Thursday, 16 June 2016

Playing catch-up: How to partner with the retailer of the future

There’s no denying that the balance of power in the consumer industry has tilted. Retailers have the advantage over consumer-packaged-goods (CPG) manufacturers—and retail buyers are deftly using their leverage at the negotiating table. Retail buyers are more sophisticated, more analytical, and more demanding than ever. Consider this: each of the top ten US retailers employs dozens of big data professionals who provide buyers with valuable insights. The same retailers have also hired more than 70 executives from European retail companies, known for having more aggressive negotiation styles than their American counterparts. In this increasingly adversarial environment, what’s a CPG key-account manager to do?

These changes in the retailer-manufacturer dynamic are the result of three trends that have been playing out in the US consumer industry: the steady rise of newer retail channels including hard discount and e-commerce, stagnant growth among the largest CPG brands, and burgeoning capabilities in big data and advanced analytics. The trends have been evident for a few years, yet in our experience the majority of CPG sales leaders are still largely doing things the way they always have. They continue to use the same key-account management (KAM) model and they haven’t enhanced key-account managers’ skill sets to keep up with the increasingly competitive business environment.

The future success of CPG sales teams rests on how aggressively sales leaders move to overhaul their KAM model and upgrade their sales capabilities. In this article, we discuss the most important changes that CPG companies will need to make. Companies that have implemented these changes have driven incremental growth of up to 3 percent above the category, while also reducing sales expenses.

Read rest of article here.

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