Globalpraxis and artificial intelligence: Route-to-market for FMCG companies

Globalpraxis Partners

We have reached the last and probably most important element in our series on the impact of artificial intelligence on business. At Globalpraxis we know that we are on the cusp of the revolution that will continue to dramatically change the way we manage our businesses. For AI has emerged as transformative technology that is reshaping the way businesses operate, with route-to-market being one of the most heavily impacted elements of an organization.

What will be the benefits for FMCG companies?

First and foremost, data-driven route optimization. AI enables companies to leverage massive amounts of data generated both internally and externally. It is now possible to identify the best stores to visit by taking into account parameters such as sales history, potential for increased sales, out-of-stock situations, or promotional opportunities. By optimizing routes, FMCG companies can even improve the efficiency of their field sales teams.

Field sales optimization is crucial and can be achieved today with insights gleaned from all sorts of data. We have been pioneers in developing this approach with key global companies, even in fragmented channels where big data is seldom available.

The impact of AI is also noticeable in dynamic segmentation. This is fundamental in route-to-market as AI can constantly analyze store segments to identify the best-selling products in each segment, helping companies to offer customers the most up-to-date assortment while improving logistics and forecasting issues.

Intelligent retail activity optimization suggests specific actions for field sales representatives to take at store level. For example, AI may prompt sales representatives to analyze the root cause of a drop in sales at a particular store in order to offer a specific promotion, display, or marketing material. By focusing on points of greatest added value, the sales force will become more effective.

Another highly relevant feature of AI is the ability to support collaborative route-to-market. We have been focusing on this key strategy for years at Globalpraxis. AI facilitates the search for partnerships with complementary businesses, to expand reach and tap into new customer bases.

Some examples:

Unilever: Unilever has been utilizing AI in its route-to-market operations to optimize distribution networks, forecast demand accurately, and improve supply chain efficiency. By employing AI algorithms, Unilever can analyze vast amounts of data, including historical sales, weather patterns, and demographic information, to optimize product placement and distribution routes.

Procter & Gamble (P&G): P&G uses AI-powered tools to analyze consumer behavior, market trends, and sales data for optimizing its route-to-market strategies. By leveraging AI algorithms, P&G can identify the most effective distribution channels, tailor promotions to specific demographics, and fine-tune inventory management to meet demand fluctuations.

Nestlé: Nestlé employs AI in its route-to-market operations to improve inventory management, streamline distribution processes, and personalize marketing campaigns. By utilizing AI-powered analytics, Nestlé can forecast demand accurately, minimize stock-outs, and optimize delivery routes to ensure products reach customers efficiently.

Coca-Cola: Coca-Cola uses AI technology to enhance its route-to-market strategies by analyzing sales data, consumer preferences, and market trends. Through AI-powered predictive analytics, Coca-Cola can forecast demand accurately, streamline distribution routes, and tailor marketing campaigns to specific regions or demographics.

The future looks clear for us. FMCG companies should integrate and digitize their channel ecosystem partners across the RTM value chain. This will create common databases and ensure more control over third parties (intermediaries). The process requires a gradual digitalization plan, which helps companies to manage a smooth transition, permitting improvements and adjustments along the way.

With the right AI-assisted approach, FMCG companies can transform their route-to-market and achieve greater success in an increasingly competitive environment.