-month growth. CPG’s need to engage more with their customers, for them to engage directly with their buyers they need more robust analytics capabilities that will make it easier to define buyer specific campaigns.

For marketing teams to increase the ROI and meet their monthly and yearly targets, they need access to first-class data analytics tools and processes. In many cases, marketing teams are limited to manual methods of tracking their success and have almost no visibility at the point-of-sale, one of the most critical points on the distribution chain. While some brands have made some efforts to adopt digital tools to increase their visibility, these tools are usually limited in scope.

Increase data analytics capabilities with RedCloud

This is why there is RedCloud. RedCloud is the CPG industry’s first digital ecosystem that connects brands, distributors, and retailers on a single platform, unlocking the full value of the traditional distribution chain. With RedCloud, brands have visibility across the entire distribution chain and can derive insights at point-of-sale. Marketers can make smarter decisions on their trade marketing campaigns based on real-time data, while also identifying new opportunities for up-selling and cross-selling their products.

RedCloud is helping the CPG industry sell smarter, buy better, and pay simpler.

COVID-19 recedes top African brands’ value by $5.5 billion.

The COVID-19 pandemic has had significant effects on top brands in emerging markets, wiping out 12 percent of brand value, or $5.5 billion from Africa’s largest brands between 2020 and 2021. FMCG brands, especially food and beverage manufacturers were some of the hardest hit, as their route-to-market has been severely hampered. Lockdowns, social distancing, and other restrictions have introduced a new complication in markets that already had low visibility across the value chain due to data limitations, fragmented front ends and last mile execution issues.

However, there is hope on the horizon, as emerging markets offer enormous growth opportunities that large FMCGs can maximize on. Household consumption across Africa is predicted to grow at 5 percent per year in real terms to reach $2.5 trillion in 2030.

As the crisis recedes, there will be a dramatic change in the shape of demand at the front line and how brands respond to that demand, as the pandemic has significantly disrupted traditional sales and marketing activities. While there are many unknowns ahead, one certainty is that route-to-market (RTM) approaches must fundamentally change.

Understanding traditional route-to-market challenges in emerging markets

Africa is more than just another emerging market opportunity. It is an incredibly complex continent comprising of over 50 markets – each socially, culturally, and economically unique. The logistics alone are daunting, not to mind the intricacies of multiple operating models, distribution networks and marketing strategies that must be applied to unique markets. This complexity can be overwhelming for many FMCG brands due to the numerous route-to-market challenges they face.

The consumption patterns in Africa differ greatly from other emerging markets, influenced as much by local culture and consumer preference, as it is by economics and market sophistication. For example, while Moroccans prefer to purchase tea and coffee in traditional markets, Kenyans and Nigerians buy most of theirs at supermarkets. Ethiopians on the other hand, buy almost all of theirs at kiosks. To set up the right RTM and successfully expand into new markets, brands must understand how their product is consumed by different consumer segments and in different markets.

Lack of actionable data is also a major challenge to driving growth in the emerging African market. Accessing, compiling, and analyzing market data is like solving a mystery as sales and marketing teams are left in the dark, with no visibility into where the demand for their products is, or who is buying them.

These challenges make the traditional route-to-market weak, as customers are unable to see and interact with the brands when and where they need it. To recover lost ground and expand to new markets, African brands must embrace digital technologies to transform their go-to-market strategies.

Digital route-to-market transformation is vital for driving growth

African brands today face a compelling opportunity to innovate their traditional route-to-market channels and models as they attempt to recover from pandemic-induced losses. The simultaneous rise of digital commerce, powerful digital players, and millennials as the dominant customer segment is disrupting the sector and changing the way FMCG brands need to go to market.

Despite this opportunity, many brands are unsure of how to proceed with digital RTM transformation, or are focused on the wrong initiatives, resulting in halting action and a failure to build significant value. A McKinsey study of the management practices related to digital strategy and capabilities that correlate most strongly with growth and profitability shows that many B2B companies, which include FMCGs, trial consumer companies in terms of overall digital maturity.

This is a massive opportunity missed, as the study shows that companies which move quickly and decisively to digitally transform their go-to-market strategies generate 3.5 percent more revenue and are 15 percent more profitable than their industry peers. They have also been able to capture 10 percent or more of incremental growth and have expanded margins by 5 points or more.

To achieve digital route to market transformation, African brands must reimagine their sales and marketing processes and answer some crucial questions:

  • Are these activities really needed?
  • Is there a way to digitalize them so they become more efficient and effective?
  • Can existing solutions or partners help with the reimagination process?

FMCGs across Africa must also rethink their distribution model, as there are many inefficiencies in the way products are distributed, often related to order-taking and payments at the fragmented front-end.

The rise of B2B e-commerce players in emerging markets has shown how technology can make distribution more efficient for brands, distributors and retailers, hence companies must focus on developing tech-enabled sales and distribution models to accelerate robust growth and expansion in emerging markets.

Drive market expansion with RedCloud

To successfully drive digital RTM transformation, FMCG brands need a solution that solves the problem of the traditional route-to-market. They need a solution that provides:

  • access to valuable market data in real-time.
  • in-depth visibility into micro consumption patterns across multiple geolocations.
  • customer segmentation and targeted marketing communications to drive engagement and increase order frequency.

RedCloud is the world’s first open commerce platform that unlocks the traditional distribution chain, empowering brands to digitally transform their route to market and drive growth. With RedCloud, sales and marketing teams can collect valuable data at POS and gain much-needed insights into the consumption patterns and geographical demand of their products.  The inbuilt market intelligent tool also allows marketers to better manage their campaigns, and create targeted promotions aimed at specific customer segments, leading to greater ROI on marketing spend, more sales and increased revenue.  

Schedule a demo today to see how RedCloud is partnering with FMCGs around Africa and empowering them to sell smarter, buy better, and pay simpler.

Increase customer lifetime value with targeted merchant rewards

As competition in the FMCG industry intensifies, understanding and maximizing the customer lifetime value (CLV) of each distributor or retailer has become an important way to boost business profit. B2B businesses are now investing billions of dollars into increasing customer lifetime value through loyalty programs, trade marketing, and other rewards that improve customer relationships. In fact, customer relationship management software is the largest and fastest growing enterprise software market and is expected to double in size to $80 billion within the next 5 years.

To actively increase customer lifetime value, FMCG marketing leaders in emerging markets must adopt an integrated approach by leveraging digital technology systems to improve loyalty among their most important channel partners and drive economic growth in the long term.

Lack of visibility leads to wasted trade spend

FMCG marketers have long used trade promotions, loyalty schemes and merchant rewards to increase their customer lifetime value. CPG companies worldwide invest 20% of annual revenue in trade promotions, however, available data shows that 59 percent of these investments are wasted. Conversely, the best promotions were 5 times as successful as the least efficient promotions, and a 10% improvement in the share of wallet captured from high-value customers can increase market capitalization by an average of 12 percent, showing that trade promotions are effective, many marketers are just not doing it right.

There is clearly a huge opportunity for FMCG brands to improve the ROI on their trade promotions spend, yet many marketers cannot maximize this opportunity, as there is lack of data visibility across the distribution chain. The traditional FMCG distribution chain leaves marketers in the dark, lacking insights into:

·      Who is buying from them?

·      What their customers are buying?

·      Why there is a change in the demand for their products?

Without end-to-end visibility across the distribution chain and access to actionable data collated at POS, CMOs are stuck targeting the same set of customers with generic and largely ineffective promotions and are unable to accurately segment their audience to account for new buying habits and preferences.

The pressure continues to mount for marketing leaders as the demand for FMCG brands and products via traditional channels have slowed in recent years, especially in canned goods, food & beverage, and laundry categories. This slowdown is driven by huge shifts to non-traditional channels like e-commerce, where smaller, digitally enabled brands can provide precisely targeted promotions and loyalty schemes that increase engagement and drives sales.

Data analytics is key to creating successful targeted promotions

To increase CLV and drive long-term growth, FMCG brands need an advanced data analytics solution that provides granular insights into customer behavior and segments customers based on multiple criteria, leading to higher returns on promotional investments. Studies show that 30 percent of FMCG leaders already consider trade-promotion optimization through advanced data analytics their number one priority. The primary question for brands is how to make it happen.

First, marketers must build an ecosystem of supporting data with a data analytics solution that captures real-time actionable data at POS across the distribution chain to provide a granular view of buying habits and history. This would be a major win for both FMCGs and retailers, as brands that adopt granular data analytics tools to optimize promotions achieve sales growth and top-line growth that outpaces the inflation of trade investments while retailers experience increase in operating margins by up to 60 percent through efficient promotions.

Analyzing the data on CPG promotions shows that volume-based promotions do not entice retailers who buy infrequently in a particular category to purchase more, rather, they subsidize retailers who are already loyal to the brand.  However, promotions focused on smaller package sizes in regions of low brand market share attracted retailers who were not loyal to any manufacturer and enticed infrequent retailers to buy more from the brand. Insights like this are invaluable for FMCG marketers in emerging markets and are key to increasing market share while driving long term growth.

Increase customer lifetime value with RedCloud

RedCloud, the world’s first open commerce platform provides FMCG brands, distributors, and retailers with real-time, actionable data collated at POS and syndicated across the traditionally fragmented distribution chain, enabling marketing leaders to:

  • Drive customer lifetime value through deep analytics: By transforming every industry connection into a potential data point and integrating the massive amounts of data generated, RedCloud provides you with a 360-degree view of your customers and enables you to make data-driven decisions proven to increase CLV.
  • Optimize loyalty programs and merchant rewards: Leveraging on the in-depth insights RedCloud provides, you can build integrated, cross-functional promotions to target specific customer segments and generate outsized ROI on trade investments.
  • Implement front-line transformational change: With insights into customer buying patterns, FMCG marketers and sales reps at the front lines can translate these insights into action, taking advantage of the micro-consumption patterns in the market to cross-sell or upsell their products, increasing revenue by up to 60 percent.

Schedule a demo today to see how RedCloud is partnering with FMCGs across Africa and Latin America to drive growth and increase sales by up to 25 percent.

Fighting for control: The rise of private label in the FMCG industry

Early in the COVID-19 crisis, many large FMCG brands disappeared from stores due to panic buying and pantry loading, leading to many shoppers opting to buy private-label goods, and have continued to do so. Private label products have experienced rapid growth in the last few years, especially in emerging markets like South Africa, which reported a startling double-digit growth of 27.2 percent between March 2019 and March 2020. On the other hand, major FMCG brands experienced slow revenue growth of 1.0 percent in the CPG industry, with their market share falling by 0.6 points to 46.6 percent, while private labels and the smallest manufacturers increased their market share to 15.6 percent and 9.7 percent, respectively.

To compete favorably, larger FMCG companies need a new playbook to prevail over smaller, nimbler opponents.

Why private labeled products are on the rise

In the last few decades, large FMCGs strengthened their brands, expanded their portfolios, and created strong shareholder value in an era of big media, big retailers, and big brands. However, as recent as five years ago, smaller manufacturers began to take market share from large brands, a trend that has continued in both developed and emerging markets.

Here is a look into the factors driving the success of smaller brands and private labels:

Shifting consumer behavior and buying preferences

The pandemic revealed that consumers are quite willing to change their buying behavior, with customer surveys showing that 40% of customers have tried new products or brands since the start of the COVID-19 crisis. Much of this behavior was spurred by the affordability of private label brands, as customers continued to hunt for cheaper products due to the prolonged economic uncertainty.

The second-most cited reason by consumers for switching to private label brands was the unavailability of major brands as manufacturers struggled to meet rapid spikes in demand for their products.

Ease of coordination

Smaller FMCG brands can often act quicker and more creatively than their larger counterparts as they are focused and more efficient and do not bear the coordination and governance costs of large organizations. This agility and simplicity allow them to outmaneuver larger, siloed FMCG companies, ensure their products are readily available, competitively priced, and more attractive to retailers and consumers.

Expanded distribution options

Private labels have benefitted in the last few years and over the course of the pandemic, as they could manage their distribution chain and address stock shortages better than larger FMCG brands. While smaller manufacturers were previously limited to distributing their products through big retailers who carried both major brands and private labels, they can now distribute their products through multiple channels. The rise of modern trade and e-commerce now allows smaller brands to reach customers just as effectively as larger brands can, as shelf space is unlimited at online stores, and brands regardless of size, have the same visibility.  

These new, digital-enabled channels also provide small brands with access to data and insights that even large FMCG brands do not have. Smaller private label manufacturers can see who is buying their products via online retail channels, send campaigns and promotions tailored to specific customer segments, and track the success of said campaigns in real-time, an ability that many marketing leaders in large FMCGs currently lack.

The above-mentioned factors combine to make private labels more attractive to retailers, which has proven to be a problem for large FMCG brands as they continuously lose market share and brand value to these smaller brands. However, large brands can take back control by digitally transforming their supply chain to become more agile and resilient.

Take back control with Red Cloud

Conventional wisdom says that large FMCG brands have few options to combat the growth of small brands and that organic growth is over, but we disagree. While consumers’ tastes may have changed, their underlying needs and desires have not. FMCG brands must now:

  • Analyze demand rather than customers alone: By analyzing consumption across various geolocations rather than just customers, brands can derive valuable insights into the key demand drivers and what must be done to capture said demand. The data on this type of market segmentation shows that brands that can best meet critical customer needs will outperform alternatives in the market and reignite growth.
  • Improve engagement with channel partners: Large FMCG brands who have long been unable to effectively engage with distributors and retailers due to the fragmented distribution chain must now embrace digital tools that provide affordable personalization capabilities to engage and incentivize channel partners at scale. Personalized customer engagement across multiple channels can yield up to 287 percent higher purchase rates and increase retailer satisfaction by over 600%.

This is what RedCloud, the world’s first open commerce platform provides. With RedCloud, FMCG brands can now unlock the full power of their distribution network by connecting brands, distributors, and retailers on a single platform. FMCGs can also collate valuable, actionable data at POS from every merchant in their network, providing unprecedented visibility across the distribution chain.  RedCloud also analyses the data to provide easy-to-understand insights that sales and marketing leaders of large FMCG brands can leverage to understand their customers better, create targeted, retailer-specific promotions that drive sales, increase revenue, and win market share from private labels and smaller brands.

Schedule a demo today to discover how RedCloud is partnering with FMCGs across emerging markets, empowering them to sell smarter, buy better, and pay simpler.

Increasing app adoption rates with data-driven marketing.

While some leading organizations have succeeded and are driving over 40% of revenue with mobile, getting users to adopt and use their apps remains a challenge for many marketing leaders. Studies show that 25 percent of all app users abandon an app after just one use, leading to a significant loss of potential revenue. CMOs need careful planning and a new strategy to drive app adoption and increase retention rates to win on mobile.

Why FMCG mobile apps are failing to catch on.

Many FMCGs spend countless man-hours and financial resources developing apps to engage their customers and drive sales, but adoption rates remain abysmally low, with studies showing that 52 percent of all B2B apps lose half their peak users after just three months, and only 32 percent of users return to an app more than ten times after download.

Adoption rates of FMCG apps remain low because:

  • Users don’t need the app: Many FMCGs create mobile apps to solve the company’s needs, leaving the end-user as an after-thought. For example, many FMCGs develop mobile apps to digitize the ordering and payment process and eliminate the cost of cash handling. However, distributors and retailers see no need to use the app without an obvious user-focused value proposition, leading to low adoption rates.
  • Marketing leaders lack the data needed to drive engagement: Many FMCG apps focus on improved front-end UI/UX but do not collect enough data at the back end to provide sufficient visibility into user activity. Without this valuable data, app marketers cannot devise data-driven marketing strategies to engage users successfully.

Today’s B2B buyers expect the same level of digital experiences they encounter as consumers – experiences that FMCG apps cannot match due to the non-user-centered design and a lack of data visibility. Given that most smartphone users will spend 85 percent of their time on only five apps, most FMCG apps suffer low adoption rates and are eventually deleted.

Increase mobile app adoption rate with data-driven marketing

Increasing user adoption and retention is vital for FMCG brands as a Harvard Business School report shows that a 5 percent increase in retention can increase profits by 25 to 95 percent. To maximize the incredible opportunities mobile apps offer, FMCGs must first design their apps around the needs of the end-users. Rather than building the app to solve their brand’s challenges, product managers must put retailers, distributors, and end consumers at the center of their design, ensuring that the value proposition provides a compelling reason for users to engage with the app.

Marketers need a solution that tracks user action, aggregates the data, and displays it in an easy-to-understand format, enabling them to use the data that sits behind user activity to create user and action-specific campaigns and promotions to drive engagement. Unfortunately, the few mobile data capturing solutions available are costly and ineffective, as they do not provide a deep dive into actual user action and leave a wide gap in the data provided. The lack of a complete overview of users’ actions leaves marketers in the dark, unable to take data-driven action to increase engagement.

At RedCloud, we have succeeded at increasing and maintaining an engagement rate far above the industry average. We accomplished this by designing our merchant app with merchants in mind and incentivizing high adoption rates by enabling merchants to sell digital products and earn a commission on each transaction. Our integrated market intelligence tool is also built specifically for marketers and tracks individual user activity in real-time, providing a detailed overview of how users engage with the app. The tool also analyzes the data captured to provide intelligent, data-driven insights that you can leverage to create campaigns and promotions that drive merchant activity and increase retention.

RedCloud’s open commerce platform is the perfect solution for FMCGs looking to directly engage their merchants. Our upcoming marketplace  is optimized to deliver app adoption and engagement rates above the industry average, enabling merchants to buy better from distributors, and engage directly with top FMCG brands.. Replace your FMCG app with RedCloud’s open commerce platform today to better engage your merchants and distributors, increase sales, and drive sustainable growth.

Digitizing finance for all: Closing the $5 trillion MSME credit gap

In emerging markets today, over 2 billion people and 200 million businesses lack access to savings and credit, as they are excluded from the formal financial system. Transactions are exclusively in cash, and there is no access to credit beyond informal lenders and personal networks. There is a massive gap between the credit micro, small, and medium enterprises (MSME) need and the credit facilities available to them, with studies estimating this credit gap at approximately $5 trillion, or 1.3 times the current lending level.

Despite this enormous gap, MSMEs remain crucial to emerging economies, as two out of every three full-time jobs in developing economies are provided by SMEs. The informal sector also provides employment to over half of the labor force and is at least 35 percent of GDP.  Therefore, closing the credit gap and empowering MSMEs with access to credit is crucial to increasing GDP and driving economic growth.

Digital finance can close the credit gap and provide access to financial services for over 1.6 billion people in emerging economies, and provide over $2.7 trillion in new credit for MSMEs by 2025. The potential economic impact of digitizing financial services is enormous, though it varies significantly based on a country’s starting position. Lower-income countries can add 10 to 12 percent to their GDP by 2025, while middle-income countries can add up to 5 percent to their GDP by adopting digital financial services.

Close the credit gap with digitized payments

In developing economies, Individuals and businesses of all sizes overwhelmingly use cash, which makes up more than 90 percent of payment transactions by volume. This over-reliance on cash makes it difficult for financial service providers to gather the information needed to access the creditworthiness of potential borrowers, which further narrows the number of MSMEs that can access finance and credit.

Excessive cash payments also hurt both large and small companies in emerging markets, as the costs of handling cash become significant at scale. FMCGs and large distributors reportedly spend between 2 to 9 percent of their total revenue on managing and processing cash, while retailers and merchants lose 4.7 to 15.3 percent per transaction.

Digitizing payments is a transformational solution that can be implemented rapidly to reduce the credit gap as mobile phones and digital technologies continue to spread in emerging markets. Statistics show that 90 percent of adults in developing countries already have a mobile phone, and for small business owners in these economies, the mobile phone in the palm of their hands can redefine finance and be used to pay suppliers and distributors, accept customer payments, among many other use cases. Most importantly, adopting digital payments provides MSMEs with a data trail that can be assessed to provide credit history and collateralized to access advanced supply chain financing, loans, and other financial products.

However, despite the huge opportunity that digital payments seem to provide, getting individuals and small businesses to adopt it has not been easy. Digital financial service (DFS) providers have discovered that cash works well enough for most businesses in the informal sector; hence, adopting digital payments is not an attractive solution for MSMEs. To complete the digital transformation of payments in emerging markets, DFS providers must build platforms and products that put merchants first while addressing the financial, operational, and logistical pain points they experience daily.

RedCloud is closing the credit gap with the world’s first open commerce platform

RedCloud is helping close the MSME credit gap by building the world’s first open commerce platform. We remove the friction and the risk that is created by handling cash, speeding up the distribution process, and enabling merchants to trade directly with local and global brands.

RedCloud has also solved the problem of low merchant adoption rates by simplifying the logistics of digitalizing cash and providing incentives to drive user adoption and retention. We have partnered with hundreds of thousands of local cash deposit outlets and ATMs to enable merchants ‘upload’ their cash to the platform. With their cash digitalized, merchants can now connect and trade directly with national and global brands on the platform. We also provide instant access to digital products like phone credit, TV and Netflix subscriptions that can be sold in-store to their customers while earning a commission on each transaction.

As merchants use the open commerce platform to build up a trading profile, this data trail can be used to easily determine how their businesses are performing and allows financial services providers to offer affordable credit facilities - a safe and sustainable way to solve the $5 trillion credit gap.

Our CEO, Justin Floyd, says, “If we can bring merchants into the digital ecosystem and eradicate cash from the supply chain, there is potential to create a true ‘sell anywhere’ economy, where global and local brands can connect with any local merchant in any market. This can only happen if the commerce technology we build is open and accessible to all.”

RedCloud ‘s vision is to reinvent commerce and empower over a billion new merchants in the world’s fastest growing economies to serve the 5 billion new middle-class customers that will be created by 2025. Contact us today to discover how RedCloud is helping merchants in emerging economies grow their businesses by up to 40% by enabling them to buy better, sell smarter, and pay simpler.  

Decentralization and the future of commerce

Digital commerce has transformed the retail industry, with worldwide sales amounting to $4.28 trillion in 2020. The rise of e-commerce is disrupting traditional supply chains with the promise of enabling brands and sellers to reach more customers than ever. However,  e-commerce marketplaces like Amazon, JD.com, and Alibaba, which provide the greatest reach, are highly centralized and limit the growth of the brands who sell on their platform via heavy restrictions, algorithm changes, and price wars.

Digital commerce has transformed the retail industry, with worldwide sales amounting to $4.28 trillion in 2020. The rise of e-commerce is disrupting traditional supply chains with the promise of enabling brands and sellers to reach more customers than ever. However,  e-commerce marketplaces like Amazon, JD.com, and Alibaba, which provide the greatest reach, are highly centralized and limit the growth of the brands who sell on their platform via heavy restrictions, algorithm changes, and price wars.

Centralized platforms are killing commerce

The current e-commerce business model allows centralized platforms to exert undue control and act as gatekeepers with little or no oversight. Most e-commerce marketplaces require brands who sell on the platform to continually pay exorbitant fees, sometimes up to 30 percent on each sale to reach their ‘own’ customers – customers that do not belong to the brands but the marketplace.

Centralized platforms also limit the visibility of brands and sellers, preventing them from knowing who is buying their products and running targeted campaigns to drive sales to their store pages. Instead, sellers are stuck paying extra fees for marketing and advertising services they have no control over and cannot measure the ROI.  Brands and retailers are often forced to purchase warehousing and shipping services from the e-commerce platforms they sell on, as brands who buy these services are more likely to be chosen by the algorithm as the default seller of a product (known as winning the buy box), which is essential to generating sales.

These restrictions and extra costs eat into sellers’ already razor-thin margins, preventing them from growing their businesses or expanding into new markets. In the end, the platforms win, and brands lose. As more consumers switch to buying online, there is a need for a new business model in e-commerce, a decentralized model where brands and sellers ‘own’ their customers and can directly engage with them without competition or restriction from digital commerce platforms.

Decentralization and Open commerce – A match made in heaven

From challenge comes opportunity, and the rise of open commerce is changing the face of retail and commerce today, allowing new dynamics between brands, merchants, and consumers. The open commerce revolution is poised to disrupt commerce by decentralizing control and cutting out the middlemen, or “middle-platforms” who exploit their monopoly power over brands and sellers.

The open commerce business model provides unique advantages in commerce and the retail industry, such as:

  • Decentralized control on any platform, achieving consensus-based trust between brands, distributors, and merchants without undue restriction by a central authority.
  • Transparency on a fundamental level, as no brand or seller is artificially hidden from customers or prevented from selling by an algorithm.
  • FMCG brands, distributors, and merchants can connect directly, eliminating extra costs and layers of interaction along the supply chain.

Essentially, decentralized peer-to-peer connections on an open commerce platform gives power back to brands and sellers while also providing unprecedented visibility along the distribution chain. Unlike centralized commerce, where sellers are prevented from seeing who buys a product, open commerce platforms provide brands with access to valuable data at POS, enabling marketing and sales teams to monitor the micro-consumption patterns in the market and create marketing campaigns and trade promotions that drive sales and increases revenue.

Decentralized Finance, or DeFi, is a decentralized technology that is changing finance and commerce. DeFi can make transactions safer and faster, two factors that are invaluable to the success of digital commerce. By adopting this technology, businesses in emerging markets can share and securely store digital assets both automatically and manually while seamlessly handling customer activity such as payment processing, invoicing, record keeping, product purchases, and customer care – all of which are essential to increasing sales capillarity and driving customer satisfaction.

DeFi reduces the need for e-commerce stores to act as middlemen for every transaction and eliminates the need to go through the traditional banking system, a significant advantage in emerging markets where many merchants are unbanked yet have access to mobile phones and the internet.

By adopting a decentralized business model powered by open commerce platforms, the opportunities for brands and merchants to access a wider global consumer base is significantly enhanced and presents an opportunity for forward-thinking FMCG brands to tap into new and emerging markets.

Building a decentralized future with RedCloud

RedCloud is the world’s first open commerce platform, a decentralized solution that puts power in the hands of brands and merchants. For brands, RedCloud drives the digitalization of the supply chain by enabling any FMCG brand to onboard its sellers onto a platform that provides end-to-end visibility across the distribution chain without the control and restrictions of traditional e-commerce platforms. On the other hand, merchants who sign up to use RedCloud enter a digital ecosystem and gain direct access to global brands. This provides them with more products to sell locally at better prices and, given that many merchants are unbanked, the opportunity to build a digital trading profile for the first time.

Schedule a demo today to see how RedCloud is creating a decentralized ‘sell anywhere’ economy to help FMCG brands and sellers sell smarter, buy better, and pay simpler.

RedCloud is solving the data conundrum in the supply chain

A close look at each of the five V’s of data shows how RedCloud enables FMCG brands to benefit from each of them.

Volume

Volume forms the base of the data pyramid, as without sufficient data, any analysis will be meaningless. Generally, the more data you have, the better the analysis, provided that the data is meaningful, relevant, up-to-date, and actionable.  In many emerging markets, there is a clear disconnect between the FMCG manufacturers and their end retailers. Most manufacturers sell through a chain of distributors, and in most cases, this is the limit of their knowledge of the supply chain.

The RedCloud platform reconnects the full supply chain providing meaningful data from the end merchants and the distributors.  The FMCG’s actionable data expands from simply knowing what a couple of thousand distributors do to encompassing the complete spectrum of their tens of thousands of merchants, enabling a better understanding of the complete supply chain ecosystem.

Velocity

Velocity is perhaps more important than the volume of data.  Having the right data available at the right time is key.  The RedCloud platform provides near real-time data, allowing managers to visualise data in dashboards showing stock levels at their distributors, orders being taken, and which SKUs are currently performing the best.  Understanding demand across the supply chain allows can help prevent overstocking and better forecasting of when orders will be received from the distributors.

Variety

Data can come from many sources and in different forms. Data can be extracted from app usage, geolocation, feedback from marketing campaigns and other sources. The data collected by the RedCloud platform enables the FMCG producers to understand their markets and answer a wide range of questions.

  • Who are the end retailers?
  • Are they small informal stores, bars, restaurants etc.?
  • Where are they located? (State, City, Zip Code, Street Address.)
  • How often do they make transactions?
  • What is the average size of each transaction?
  • What products could cross-sell/upsell?
  • Is the number of merchants being serviced expanding at the distributor?

Veracity

Veracity in this context relates to quality. The data that is collected must be accurate and must be meaningful. It is too easy to capture vast amounts of data that is either inaccurate or unusable by the organisation. The data collected by the RedCloud platform is accurate, meaningful and can be leveraged to derive key data-driven business decisions.

Value

Value sits at the top of the data pyramid. With the ability to capture large amounts of data, it is vital to transform the data from its raw form into meaningful business actions that bring value to the organisation. This is where the RedCloud platform excels, unlocking the full value of the distribution chain.

The disconnect between the manufacturer and the end retailer can lead to overstocking, slow responses to market changes, and negatively impact revenue.  RedCloud addresses these issues by reconnecting the FMCG producers with their end retailers and providing reliable, accurate, meaningful, timely data to empower business decisions.

Building an automated sales and marketing engine for FMCGs

Drive transformation with an automated sales and marketing engine

In many FMCG companies, marketing and sales departments operate in their own silos, each having their separate organization, processes, and objectives, and is further complicated by a web of organizational complexity where sales units are structured around customer segments, products, or geolocations.

FMCG sales and marketing leaders must transform their sales and marketing processes, especially on how they engage retailers, use technology, and structure their teams. Whilst it can be difficult to change long-standing ways of working, the cost of resisting change grows higher. Brands that fail to co-operate closely and build an automated sales and marketing engine will misallocate resources, alienate their customers, and lose them to smaller, more agile brands who are deep-rooted in their communities and can directly engage with retailers. Large FMCG brands that get this transformation right, however, display impressive results, including a 15 to 30 percent improvement in marketing efficiency and a 20 to 50 percent higher ROI on marketing spend.

To digitally transform how their organizations work and build an automated sales and marketing engine, FMCGs must:

  • Invest in understanding how customers use digital: Many FMCGs think they know their customers well, when in fact they do not. Understanding how distributors, merchants and retailers use digital technologies is key to redefining how FMCG sales and marketing teams engage customers. To achieve this, companies must invest in technologies, data, and analytics that improve insights into buying behavior and help provide more relevant, personalized experiences that improve customer engagement and increase sales velocity.
  • Integrate technology and data across marketing and sales: Building the right digital solution that connects both marketing and sales teams and processes are critical. Many brands struggle to achieve this as marketing and sales technology platforms continue to grow rapidly. However, it is increasingly important to integrate all the components of sales and marketing such as sales CRM, marketing automation, and data analytics into a technology stack, so that the solution supports a well-executed, integrated go-to-market approach.
  • Integrate with channel partners: The traditional distribution chain leaves FMCGs competing with their channel partners and restricts valuable data from flowing through the chain. To succeed, brands must extend their digital systems and data to connect with distributors, retailers, and merchants to collaborate, not compete. For example, direct connection to merchants will allow sales and marketing teams to access valuable data at POS and receive direct feedback on the success of any campaigns or promotions.

The needs of merchants and retailers today are changing, and understanding this changing behavior, as well as the evolving role FMCG marketing and sales teams must play in the new digital economy is vital to designing a go-to-market approach that can capture market share and drive growth.

Build your sales and marketing engine with RedCloud

To successfully drive digital transformation, FMCGs need a solution that integrates data across the distribution chain while providing actionable insights that sales and marketing teams can leverage to drive sales. RedCloud has built the world’s first open commerce platform to unlock the full value of the distribution chain and enable cross-functional collaboration across FMCG sales and marketing teams.

For the first time, sales and marketing have equal access to syndicated data at POS that deliver insights into where the demand for products is and who is buying their products. With RedCloud, FMCGs gain a sales and marketing engine that integrates data across both departments. This results in increased sales-force efficiency by up to 15 percent, as less time is spent physically visiting merchants, and the time saved can be re-invested in revenue-generating activities. Marketing efficiency is also improved as FMCG marketers spend less time trying to understand the data available and more time leveraging the data to create targeted campaigns that drive sales and increase revenue.

Schedule a demo today to see how RedCloud is helping FMCGs increase revenue by up to 25 percent with an automated sales and marketing engine.

Recover lost sales opportunities with cash digitalization

Cash still remains the largest cause of friction in distribution chains across emerging markets, as less than one-third of the $13 trillion in payments between suppliers and retailers are made electronically.  This over-reliance on cash affects FMCG brands significantly and can lead to lost sales opportunities as many retailers return or cancel orders at the point of delivery due to the lack of cash at hand. Eliminating cash from the supply chain can potentially resolve this and lead to more sales opportunities but remains an enormous challenge.

Many of the cash digitization initiatives by FMCGs and large distributors have failed as they do not provide any significant value for most merchants, who find cash payments convenient. To solve the cash problem and recover lost sales opportunities, FMCGs need a solution that digitizes cash payments while also providing a powerful incentive for merchants and retailers to adopt the solution.

Cash payments are costing FMCGs more than money

Customers in developing economies rarely pay local merchants electronically, so most retailers prefer paying their suppliers in cash, which requires a high level of interaction between retailers and delivery staff and often results in multiple delivery attempts for a single order.  Fully or partially returned orders are lost sales opportunities for FMCG brands and lead to increased costs as well as higher inventory costs due to unproductive inventory in the delivery pipeline.

Cash payments also prevent FMCGs from gaining visibility at POS as it is virtually impossible to know who is buying their products in real-time, and sales teams must depend on data from field officers that are often inaccurate.

Many FMCGs have attempted to eliminate cash from their supply chains by creating their own apps but have failed due to low merchant adoption rates. Merchants do not want to adopt an app that only allows them to pay a single supplier, given that the largest supplier represents only 30 percent of the cost of goods sold by a typical small retailer. A stronger business case for retailers to adopt electronic payments is a solution that is easy to use and widely accepted by several suppliers.

Recover lost sales opportunities with RedCloud

Low levels of financial inclusion and high levels of mobile penetration in emerging markets provide an enormous opportunity for digital payments solutions that do not require merchants to have a bank account, such as mobile money and cash-in-cash-out operations.

RedCloud is solving the cash digitization problem in emerging markets with the world’s first open commerce platform. We have partnered with some of the biggest cash-in-cash-out operators in Africa and LATAM to enable merchants to digitize their cash easily. We also enable merchants to connect directly with global FMCG brands and pay directly on the platform without a bank account. This provides merchants with a compelling incentive to adopt the platform and is evident in our industry-leading app adoption and retention rates.

With RedCloud, FMCGs can significantly increase sales velocity by connecting directly with their merchants in any market to receive orders and get paid instantly. This eliminates orders cancelled by retailers due to lack of funds and saves up to 16 percent of lost revenue. High SG&A costs are also reduced as last-mile delivery becomes more efficient and demand-driven. In addition, merchants can build up a digital trading profile on the platform, which allows FMCGs to provide credit to their top-selling merchants and meet excess demand.

RedCloud is reinventing commerce and empowering players in the FMCG industry at every level to sell smarter, buy better, and pay simpler. Schedule a demo today to see how we are helping FMCGs in emerging markets recover lost sales opportunities and save up to 16% of revenue lost on returned and cancelled orders.

Why sales force automation is not enough

For decades, the traditional FMCG sales model in emerging markets has depended on manual sales activities, such as field officers physically visiting retailers and merchants. This leads to high sales costs of between 30 to 40 percent, as brands and distributors need thousands of sales reps to cover their territories and visit each merchant individually. However, the disruption caused by the global pandemic has severely impacted this model and revealed its inefficiency. The need to increase market reach and drive sales growth has caused FMCG sales leaders in developing markets to begin adopting digital solutions.

As a result, sales force automation (SFA) tools have been adopted as research indicates that up to a third of all sales tasks can be automated, and that automating sales tasks can lead to efficiency improvements of up to 15 percent and a sales uplift potential of up to 10 percent.

However, recent studies show that over 60 percent of companies who have made investments into digitally transforming their sales by adopting SFA tools have not achieved returns above the cost of capital. Many brands are stuck initiating pilot after pilot of SFA tools yet are unable to gain any significant visibility into their market, reduce sales costs or increase the efficiency of their sales force.

This leads to a critical question every FMCG sales leader must answer: Are SFA tools the best way to digitally transform FMCG sales?

Is Sales Force Automation the best digital sales solution?

Many of the SFA tools available simply allow sales teams to record their findings from merchant or distributor visits onto a mobile device. While this is an improvement over the manual pen-and-paper note-taking process that sales reps have used for years, they cannot solve many of the challenges that face FMCG brands in emerging markets today, which include:Many of the SFA tools available simply allow sales teams to record their findings from merchant or distributor visits onto a mobile device. While this is an improvement over the manual pen-and-paper note-taking process that sales reps have used for years, they cannot solve many of the challenges that face FMCG brands in emerging markets today, which include:

  • Costly sales operating model: Under the traditional sales model, sales reps are reduced to “order takers” who have to physically visit every store in a territory to collect merchant orders. This process is costly and ineffective at capturing variable demand and SFA tools do nothing to change it. This impacts margins and the effectiveness of capturing value.
  • Incomprehensible data: SFA tools capture very little useful data, as much of the feedback received is influenced by the sales rep visiting the store. In addition, the little data made available are often impossible to collate or process for any meaningful analysis and simply sit in spreadsheets. Without further processing and analysis, any data advantage that could be gained by automation is completely lost.
  • Lack of visibility at POS: SFA tools do not provide real-time syndicated POS data, leaving FMCGs unable to develop data-driven promotional strategies that increase sales velocity and drive revenue growth.

Large amounts of valuable data are generated daily across the supply chain, but brands cannot leverage it, and SFA tools do nothing to unlock that data. To increase sales velocity and capillarity, FMCG sales leaders need more than sales force automation – they need a solution that transforms the traditional sales process, reduces sales costs, and increases the efficiency of your sales force.

Increase your sales with RedCloud’s open commerce platform

RedCloud is the world’s first open commerce platform that completely transforms the traditional FMCG sales operating model by converting your sales team from an order-taking model to a true territory management data-driven sales model. The open commerce platform provides merchants with the ability to drive ordering directly through digital means, reducing need for sales teams to physically visit stores, whilst simultaneously empowering them to capture verifiable data and gain increased visibility across the distribution chain.

RedCloud empowers distributor and FMCG sales teams to understand the flow of goods and consumer demand and allows them to act through digital and physical means to stimulate that demand within their territory. For the first time, FMCG brands and distributors can connect directly with every single merchant along the distribution chain at the same time and capture valuable POS data in real-time.

With our solution, your sales force become more efficient, evolving from simple “order-takers” to data-intelligent territory managers who can leverage syndicated, real-time data analytics to drive sales growth across their geo-locations. The in-built marketing intelligence tool also provides sales leaders with timely insights into the expected shifts in demand for specific products across multiple geolocations and delivers actionable data that can be leveraged to devise data-driven strategies to take advantage of the micro-consumption patterns in the market.

Schedule a demo today to see how RedCloud is helping FMCG brands and distributors transform their sales process, reduce sales costs by up to 80 percent and increase revenue by up to 25 percent.

Leverage the cloud to drive FMCG growth

Brands and distributors in developing economies need to build deeper relationships with their retailers and merchants to effectively deal with an evolving market context and rapidly changing consumer behaviour as they can detect new market trends quicker and develop more agile business models by directly connecting with their customers. Developing these competencies are crucial, with research showing that even if small changes in consumer behaviours become permanent, the effects of these changes will reshape value chains and redistribute over $3 trillion worth of value to the brands that best anticipate the change.

Cloud technologies will play a key role in helping FMCG brands, and distributors drive growth, as the adoption of cloud-based digital and analytical technologies to provide data-driven decision making at scale, which will be the superpower that will provide leading brands and distributors with a competitive advantage. Analyzing top use cases and application areas of cloud technologies in the FMCG industry can potentially drive at least $490 billion in value creation by 2023.  In addition, adopting cloud-based technologies can provide a 6 to 10 percent boost in sales, an 18 to 30 percent reduction in marketing expenses and up to 18 percent improvement in ROI through proper customer segmentation.

However, brands and distributors must understand and commit to driving full cloud adoption to reap the benefits. Business leaders must treat cloud technology as a muscle to build, strengthen, and maintain to unlock potential value and drive growth.

How cloud technologies help drive FMCG growth

Many FMCG brands are stuck in the first phase of data migration as business leaders restrict the cloud to just an IT cost management solution, as it can generate up to 40 percent reduction in infrastructure costs. However, they are missing out on many significant benefits. When brands and distributors fully embrace cloud, they can:

  • Deepen customer relationships at a lower cost: Adopting cloud empowers FMCGs to build closer relationships with their customers and target them with customized marketing, increasing the ROI on marketing spend by up to 30 percent. In addition, cloud-based interfaces with retailers can help synchronize demand and supply, as well as reduce transaction friction associated with interacting with the smaller merchants and shops that are common in emerging markets.
  • Unlock growth with data-powered insights: Advanced analytics is a major driver for growth, as insights into customer decision patterns can boost sales while simultaneously reducing costs. Leveraging cloud-based data and analytics solutions help business leaders unlock new levels of visibility, create profitable promotions and even deploy predictive marketing at scale, which can potentially generate between $69 million and $144 million in value for the average FMCG brand.
  • Increase agility related to new market growth: Cloud technologies allow brands and distributors to deploy and scale advanced sales capabilities in new markets, channels, and geolocations. The deployment of cloud-powered exchange platforms enables brands and distributors to reconfigure their supply chains to embrace a broader array of small and local suppliers.

Unleashing the full power of cloud for growth and increased revenue only comes when brands and distributors go for full adoption. By moving from the “migrate” phase to the “accelerate and innovate” phase, the potential business impact increases from tens of millions to hundreds of millions.

Barriers restricting full cloud adoption by FMCGs

FMCG brands and distributors have been unable to unlock the full potential of cloud technology due to several issues, some of which include:

  • Perceptions of risk and complexity: perceive full cloud migration as risky and complex, with research showing that 46 percent of FMCG executives say the complexity of business and operation change was a barrier to adoption.
  • Perceptions of risk and complexity: perceive full cloud migration as risky and complex, with research showing that 46 percent of FMCG executives say the complexity of business and operation change was a barrier to adoption.
  • Lack of technical knowhow: Most existing cloud solutions are highly technical, requiring complex software, dedicated hardware, and extensive training for analysts and operators, all of which are costly.

To maximize the potential of cloud-based technologies, FMCG businesses need a solution that is low risk and easy to adopt. This is the RedCloud advantage.

Switch to the cloud, with RedCloud’s connected open commerce platform

RedCloud is the world’s first open commerce platform that unlocks the full value of the traditional distribution chain, connecting brands, distributors, retailers, and merchants on a single cloud-enabled platform. With RedCloud, brands and distributors have increased visibility across the supply chain and can connect directly with even the smallest merchants in any geolocation. The platform also collates valuable data at POS, providing insights into variable demand and changes in customer behaviour.

The cloud-powered integrated marketing intelligence tool enables sales and marketing leaders to analyze the effectiveness of their promotion and marketing spend in real-time, as well as create targeted customer and geolocation specific campaigns that take advantage of the micro-consumption patterns in the market. FMCG marketing teams can also leverage the insights to identify new opportunities to upsell and cross-sell their products, increasing revenue by up to 60 percent.

Unlike other cloud solutions, RedCloud is an intuitive and easy to use solution with a short learning curve. Sales and marketing teams can set up and use the platform with minimal training as the data and insights generated are displayed on easy to understand, customizable dashboards, which gives your teams a competitive edge.

Contact us today to see how deploying RedCloud can provide a competitive edge for your brand, increase revenue by up to 25 percent and drive growth.

Web 3.0 and the open economy.

Web 1.0 , the first iteration of the internet, was a strange place. It was characterized by a few creators, was read-only and had no room for user interaction. Websites only served static content and had minimal functionality.

Web 2.0

The launch of Facebook alongside other social networks and interactive platforms marked the dawn of Web 2.0. In this iteration, websites offered dynamic content that allowed deeper user engagement and enabled more people to become creators. This was the age of e-commerce, cloud, and social media. However, with these advances came a new set of problems. Centralized control and poor platform security led to imbalanced creator economies and disgruntled communities.

The launch of Facebook alongside other social networks and interactive platforms marked the dawn of Web 2.0. In this iteration, websites offered dynamic content that allowed deeper user engagement and enabled more people to become creators. This was the age of e-commerce, cloud, and social media. However, with these advances came a new set of problems. Centralized control and poor platform security led to imbalanced creator economies and disgruntled communities.

Fun fact: A large part of why Internet Explorer failed was because it was a Web 1.0 application trying to compete in a Web 2.0 world, while Chrome was built for Web 2.0.

Big Data was another major feature of Web 2.0 as brands began a race to collect as much customer and transaction data as possible. However, in many cases, the data collected was unintelligible and didn't provide any useful or actionable insights that significantly improved business decisions. Also, with vast amounts of often personalized data at their disposal, data and information security became a major issue for brands, as it became clear, perhaps for the first time, just how powerful data can be when analyzed properly, as well as how much damage can be done if said data gets into the wrong hands.

These factors all contributed to the search for a system that was both open and secure, where data could be transparently collected, transferred, and leveraged by any person, group, or brand, without compromising the safety of personal information. This was the birth of Web 3.0

Web 3.0 is the next significant paradigm shift in the evolution of the internet and represents a fundamental disruption of the standard centralized model of web 2.0 and its "platform-takes-all" economics. Open, trustless, and permissionless networks are the future of Web 3.0. Innovations like the blockchain, DeFi, and NFTs are changing the way we communicate and share value on the internet, paving the way for a truly open economy where you can connect, engage, and trade with anyone without unnecessary centralized control.

How Web 3.0 is powering the "open economy."

Steve Jobs announced the iPhone in 2007 to a lot of applause and attention, but there was another technology that I believe was even more important than the phone itself - The App Store . The presence of a trusted platform that ensured safe distribution allowed more developers to create mobile apps and led to a $ 218 billion market by 2020.

However, in true Web 2.0 fashion, app stores have slowly evolved into walled gardens where centralized entities exert undue control while charging a significant percentage on the revenue that should accrue to app developers. This problem is not unique to app stores, it is evident in e-commerce and even traditional finance (Ever wondered why banking fees are so high and you have almost no choice but to pay them?).

Web 3.0 is set to change the landscape by decentralizing control and power from a single entity and sharing it with users and creators, who should be the real stakeholders. Why should a small business have to pay a huge chunk of their revenue to Amazon while still competing with the platform itself to sell to customers? Or why should Facebook dictate how your personal data is collected, used, and sold? With Web 3.0 technologies, the economy becomes truly " open ", and the power is back in your hands.

One of the easily recognizable applications of decentralization is blockchain and cryptocurrency. With a mobile phone and internet access, anyone, even in the most remote areas, can transfer and receive funds in minutes without a central entity processing the transaction. It's completely open, anonymous, permissionless, and trustworthy .

NFTs are another Web 3.0 technology built on the blockchain that allows artists to earn directly from their art. Traditionally, when an artist sells a piece of art, they lose all rights to that piece and cannot earn directly from that piece ever again. With NFTs, however, an artist can earn a percentage of the piece's price every time it's sold. NFTs enable this with blockchain-powered smart contracts that provide a transparent, fool-proof mechanism for profit-sharing and collective decision-making, which will eventually address the inequity of art patronage, shifting the power dynamic within the industry.

Creating an 'open' future

So, how does a Web 3.0-powered future look? And what industries will it affect?

I predict that it will affect every industry, but I'm most excited about what the change means for global commerce and supply chains. For decades, the traditional global supply chain, particularly in the FMCG industry, has depended on an inefficient mishmash of manual paperwork, cash transactions, and disconnected local merchants. E-commerce is only marginally better, as centralized restrictions like Amazon impose unnecessary that kill small businesses . With Web 3.0, however, we can finally create a true "sell anywhere" economy, where global brands can reach any merchant in any market and sell directly to them.

This is why we're building RedCloud, the world's first open commerce platform that connects brands, distributors, and retailers in the world's fastest-growing economies together. Unlike the traditional distribution chain, RedCloud provides a solution where brands and distributors can access valuable POS data across the supply chain, gaining valuable visibility that can be leveraged to eliminate any supply chain inefficiencies. Merchants can connect with global brands, offer their customers better products at more competitive prices, and build a digital trading profile that can be collateralized to provide access to credit facilities.

The time to build an open future that connects us is now, and Web 3.0 is key to that future.

Eliminate friction in the FMCG industry with digital payments

According to the World Bank, over half of all payments in the retail industry are made in cash, with most of these transactions occurring among more than two billion individuals and 200 million small businesses in emerging economies. These businesses and individuals lack access to formal capital and credit and must rely on informal lenders and personal networks to raise funds to meet their daily personal and business needs.

The over-dependency on cash payments in the retail industry has had devastating effects on merchants, retailers, and FMCGs, as a World Bank study shows that the average retailer loses between 4 and 15 percent of total revenue to the costs of cash handling, while brands lose between 7 to 20 percent of annual company turnover.

While digital payments can remedy these challenges, eliminating cash payments and driving the adoption of digital payments across emerging markets is easier said than done, as many Digital Financial Services (DFS) providers have found.

How cash payments cause friction

In rural Uganda, an FMCG company had to drop bags of cash by plane every 15 days to pay workers. Upon arrival, over 8000 workers had to queue for more than half a day to receive their wages, and the company had to deploy nearly 100 staff to manage this process, including 64 field security guards and armed police. In Nigeria, Coca-Cola truck drivers who deliver drinks to corner shops are victims of armed robbery as often as once a month. FMCG brands also report that collecting and transporting cash from small “mom-and-pop” shops is not only incredibly risky and prone to fraud but is notoriously inefficient, as field officers must spend extra time to collect and manage cash - time that could be better spent selling to new customers.

Evidently, cash transactions pose significant problems for FMCG companies and brands across emerging markets, but it also affects retailers and merchants. Every year, retailers lose nearly $100 billion to shrinkage and leakages, with over 34 percent of this shrink attributed to cash theft. Dealing exclusively in cash means small retailers and merchants are restricted from accessing the vital financial services they need to grow their businesses. Even those with access to traditional banking cannot fully maximize the available credit and savings facilities. Making bank deposits, for example, is a challenge because many merchants operate during the same hours as banks and cannot afford to ignore customers and close their stores. This leaves the merchants stuck with cash and the dominance of cash payments continues.

Digital payments are catching on, but not fast enough

Digital payments have the potential to solve the numerous problems caused by cash payments across emerging markets and can potentially reach over 1.6 billion new retail customers across emerging markets and provide $2.1 trillion in new credit for merchants, retailers, and small businesses. In addition, full adoption of digital payments can increase the GDPs of all emerging economies by 6 percent, or $3.7 trillion, an equivalent of creating a new economy bigger than all the economies of Africa.

FMCG brands can substantially increase their revenue by leveraging digital payments to drive distributor and retailer growth with advanced supply chain financing and access to credit. These value-added services also enable stronger business relationships across the supply chain and drive increased loyalty from merchants and distributors. Digital payments also open the door for increased visibility across the distribution chain, providing valuable insights at POS that FMCGs can leverage to develop growth strategies and increase sales.

Despite the clear benefits of digitalizing payments, many FMCGs still struggle to drive its adoption across their distribution chain. Most digital payment solutions were built to solve the cash problems of larger FMCG brands but do not give smaller merchants a compelling enough reason to adopt the solutions. However, these merchants are often paid in cash by the end consumers, placing the burden of converting cash to digital money on smaller merchants and distributors, who do not have a reason to do so.

Solving the cash problem and reaping the dividends of digital payments will require FMCG brands to:

  • Incentivize the adoption of digital payments: FMCGs and other DFS providers must build payment solutions with a clear value proposition aimed at distributors, smaller retailers, and merchants and provide them with value-added services that help them sell more and grow their businesses.
  • Collaborate to build a payment ecosystem: FMCG brands and larger distributors must switch from building payment solutions in silos to collaborating with DFS providers, Mobile Network Operators (MNOs), and third-party payment solutions, recognizing that distributors, retailers, and smaller merchants are unlikely to adopt a solution that only works with a single brand.

Eliminate cash friction with RedCloud’s open commerce platform

RedCloud has built the world’s first open commerce platform with an integrated digital payment system the world’s largest local payment network consisting of 2 million+ payment points that leverage the widespread adoption of mobile phones across emerging markets as over 80 percent of adults in developing economies have a mobile phone, while less than 65 percent have bank accounts.

We solve the cash problem by creating a solution with value propositions for both the largest FMCG brands and the smallest corner shop. We created Red101, a digital platform that enables merchants to offer digital products like mobile airtime and cable TV subscriptions to their customers and get a commission on every transaction.

The RedCloud open commerce platform enables FMCG brands to connect with every distributor, retailer, and merchant across their distribution chain and accept digital payments. The platform also captures valuable data at every POS along the distribution chain and analyzes the data to provide brands with insights into market demand and consumption patterns that sales and marketing teams can leverage to create growth campaigns, drive sales, and increase revenue.

Book a demo today to see how you can start unlocking the full value of your distribution chain, sell to more merchants, and start accepting digital payments seamlessly.

The digital wholesaler - How distributors can build resilient supply chain

Globally, emerging markets account for 55 percent of the total consumer spending of FMCG products. Within the next five years, over 5 billion new middle class consumers will be created in these markets, and their spending is expected to exceed $6 trillion. To serve this rapidly growing consumer base, distributors and wholesalers across developing markets must leverage digital technologies to build a resilient and responsive distribution chain.

The pandemic has revealed the lack of resilience in the traditional FMCG supply chain, as many distributors have struggled to handle the rapid change in demand for the products that they carry. Distributors and wholesalers now see the need to make data-driven decisions to serve retailers better and maximize their margins. For example, under the traditional distribution model, distributors have mainly acted as order takers, delivering goods from the manufacturers to merchants at the cheapest cost per mile. However, to minimize future supply shocks, many distributors now plan to incorporate digital solutions that provide real-time data and insights across the supply chain to enable strategic, data-driven decision-making.

The traditional distribution chain is no longer fit-for-purpose

Distribution across emerging markets is mainly informal, with up to 80 percent of all consumers shopping from stalls that are set up at the roadside or in local markets. Thus, distribution across this highly fragmented market remains hugely complex, leaving many distributors unable to properly penetrate the market and get the right products to the right shops at the right time.

Van sales are the major distribution channel across LATAM And Africa, a highly inefficient model where distributors load their products into a van and drive along a pre-determined route to visit retailers and merchants to discover if there is a demand for the product. If there is a demand for their products, the sales rep either sells to the merchant on credit or receives a cash payment. The van visits multiple retailers, returning to the distributor with raw cash and any unsold products at the end of the day.

This model is outdated and no longer ‘fit-for-purpose,’ as it lacks visibility and leaves distributors unable to detect and respond to changing demand. Wholesalers are often forced to sell their products on credit or at lower prices to reduce inventory costs, a practice that eats into already-thin margins. In addition, this model encourages the almost-exclusive use of cash, which is risky and costly as the funds can be stolen or mismanaged.

A digital solution that provides real-time, end-to-end visibility across the distribution chain in emerging markets is the key to offering a new degree of resiliency and responsiveness. This solution must also withstand the daily shocks of rapidly changing demand across the market and will solve one of the biggest challenges wholesale distributors face. Therefore, digitalizing the supply chain will enable distributors to go beyond reacting to market disruption, to anticipating them and adjusting the supply chain immediately while still providing the most efficient and cost-effective service delivery.

Build a resilient distribution chain with RedCloud’s open commerce platform.

With increased mobile phone penetration across emerging markets, wholesale distributors are taking the first step by placing calls to retailers before delivering to them, but this is not nearly enough. Without real-time visibility and a solution that enables retailers to pull demand, wholesale distributors cannot make the right decisions that increase sales and drive growth.

RedCloud has solved this problem by building the world’s first open commerce platform – a platform that directly connects FMCG brands, distributors, and retailers. With RedCloud, distributors can buy products directly from any FMCG brand and pay digitally, while simultaneously selling to retailers on the same platform and accepting digital payments.

Our platform also provides end-to-end visibility across the distribution chain. With the click of a button, you can track demand across various product categories, retailer types, or geolocations and generate granular insights to identify new or existing retailers willing to buy from you. These insights help distributors make strategic data-driven decisions that increase sales and drives growth.

We have eliminated the friction along the traditional FMCG supply chain and given you the tool that you need to make strategic decisions and build resilience into your distribution chain. Schedule a demo today to see how RedCloud empowers distributors in emerging markets to create more resilient distribution chains.

Future-proof your supply chain with digital

Globally, FMCG supply chains have been disrupted and the critical shortcomings in the current system have been exposed. Studies show that 40 percent of all multinational companies have had their supply chains recently disrupted. Many manufacturers have seen production halted due to a shortage of materials, while others have been unable to cope with the rapid fluctuations in demand. This had led to the familiar images of empty shelves, as customers could not access necessities like toilet paper, pasta, and flour.

Now, adaptability and supply chain resilience are the keywords of the FMCG industry, as over 90 percent of FMCG brands plan to change their supply chain networks and more than 40 percent expect to increase their investment in supply chain management with the primary aim of improving speed, resilience, and agility.

Why FMCG distribution chains must evolve

The traditional FMCG distribution chain is a series of largely discrete, siloed steps and is further complicated due to the fragmented nature of the retail industry in emerging markets. Traditional trade still accounts for 70 percent of all consumer goods sales across emerging markets.  Therefore, driving growth with this distribution model will require FMCG brands to reach large volumes and many different types of retail outlets, while understanding the different role each outlet plays to the customer, as well as how to influence demand at the retailer.

What products a retailer stocks, how much they stock, the price they are willing to buy, the distributor that delivers the products, and how often the stocks are replenished are all vital information that FMCG brands need to create the right sales and marketing strategies to drive growth. However, there is a severe lack of visibility across the traditional supply chain as brands are left in the dark, unable to gain insight into who is buying their products, and properly collaborate with channel partners.

If supply chains do not evolve, the consequences will be dire for both brands and consumers in developing economies. Empty shelves in developed economies might be a minor inconvenience that is quickly solved, but it is a far more serious problem for the lower-income consumers in emerging markets whose survival depends on the availability of essential products like milk, pasta, baby food and diapers, and the small businesses who also depend on daily sales to make ends meet.

Future-proofing the distribution chain with digital technologies

FMCG leaders are beginning to see the need to transform their supply chains and make them more resilient, as a survey of 500 FMCG executives showed that end-to-end visibility was ranked as the top factor responsible for creating a successful supply chain. To achieve end-to-end visibility, FMCG brands need a digital solution that gathers real-time insights on market demand and displays the data collated into easy-to-understand dashboards, so that sales, marketing, and supply chain leaders can leverage the collated data to generate sales and drive growth.

To build resiliency and agility into the FMCG distribution chain with digital technologies, the solution chosen must capture data seamlessly across the entire distribution chain, from the manufacturers warehouse to the shelf of the smallest merchant. It must also provide real-time visibility at POS, so that brands can anticipate and react to changes to demand in the shortest time possible.

Build a resilient supply chain with RedCloud

The most agile and resilient supply chain will be an interconnected ecosystem of brands, distributors, and retailers, where data silos are dissolved, and each channel partner will have full visibility into the needs and challenges of other players. Stock shortages, rapid increase in customer demand and other important information will be visible throughout the system in real time, allowing brands to react and plan accordingly. This is the RedCloud solution.

RedCloud has built the world’s first open commerce platform, a platform that provides FMCG brands in emerging markets with visibility across their distribution chain. For the first time, a brand can see in real-time, every single merchant that buys their products, the prices of the product, how often they restock, and other valuable information. For example, a soft drinks brand might observe a merchant that places orders frequently and offer them a branded refrigerator. This could potentially increase the merchant’s average order value and enable them to generate more sales.

We have also built the world’s largest payment network, with over 2 million cash-in points across 100 countries, so brands can seamlessly accept digital payments from merchants who may not have access to bank accounts.

Book a demo with us today to see how RedCloud is helping FMCG brands across emerging markets build more resilient supply chains.

How FMCGs can unlock outsized growth with data analytics

Adoption of data analytics is a must for FMCG brands who want to drive consistent, outsized growth. Research shows that FMCG brands who effectively use data analytics capabilities to service their sales and marketing processes are 150 percent more likely to outgrow their competitors. Many FMCG leaders, especially those in emerging markets, recognize the need to leverage data to grow their businesses, as 64 percent of leaders expect to increase their spending on predictive analytics.

However, many brands do not effectively use data to drive the needed growth. Studies show that only 40 percent of consumer-goods companies have achieved returns above the cost of their investments into data analytics. To increase sales, achieve outsized growth, and outperform the competition, companies must learn to use data analytics to engage prospects better and increase the lifetime value of the average customer.

Why FMCG brands fail to drive growth with data analytics

The value at stake for FMCG brands that do not effectively utilize data analytics is enormous. Industry trends show that a brand’s ability to scale up its data analytics capabilities strongly correlates with its financial performance. The companies with the highest level of analytics maturity are creating significant value and have a growth rate of approximately 60 percent more than their competitors.

We have worked extensively with FMCG brands in emerging markets and have identified some of the most common pitfalls that prevent companies from capturing value at scale from data analytics:

  1. Failure to set specific goals for data analytics programs: Companies who fail to drive consistent growth with data analytics are often guilty of not setting clear goals for their analytics programs, such as increasing cross-sells, increasing sales velocity, or reducing churn. They treat analytics as side projects rather than critical enablers of company-wide growth objectives. Unfortunately, this means that digitalization efforts struggle to get the attention and resources needed to succeed.
  2. Failure to capture valuable data: Many FMCGs capture or purchase large volumes of data in the hope of unlocking value but lack the capabilities to translate the available data to relevant and usable insights. Without the ability to properly analyze data, extract insights, and make data-driven decisions that provide a deeper understanding of the customers’ needs and enable a more efficient sales process, any investment into data analytics will not produce the expected growth.
  3. Failure to invest in change management: Senior leaders must model the change of making data-driven decisions and provide a comprehensive plan to encourage adoption by frontline employees. Without adequate investment in change management, the proposed data-driven changes made to sales and marketing processes will face low adoption.

How FMCG brands can use data analytics effectively

Many FMCG brands have been unable to leverage data-driven growth at scale, but the recipe for success is clear. To successfully drive growth with data analytics, FMCG brands must:

  1. Agree on the most important goals: To avoid wasting resources on programs that do not deliver significant value, senior leaders in the company must agree on what analytics goals to pursue. Leaders and their teams must collaborate to identify the greatest value, then shift resources and focus on those areas.
    For most FMCG brands in emerging markets, the greatest value lies in gaining visibility across the entire distribution chain. The traditional distribution chains are ‘dark’ and provide no visibility at point of sale. Providing insights into these ‘dark markets’ is crucial to identifying and maximizing growth opportunities.
  2. Select the tools and solutions that generate the best insights: The quality of insights generated by an analytics solution will significantly impact the level of growth unlocked. Thus, FMCG brands must invest in tools that capture the right type of data and analyze it to provide actionable insights. Furthermore, the tool must make the insights available in an easy-to-understand format so that leaders can make data-driven decisions in real-time.
  3. Invest in change management: Ultimately, the success or failure of an analytics program depends on the level of acceptance and adoption by the frontline sales teams. If sales reps are not involved in the development or selection of analytics tools, they are less likely to trust the tool and might abandon it outrightly. Leaders must educate frontline sales and marketing teams on the need for an analytics solution and communicate in clear terms how the insights generated can help improve their performance.

Unlock consistent growth with RedCloud

RedCloud has built the world’s first open commerce platform, a complete data analytics solution that unlocks growth for FMCG brands in emerging markets. Our solution provides brands with real-time visibility into the distribution chain and provides actionable insights that can be leveraged to make data-driven decisions that drive growth.

With RedCloud, sales and marketing teams can see in real-time who their customers are, what products they are buying, and how often they buy. With these granular insights, you can design targeted trade promotions and growth marketing campaigns that increase order velocity and ultimately lead to more sales.

We have also built the world’s largest payment platform with over 1 million pay-in points in 200 countries. Now, brands can easily accept digital payments from their customers and avoid huge cash handling costs. By trading on a digital platform and building a trading profile, brands can identify fast-growing merchants and provide them with advanced supply-chain financing to help them grow their business, even if the merchant does not have a bank account.

Schedule a demo with us today to discover how RedCloud can help you outperform the competition and drive sustainable growth.

Driving FMCG growth in emerging markets with sales transformation

Emerging markets present the largest growth opportunity for FMCG brands, accounting for over 70 percent of total revenue growth and 55 percent of the global spend on consumer-packaged goods (CPG). Consumer spending across these markets is expected to grow rapidly over the next few years to reach $6 trillion, as 5 billion new middle-class consumers are created. Given that emerging consumers spend 50 to 75 percent of their disposable income on consumer products, capturing this segment is vital to the growth ambitions of FMCG brands.

Despite this tremendous growth opportunity, many FMCG brands struggle to drive sustainable growth in developing markets, as studies show that larger CPG companies will grow 5 times slower than their smaller competitors. To increase revenue and drive consistent growth, FMCG brands must transform their traditional sales model to meet the ever-increasing demand for their products.

Why FMCGs need to transform their sales models

Emerging markets present a unique set of challenges to FMCG growth, as physical stores and markets generate up to 80 percent of all sales. Furthermore, growth in these markets does not result from winning shelf-space at large supermarket chains, but from ensuring precise distribution at hundreds of thousands of small ‘mon-and-pop’ shops and neighborhood grocery stores.

Under the traditional sales model, FMCG sales reps must visit these small shops individually to check inventory, collect orders and receive cash payments – a highly inefficient process that leads to significant loss of revenue. Unfortunately, sales reps cannot realistically cover every single shop, leaving brands with no visibility at POS and an inability to directly track sales or stock levels across their distribution network. This makes it hard to determine sales targets, optimize the supply chain to meet rapidly changing demand or plan effective trade promotions.

The lack of visibility across the distribution chain also leaves FMCG marketers in the dark, without granular data on their customers, and as such, are unable to estimate real-time demand or identify growth opportunities. Consequently, CPG companies in emerging markets, especially in Africa and LATAM, are unable to drive consistent growth and increase market share.

Disrupting traditional FMCG sales with digital solutions

Data-driven sales execution is the key to unlocking growth across developing markets but will require sales leaders to holistically transform their organizations by integrating digital solutions to their sales operations. Studies show that Chief Sales Officers (CSOs) who adopt a holistic, integrated approach to sales transformation report top-quartile growth. FMCG brands with the highest growth rates have also been shown to have embedded data analytics across their sales operations.

Digital transformation allows sales leaders to redesign their route-to-market strategies to identify new and existing demand spaces. By building strong, digitally enabled links with distributors, retailers and merchants brands can create direct, personalized relationships with channel partners independent of the path a product takes to arrive on a the retailer’s shelf.

CSOs need a solution that creates a 360-degree view of every distributor, retailer and merchant while also providing granular targeting. This enables sales leaders to create and optimize their growth strategies. Digitizing the sales process also provide sales reps with retailer-specific data, insights and next-best-actions that are necessary for driving grow. The increased level of personalization and precise targeting enabled by real-time visibility has been proven to have a significant impact on sales growth – up to 20 percent.

Drive growth with RedCloud

RedCloud is the perfect solution that helps FMCG brands across emerging markets drive growth. We have built the world’s first open commerce platform – a digital solution that provides brands with visibility across the traditionally fragmented distribution chain.

For the first time, FMCG brands can directly connect to every merchant in the distribution chain and see in real-time where the demand for their products is, how often the merchant restocks the product and other vital information. The platform analyses the collated data and provides sales leaders with actionable insights that pinpoint available growth opportunities. For example, by identifying merchants that restock a product often, sales leaders can detect areas of high product demand and create trade promotions that fills that demand, increases sales and eventually drive month-on-month growth.

Schedule a demo today to see how RedCloud can help your brand drive month-on-month growth and capture market share.

Lack of data analytics spells death for FMCG distributors

Today, wholesalers and distributors in emerging markets face intensified battles over shrinking margins, increased competitive pressures from e-commerce platforms, fluctuating market demand, and supply chain issues. FMCG manufacturers want faster and cheaper ways of getting their products to the retailer’s shelves, and retailers want to buy products at lower prices and still increase their profits. This leads to considerable margin reduction and a threat of stagnation for distributors, as brands and retailers attempt to work together.

If distributors in emerging markets do not embrace digital technologies and leverage data analytics to reduce costs, increase visibility across their distribution chain and provide specialized offerings to merchants, they will become less relevant to both brands and retailers, which spells death to their business.

FMCG distributors must adopt data analytics to survive.

For decades, FMCG distributors have relied on existing relationships to penetrate the fragmented retail markets in emerging economies, but that is no longer enough. The traditional sales model that relied on the gut instincts of sales reps to maintain business relationships is not scalable and has made it increasingly difficult for distributors to compete effectively and grow their businesses.

Every business day, large volumes of data are created by wholesale distributors as they buy from manufacturers, receive orders from their customers, and fulfil the orders. This data can help business leaders understand what is working and what can be improved, but only when it is analyzed to generate actionable insights. A survey of leading distributors shows that 75 percent of high growth wholesale distributors have developed advanced demand planning and forecasting capabilities by adopting data analytics in their processes. They are also 31 percent more likely to have real-time visibility across the organization and the broader supply chain.

Adopting data analytics also allows distributors to uncover challenges in the products they carry and the services they provide. By understanding these challenges, sales teams can provide solutions that cement customer loyalty and increase market share. For example, if a distributor notices a pattern of customer complaints about a product spoiling before the expiry date, the sales reps in the field can be instructed to educate retailers on how best to store the products to lengthen its shelf-life and reduce the resources lost. However, without a data analytics system, the sales leader might not realize the problem for months and can eventually lose customers.

Unfortunately, many distributors in emerging markets lack any basic data collection or analytics system. Without these capabilities, they cannot understand the micro-consumption patterns in the market and miss significant upselling or cross-selling opportunities that can be leveraged to drive growth.

Developing analytics capabilities allows wholesale distributors to collect and review every piece of data generated across the distribution chain to make smarter, timelier, data-driven decisions. In the pursuit of consistent growth, knowing how to leverage accurate and relevant data to create a more efficient distribution chain is an edge that every distributor needs.

How distributors can leverage data analytics to drive growth

For many distributors, the most significant barrier to successfully adopting digital technologies is the fear of disruption to their business. However, for those willing to embrace change, there is still a hurdle – how to begin. Without clarity on the exact steps to take, many distributors waste time and resources on data analytics programs that do not provide the needed growth.

The first step to successfully implementing an analytics system that drives growth is to identify the areas where you can make the smallest change for maximum return on investment. We have identified three main areas that distributors must optimize with data analytics to see the consistent, outsized growth. They are:

  1. Market visibility: For distributors in emerging markets, market visibility is key. Better visibility across the entire distribution chain is essential to making smarter decisions, driving operational efficiency, and improving the overall customer experience. With a data analytics solution that captures real-time syndicated data at POS, you can detect where the demand for certain products is, identify who is buying the products, and directly engage with those customers to maximize upsell and cross-sell opportunities.
  2. Supply chain: The supply chain is one of the crucial parts of a distributor’s business, and a failure to optimize it can significantly affect the business. With the right analytics tools, you can optimize your delivery network to minimize stockouts and unfulfilled orders, effectively manage retailers and merchants in your network and create a streamlined, failure-proof delivery process.
  3. Customer engagement: Under the traditionally fragmented distribution model, wholesalers cannot directly engage every customer in their network and must settle for a one-size-fits-all approach. However, by leveraging data analytics, you can engage each retailer directly and offer them a customized promotion that increases sales and drives growth. For example, by analyzing locations with high demand, you can identify underserved retailers with high order frequencies in specific geolocations and offer advanced supply chain financing to increase their average order volume and drive growth in that location.

With the knowledge of the critical competencies that must be developed, distributors can now select the right data analytics tools that provide the needed capabilities in the organization. 

Grow your distribution business with RedCloud

RedCloud is the world’s first open commerce platform that unlocks the full value of the distribution chain by providing distributors with a powerful yet easy-to-use tool that collates POS data across the entire chain in real-time and analyzes the data to provide actionable insights that can be leveraged to drive growth. Our powerful market intelligence solution displays these insights on a customizable dashboard in an easy-to-understand manner, so distributors do not have to spend valuable time deciphering complex data.

We have solved the biggest problem in the traditionally fragmented retail market in emerging economies by empowering distributors to directly engage with every single retailer across their network on a single platform. With this increased visibility, distributors can easily create data-driven promotions that take advantage of the micro-consumptions patterns in the market to drive growth. We have also built the world’s largest local payment network with over 2 million pay points in 100 countries and provided distributors with an easy way to collect digital payments from merchants of any size, even if the merchant does not have a bank account. This will eliminate the high costs of cash handling and provide another vital data source that can be analyzed to identify underserved merchants and provide them with the credit facilities they need to grow their businesses.

Book a demo today to see how you can leverage RedCloud’s open commerce platform to drive growth in your business.

How supply chain issues might ruin the holidays

Half-empty shelves, longer delivery times, labor shortages, and increasing prices of consumer goods are symptoms of a global problem – supply chain issues. Bottlenecks at many steps along the way have been exacerbated by the pandemic, causing severe issues in a system that demands timeliness to function properly. Worse still, this has happened just as demand for many products increased drastically.  The ongoing supply chain crisis threatens to have significant consequences for the upcoming holiday season throughout the world as many consumers can’t buy what they want when they want it, and experts predict that it might get worse before it gets better.

The supply-chain disruption started over a year ago, as COVID-19 response from governments and corporations created many interruptions along the supply chain. This, combined with rapidly changing customer demand, has caused severe disruption, resulting in manufacturers unable to meet consumer demand in time. The disruption cuts across various sectors, including manufacturing, consumer goods, and even electronics, with Apple reportedly halting the production of their latest iPhone entirely for the first time in over a decade.

While the pandemic has significantly affected the global supply chain, external hindrances to the value chain, such as political disputes, are not a new thing and will continue to exist for as long as there is global trade. So, what is responsible for the current supply chain crisis?

Why supply chain issues are showing up now

The problem with the flow of goods, especially in the consumer goods industry, is quite profound, as there are underlying structural concerns that cause delayed delivery and increased prices irrespective of the pandemic, energy crises, or grounded container ships. All over the world, the core problem remains the same – the process of getting products from factory to shelf is broken. There are issues at every point in the distribution chain – from too many intermediaries adding unneeded complexities to the overly complicated relationships between brands, distributors, and merchants, to the overwhelming reliance on expensive cash rather than digital payments – the traditional supply chain is broken and no longer fit for purpose.

In addition, there is little or no sales data across the industry, as FMCG brands have no idea who their customers are. Without visibility into the distribution, it becomes impossible to anticipate rapid increases in consumer demand and make data-driven decisions to meet that need. On the other hand, Merchants are disconnected from the brands whose products they sell and find it increasingly difficult to get the products they need at the prices their customers can afford.

Supply-chain disruptions are a bigger problem in emerging markets, where billions of consumers are in danger of losing access to necessary everyday items like baby food, nappies, and pasta. With a lack of sales data and no market visibility, FMCG brands cannot penetrate these essential markets and can only reach a tiny fraction of prospective merchants.

If we do not take steps to transform the world’s supply chains, prices will continue to skyrocket, and product availability will decrease, leading to a potential crisis for millions of individual households and local merchants in developing economies.

How open commerce can help eliminate supply chain issues

If we view global trade as a person, then the supply and distribution chains are the veins and arteries, and any disruption in the essential flow of goods will be fatal – and make no mistake, the consumer goods industry is headed for a heart attack, if we don’t act fast.

What we need is a solution that digitally transforms the distribution chain in emerging markets and unlocks the immense growth opportunity in those markets – a true ‘sell anywhere’ economy powered by frictionless, open commerce where brands can connect directly with any merchant in any market.

RedCloud is the world’s first open commerce that successfully digitizes the B2B supply chain in emerging markets, providing brands with increased visibility across the entire supply chain by collating valuable data at POS. RedCloud connects brands and merchants on a single, digital platform, so brands and distributors can see in real-time where the demand for their products is and who is buying their products. They can leverage this data to devise new strategies to reach more merchants directly.

RedCloud also empowers merchants to trade directly with global brands, access more products, and gain increased visibility into locally available FMCG products. The platform also eliminates the cost and risks associated with cash by enabling digital payments between merchants, distributors, and brands.

Rising prices and empty shelves are signs that it is time to change how consumer goods are bought, sold, and distributed. By bringing local merchants into the digital ecosystem and championing open, digital commerce, we can improve every aspect of the distribution chain to benefit brands, merchants, and consumers worldwide.

Schedule a demo today to see how we empower FMCG brands, distributors, and merchants to sell smarter, buy better, and pay simpler.

Driving digital disruption for FMCG brands in emerging markets

For decades, FMCG brands in emerging markets have depended on a traditional distribution model to penetrate a highly fragmented market and get their products to retailers’ shelves.

However, this model is grossly inefficient as it relies on costly cash payments and a large sales force who make hundreds of visits every week to merchant’s stores. With over 80 percent of all consumer sales in emerging markets occurring in small roadside shops and local markets, FMCG brands cannot capture any useable POS data from these stores in real-time. This leads to a severe lack of visibility across the entire distribution chain, making it almost impossible to identify new sales opportunities and drive growth.

But the story is changing. FMCG brands who are able to successfully disrupt their traditional sales process by combining data, analytics, and technology have generated above-market growth and an earnings before interest, taxes, depreciation, and amortization (EBITDA) increase of 15 to 25 percent.

FMCG brands in emerging markets must forgo age-old practices and digitalize their operations to keep up with the ever-changing demand trends and increased supply-chain volatility. By adopting new technologies and making data-driven decisions, they can better anticipate and maximize new growth opportunities.

The FMCG industry in emerging markets is changing

Over the last few years, the consumer in emerging markets has experienced a lot of change. Multiple trends have emerged that threaten to wreak havoc on established business models and sales strategies, while promising enormous rewards for the brands that can best anticipate new opportunities.

One of the biggest trends that will affect the FMCG industry is rapid consumer growth in emerging markets. Studies show that within the next few years, the growth of emerging markets will outpace that of the developed economies, with 1 billion new emerging market consumers created by 2025. Reports also show that these emerging-market consumers will become the dominant force in the global economy, as 60 percent of households that earn over $20,000 per year will come from emerging markets.

Another major trend that will affect the FMCG industry is the rise of the digitally conscious customer. The growing emerging market customer base is increasingly becoming digitally conscious. Already, more than half of all global internet users are in emerging markets, and a recent survey of African consumers in 15 cities across ten different countries found that 60 percent already owned internet-enabled smartphones.

The traditional distribution and sales model that FMCG brands have previously employed will not be enough to serve this ever-increasing consumer base. For example, while the experience of sales reps who physically visit merchant stores remains relevant, they cannot reach and satisfy the ever-expanding network of merchants who have rapidly changing needs and must compete in an ever-more-crowded marketplace.

FMCG brands in emerging markets must embrace digitalization to survive

Brands must therefore take the preferences of emerging-market consumers into account, disrupt, and redesign their distribution, sales, and marketing processes to better serve both new and existing customers. Brands that fail to adapt will squander crucial opportunities to build positions of strength that may be long-lasting.

While digitalization is essential, it is more important for brands to know exactly what and where to digitalize. FMCG companies must identify the most crucial areas of their businesses that can be optimized with digital technologies to drive the highest growth. We have identified three essential areas that brands must digitalize to survive in the coming years.

  1. Supply chain: The fragmented nature of the retail market in developing economies makes brands susceptible to supply chain disruption, with an estimated 40 percent of brands having some supply chain disruption in the last few years. Traditionally, FMCG brands are left in the dark, lacking insights into who is buying their products and are unable to collaborate with channel partners. By embracing digitalization, such as digitizing the stock ordering and inventory management process, brands manage their distribution network more efficiently and generate real-time, data-driven forecasts for future demand.
  2. Payments: Despite the rise of mobile payments, over 90 percent of all retail payments are still made in cash which is costly for all players along the supply chain. Digitizing retail transactions will enable brands, distributors, and retailers to better manage their cash flow across all layers of the supply chain. Digital payments also allow underserved retail merchants to build up a digital trading profile that can be leveraged to provide a wide range of digital financial products, including credit and insurance.
  3. Sales and marketing: By embracing digitalization, brands can leverage data analytics to generate actionable, easy-to-understand insights and make data-driven decisions that drive growth. Armed with these insights, front-line sales reps are transformed from order-takers to territory managers that can better serve merchants and drive consistent growth.

To successfully digitalize these processes, FMCG brands need a powerful yet easy-to-use digital solution that can be rapidly scaled across the entire distribution chain and provides clear, demonstrable benefits for brands, distributors, and merchants. RedCloud is that platform.

Drive digital transformation with RedCloud

RedCloud has built the world’s first open commerce platform, a decentralized, open trading platform that digitalizes the entire distribution chain. With RedCloud, FMCG brands have real-time visibility at POS across the entire distribution chain. Existing business relationships are transformed into data points that enable FMCG leaders to see in stark detail where the demand for their products is, observe the change in demand for their products across multiple geolocations and directly engage every single merchant in their distribution network.

With RedCloud’s open commerce platform, sales and marketing leaders can access real-time, actionable, granular insights on every channel partner in their distribution network. These insights can then be leveraged to increase customer engagement and create data-driven promotions and campaigns to drive growth.

RedCloud also has the world’s largest local payment network with over 2 million pay-in points across 100 countries. This allows merchants across emerging markets to easily make digital payments, even without a bank account.

Schedule a demo with us today to see how RedCloud can help you digitalize your business and drive consistent, outsized growth.

The Big Shake: Get ready for digital disruption in B2B commerce

At the turn of the century, retail in emerging markets experienced tremendous growth and immense change. Reports show that as the population in emerging markets grew by 21 percent between 2000 and 2015, retail sales per capita rose from $525 to $1490.1. Over the same period, emerging markets’ share of global retail sales jumped from 32 percent to 51 percent, growing at an 11.4 percent CAGR, compared to 5.7 percent for developed markets.

However, due to the fragmented distribution chain, an overwhelming reliance on cash payments, and a lack of technology adoption across the market, FMCG growth has slowed considerably, with reports showing zero retail growth between 2013 to 2015. Since then, the rate of retail growth has remained slow, and is likely to persist, unless there is a big shake in the traditional retail sales model caused by broad technology adoption. This move can generate up to $5.5 trillion in new retail sales across emerging markets.

The traditional retail market in emerging markets is fragmented

Across developing economies, retail trade is severely fragmented and depends mainly on small Kirana (grocery) stores and mom-and-pop shops as the main distribution channel for their goods. The traditional distribution chain, which starts from manufacturers to distributors, wholesalers, and eventually retailers, is a $2.8 trillion market that has remained unchanged for over 50 years.

This fragmented system comes with inherent complexities, as brands need to employ multiple field officers who service the same routes and the same retailers, often making delivery runs with partially loaded trucks. This system is grossly inefficient, as research shows that a large percentage of retail outlets are either underserved (with limited direct coverage from sales reps and low access to promotions) or overserved (with larger retailers receiving up to 80 visits in a week from a single brand). In addition, many small retailers and merchants are cash-constrained, lack access to credit, and are limited in the product assortment they can offer.

However, despite these inefficiencies, the role small shops play in local commerce, and social networks will remain relevant due to their scale and proximity to the end consumer. This is a crucial reason why B2B e-commerce has had limited success in emerging markets. Many consumers still want to buy their products and pay in their local stores, but the current e-commerce model only allows a direct-to-consumer distribution model. Hence, brands are stuck between two impossible choices. They must either adopt e-commerce and the sophisticated technology that comes with it but risk losing access to the large number of consumers who prefer to buy from small, local shops or stick with the inefficient, fragmented distribution system that increases costs and stifles growth.

To solve this dilemma and drive consistent growth, manufacturers must digitize their processes to eliminate inefficiencies without alienating their existing channel partners and breaking their distribution chain. This solution must disrupt the incumbent, inefficient distribution model while addressing the specific needs of brands, distributors, and retailers in emerging markets, ensuring that they can extract margin from the efficiencies generated across the entire value chain. However, building such a digital ecosystem capable of industry-wide disruption will require a thorough understanding of the market structure and properly setting the scale and speed of change.

Open commerce can increase the efficiency of the consumer goods industry

Open commerce is the only solution capable of industry-wide digital disruption while ensuring that brands can maximize the value of their existing distribution chain. Unlike traditional e-commerce, which focuses on selling to end-consumers and eliminating the traditional distribution chain, open commerce unlocks the full value of the distribution chain, providing a solution that connects brands, local distributors, retailers, and merchants on the same platform, all in real-time.

Open commerce provides the much-needed visibility that the current distribution model lacks by providing brands with real-time data at POS. With this data, sales leaders can see where the demand for their products is across the market and make data-driven decisions to meet that demand. Distributors can also place orders for their products from manufacturers and sell to retailers on the same platform while accepting digital payments, significantly reducing the time and resources spent on reconciling orders and payments.

Optimize your FMCG supply chain with RedCloud’s open commerce platform

RedCloud has built the world’s first open commerce platform that empowers brands, distributors, and merchants to sell smarter, buy better, pay simpler. With Red 101 Market, our open commerce platform, manufacturers can see every distributor and merchant in their supply chain in real-time. By accessing POS data, sales and marketing leaders can detect what products are in high demand and the areas where the demand is highest.
More importantly, FMCG brands can leverage Red101 Market to shift from traditional outlet segmentation, which is often based on scale or region, to a more advanced approach, such as grouping retailers based on micro-market characteristics, and overall growth potential. This will allow marketing leaders to create a more relevant assortment across price points and packaging types for different types of outlets, ensuring the right service level and delivery frequency across each outlet.

RedCloud has also built the world’s largest local payment network, available in over 100 countries and over 2 million pay-in points. This will allow merchants to pay for their FMCG products digitally even if they do not have a bank account. Adopting digital payments will significantly reduce the need for cash payments, which can cost up to 15 percent of total revenue, and provide merchants with a digital trading profile that can be used to access credit to grow their business.

Schedule a call with us today to learn how RedCloud’s open commerce platform can help you unlock the full value of your distribution chain and grow your business.

Choosing the best digital solution for your FMCG brand

The FMCG industry has experienced significant disruption over the last decade, caused by the rapid adoption of digital technologies and e-commerce, as well as changing consumer preferences. This disruption, which is poised to continue has affected the ability of larger FMCG brands to generate profitable growth. Research shows that smaller, digitally-enabled brands have recorded the highest growth rate of 34 percent compared to larger, manual-first companies, which grew by only 0.4 percent within the same period. Other reports show that companies in certain sectors like apparel, that effectively leverage data analytics have doubled their EBITDA margins compared to their traditional peers.

It is, therefore, no surprise that FMCG leaders recognize the need to digitally transform their operating models to meet today's and tomorrow's needs as 60 percent of FMCG CEOs plan to digitally transform their organizations completely within the next few years. To successfully accomplish this and maximize the considerable advantages that digitalization offers, FMCG brands, especially those in emerging markets, must carefully choose the right technology solutions that guarantee success. Choosing a hard-to-use solution that lacks company-wide adoption can spell doom for any transformation plan, leading to huge losses and reduced efficiency even with the right strategy.

What FMCG brands need from their technology

FMCG brands in emerging markets face numerous challenges that their technology must solve to increase market penetration and drive sales growth. Some of the crucial competencies that brands must develop are:

  • Increased visibility across the value chain: The retail industry across emerging markets is highly fragmented. Brands lack real-time visibility into who is buying their products through the traditional retail channels. Available data shows that up to 60 percent of all sales can be affected at the store level. By adopting a solution that provides access to this data in real-time, sales and marketing leaders can easily create data-driven growth strategies that increase sales.
  • Real-time data analytics: The ability to analyze real-time data to generate actionable insights is invaluable for FMCG brands. Building this competency allows CPG companies to track the micro-consumption patterns in the market and predict shifts in demand before they happen. This enables brands to build resilient supply chains and ensure that even the smallest merchant in the most remote areas receives the right product assortment at the right time.
  • Digital payments: Cash payments remain a huge problem across the FMCG industry, as FMCGs lose up to 20% of their annual revenue due to cash handling costs. With a digital payment solution that is widely accepted by sellers, retailers, and distributors, brands can reduce the resources lost on cash while gaining another layer of valuable insights into their customers.
  • Direct merchant engagement: The lack of merchant engagement across the traditional retail industry leaves brands in the dark on how best to market to their customers and drive sales. A digital solution that provides FMCG marketers with direct access to distributors, retailers, and merchants all on the same platform is invaluable and can help increase revenue by up to 15%.

In addition to providing the above-listed competencies, FMCG brands need a digital solution that is:

  • Easy to integrate with any existing technologies: FMCGs seldom use one digital solution. Therefore, every tech solution chosen must synchronize with all existing and future tech that the brand builds or acquires.
  • Easily used by a wide array of people with different levels of technical sophistication: A solution is less useful and exponentially costly if it can only be operated or managed by an engineer or highly technical employee. Without the ease of use, the technology will not be adopted uniformly across the company and can lead to a failed digital transformation agenda.

To find and choose the right digital solution for their FMCG brands, CEOS, sales, marketing, and technology leaders must all work together to identify the best tech solution for their companies and the industry.

Selecting the right technology stack for FMCG brands

FMCGs often take a technology-first approach to digitalization by building major platforms without focusing on specific use cases that can provide the most value for the organization. Upon identifying digital opportunities and increased competition in their industry, many brands rush to invest in technology without building a holistic digitalization strategy. They mostly focus on the technology alone and address immediate, discrete use cases without considering mid-to-long term sustainability. It is no wonder then that over 70% of all digitalization initiatives by FMCG brands eventually fail, and only half of FMCG leaders say they have made moderate progress at meeting their digitalization and analytics objectives.

A recent global survey by McKinsey shows that the two largest challenges FMCG companies face with driving digital transformation are creating a holistic strategy to effectively develop data analytics capabilities and designing an effective technology infrastructure that effectively supports data-and-analytics activities at scale. The survey also found that 80% of all CPG companies make their IT departments responsible for data transformation, often without input from sales and marketing leaders. This results in brands adopting sophisticated, expensive technologies chosen by IT staff but unusable by sales and marketing teams.

Selecting a technology solution should be as much of a business decision as an IT decision. Brands must closely identify key business use cases and consult with sales, marketing, and operations leaders to identify value drivers across multiple teams and processes. Then, they must select from a wide array of available technology solutions while prioritizing efficiency, ease of use, and ease of integration.

Driving FMCG digitalization with open Commerce

An open commerce platform is the best technology solution for FMCG brands in emerging markets, as it satisfies the criteria mentioned above while providing the necessary competencies that will drive growth.

RedCloud's open commerce platform is the world's first decentralized trading platform powering a trade anywhere economy. With RedCloud, brands gain unprecedented visibility across their supply chain as our solution captures POS data in real-time from every merchant, distributor, and retailer across the market. This provides a clear picture of the market and enables brands to reach their customers faster and easier.

Our open commerce platform also allows retailers to order for stock when necessary, rather than relying on visits by sales representatives to take orders. By providing sellers and distributors with the ability to pull demand, brands can build resilient supply chains that can instantly respond to changes in demand, increasing sales by up to 30%. Our inbuilt market intelligence tool analyzes all the data collated and provides actionable insights displayed in easy-to-understand, customizable dashboards. With these insights, sales and marketing leaders can identify growth opportunities and devise data-driven campaigns to take advantage of those opportunities.

We have also built the world's largest payment network with over 2 million pay-in points in over 100 countries. This digital payment network allows even the smallest merchant in remote areas to make digital payments for their FMCG products, while also generating a digital trading profile that can be used to provide access to much-needed credit and other financial services.

We have specifically built our open commerce platform to integrate seamlessly with any technology stack that your brand uses. This eliminates the need for huge installation or retraining costs, as the platform is intuitive and easy to use. Most field agents and marketing executives can use the platform and generate tangible results within record time.

Schedule a demo with us to see how our open commerce platform easily integrates with your current tech stack and can help grow your business.

Open commerce and ERP –The best digital solution to drive FMCG growth

Changing consumer behavior and the increasing importance of data analytics have disrupted the linear value chain in the FMCG industry. FMCG brands in emerging markets, who have traditionally depended on manual processes, now recognize the need to adopt digital solutions that offer superior, personalized services at lower costs.

However, cost pressures have continued to rise, with the average CPG company spending up to 21% of revenue on SG&A costs, the highest of any industry. These high SG&A costs are linked to the inefficiency of the traditional sales model still employed by brands, where hundreds of field sales representatives must visit distributors and merchants to take orders. In a bid to improve cost management and increase efficiency, FMCG leaders have turned to digitalization, as 76% of FMCG leaders plan to leverage digital solutions to reduce costs by up to 15% over the next 12 months.

Enterprise Resource Planning (ERP) systems have long been the preferred solution by FMCG brands and large distributors to unlock digital capabilities, but no significant progress has been made, especially across emerging markets. Many brands that have adopted ERP systems still depend on manual sales processes and lack visibility across the supply chain, with 46% of FMCG leaders saying they feel unprepared to meet their cost-reduction targets. FMCG brands need a newer, cost-effective, and more efficient digital solution to reduce costs successfully.

Why ERP systems are not enough for FMCGs

Enterprise Resource Planning (ERP) was a term first coined by research firm Gartner in 1990 to refer to a system of integrated software applications that standardizes and integrates business processes across various departments in an organization. For many FMCG brands and large distributors, ERP systems are the backbone of their IT systems, allowing multiple business units to integrate their processes and streamline the management and transfer of data within the company.

Despite its widespread adoption, traditional ERP systems may not be the best digital solution for FMCG brands, as analysis from Gartner shows that 55% to 75% of all ERP projects fail to achieve their objectives. This failure can be linked to three significant challenges that ERP systems pose to FMCGs, especially brands in emerging markets:

High costs: Adopting and maintaining ERP systems can be costly, especially for large FCMG brands. In addition, data conversion and migration costs when moving to a different ERP platform can be astronomical. Research from McKinsey shows that mandatory migration to the SAP/S/4HANA platform, the new industry standard, can cost up to half a billion dollars for large organizations. FMCG brands, many of whom currently wrestle with the need to cut costs, struggle to justify this large expense.Highly complex and technical: Many traditional ERP systems are complex and require highly skilled technical staff to run and maintain. The systems also have a steep learning curve, and employees often need extensive and expensive training to utilize the software properly. Mostly limited to internal processes: Traditional ERP systems are mostly limited to improving the efficiency of internal processes, with the most common use cases aimed at streamlining processes across finance, procurement, distribution, and other departments in the same organization. However, the existing ERP systems do not digitalize external processes with other ecosystem partners, such as distributors, retailers, or sellers. For example, FMCG brands that adopt traditional ERP systems still require sales reps to visit merchants physically, take orders manually and reconcile cash payments. The dependence on manual external processes causes SG&A costs to remain high, leaving brands with vulnerable supply chains.

Integrate open commerce with ERP to drive growth

Open commerce is a digital commerce platform built on the principles of decentralized control – the same principles behind cryptocurrencies, DeFi, and other web3 technologies. Open commerce is designed to create a digital “free trade environment,” where brands, merchants, and distributors can meet and transact digitally without undue interference from centralized entities.

By integrating ERP systems with an open commerce platform, FMCG brands and distributors can increase the efficiency of internal and external processes. For example, open commerce provides brands with a direct link to every merchant across the distribution chain and collates the data generated at POS. With this data, sales and marketing leaders can see where the demand for their products is without waiting for manual reports from field sales officers. This increased efficiency can reduce SG&A costs by up to 25% - a reduction that exceeds the most optimistic cost-reduction estimates for traditional ERP systems

In addition, an open commerce platform provides all the advantages of traditional e-commerce, such as real-time transaction data, direct customer engagement, and digital payments without the ridiculously high fees and artificial barriers enforced by e-commerce platforms. Open commerce platforms enable FMCG brands to overcome the challenges posed by traditional ERP systems, as it is a fraction of the cost, easy to install and maintain, and is simple to use.

Unlock FMCG growth with the world’s first open commerce platform

RedCloud has built the world’s first open commerce platform, Red101 Market, to unlock the full value of the traditional distribution chain and drive growth. With Red101 Market, FMCG brands can directly sell to distributors and merchants and collect digital payments on a single platform.

Our open commerce platform collates real-time sales data at POS from every merchant in the market, providing brands with in-depth insights into market demand and consumption patterns. The in-built market intelligence tool analyzes this data to generate actionable insights that sales and marketing leaders can leverage to identify growth opportunities and make data-driven decisions to maximize the opportunities.

We are also eliminating cash payments across the FMCG industry by empowering brands to receive digital payments for their merchants. To do this, we built the world’s largest local payment network with over 2 million pay-in points across 100 countries. This vast payment network ensures that merchants can digitize their cash quickly and make digital payments, even without a bank account. By enabling digital payments, we also provide brands with an up-to-date digital trading record of all merchants so they can identify the top-selling merchants and offer credit facilities that they need to grow their business.

The open commerce platform easily integrates with any existing ERP system and is easy to use. Sales and marketing teams can begin generating insights and increasing sales within a short while after deployment.  

Schedule a demo with us today to see how you can integrate open commerce with your existing tech solution, reduce costs by up to 25% and drive growth.

Decentralization and the future of commerce

Digital commerce has transformed the retail industry, with worldwide sales amounting to $4.28 trillion in 2020. The rise of e-commerce is disrupting traditional supply chains with the promise of enabling brands and sellers to reach more customers than ever. However,  e-commerce marketplaces like Amazon, JD.com, and Alibaba, which provide the greatest reach, are highly centralized and limit the growth of the brands who sell on their platform via heavy restrictions, algorithm changes, and price wars.

Digital commerce has transformed the retail industry, with worldwide sales amounting to $4.28 trillion in 2020. The rise of e-commerce is disrupting traditional supply chains with the promise of enabling brands and sellers to reach more customers than ever. However,  e-commerce marketplaces like Amazon, JD.com, and Alibaba, which provide the greatest reach, are highly centralized and limit the growth of the brands who sell on their platform via heavy restrictions, algorithm changes, and price wars.

Centralized platforms are killing commerce

The current e-commerce business model allows centralized platforms to exert undue control and act as gatekeepers with little or no oversight. Most e-commerce marketplaces require brands who sell on the platform to continually pay exorbitant fees, sometimes up to 30 percent on each sale to reach their ‘own’ customers – customers that do not belong to the brands but the marketplace.

Centralized platforms also limit the visibility of brands and sellers, preventing them from knowing who is buying their products and running targeted campaigns to drive sales to their store pages. Instead, sellers are stuck paying extra fees for marketing and advertising services they have no control over and cannot measure the ROI.  Brands and retailers are often forced to purchase warehousing and shipping services from the e-commerce platforms they sell on, as brands who buy these services are more likely to be chosen by the algorithm as the default seller of a product (known as winning the buy box), which is essential to generating sales.

These restrictions and extra costs eat into sellers’ already razor-thin margins, preventing them from growing their businesses or expanding into new markets. In the end, the platforms win, and brands lose. As more consumers switch to buying online, there is a need for a new business model in e-commerce, a decentralized model where brands and sellers ‘own’ their customers and can directly engage with them without competition or restriction from digital commerce platforms.

Decentralization and Open commerce – A match made in heaven

From challenge comes opportunity, and the rise of open commerce is changing the face of retail and commerce today, allowing new dynamics between brands, merchants, and consumers. The open commerce revolution is poised to disrupt commerce by decentralizing control and cutting out the middlemen, or “middle-platforms” who exploit their monopoly power over brands and sellers.

The open commerce business model provides unique advantages in commerce and the retail industry, such as:

  • Decentralized control on any platform, achieving consensus-based trust between brands, distributors, and merchants without undue restriction by a central authority.
  • Transparency on a fundamental level, as no brand or seller is artificially hidden from customers or prevented from selling by an algorithm.
  • FMCG brands, distributors, and merchants can connect directly, eliminating extra costs and layers of interaction along the supply chain.

Essentially, decentralized peer-to-peer connections on an open commerce platform gives power back to brands and sellers while also providing unprecedented visibility along the distribution chain. Unlike centralized commerce, where sellers are prevented from seeing who buys a product, open commerce platforms provide brands with access to valuable data at POS, enabling marketing and sales teams to monitor the micro-consumption patterns in the market and create marketing campaigns and trade promotions that drive sales and increases revenue.

Decentralized Finance, or DeFi, is a decentralized technology that is changing finance and commerce. DeFi can make transactions safer and faster, two factors that are invaluable to the success of digital commerce. By adopting this technology, businesses in emerging markets can share and securely store digital assets both automatically and manually while seamlessly handling customer activity such as payment processing, invoicing, record keeping, product purchases, and customer care – all of which are essential to increasing sales capillarity and driving customer satisfaction.

DeFi reduces the need for e-commerce stores to act as middlemen for every transaction and eliminates the need to go through the traditional banking system, a significant advantage in emerging markets where many merchants are unbanked yet have access to mobile phones and the internet.

By adopting a decentralized business model powered by open commerce platforms, the opportunities for brands and merchants to access a wider global consumer base is significantly enhanced and presents an opportunity for forward-thinking FMCG brands to tap into new and emerging markets.

Building a decentralized future with RedCloud

RedCloud is the world’s first open commerce platform, a decentralized solution that puts power in the hands of brands and merchants. For brands, RedCloud drives the digitalization of the supply chain by enabling any FMCG brand to onboard its sellers onto a platform that provides end-to-end visibility across the distribution chain without the control and restrictions of traditional e-commerce platforms. On the other hand, merchants who sign up to use RedCloud enter a digital ecosystem and gain direct access to global brands. This provides them with more products to sell locally at better prices and, given that many merchants are unbanked, the opportunity to build a digital trading profile for the first time.

Schedule a demo today to see how RedCloud is creating a decentralized ‘sell anywhere’ economy to help FMCG brands and sellers sell smarter, buy better, and pay simpler.