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Reimagine the sales process. COVID-19 Rethink the distribution model. The
has accelerated the ongoing process of the pandemic is compounding subscale distrib-
digitization of sales. At this point, we utors’ growth challenges with higher costs
advocate a zero-based approach—looking of working capital and unfavorable eco-
at every sales role and activity to find nomics. Data clearly shows that bigger
opportunities for digital automation or distributors grow faster and invest more in
augmentation. BCG’s recent global survey their businesses than smaller ones do.
of companies in a variety of industries
found that roughly 80% of companies are Once they get through this period of short-
actively exploring ways to shift their term distributor support, companies need
go-to-market strategies away from in- to evaluate the scale, architecture, and pro-
person channels and toward digital ones. file of these partners. They also need to
critically evaluate the role of the tradition-
Companies must reimagine the entire sales al distributor.
process and answer the following ques-
tions: Companies need to reassess how well their
distributors are handling multiple activi-
•• Are these activities really needed? ties—such as servicing and breaking bulk,
secondary execution, retailer credit, collec-
•• Is there a way to handle them digitally tions, and local compliance—and whether
so they become more efficient and other players in the ecosystem could do
effective? the work more effectively. There are clear-
ly many inefficiencies in the way distribu-
•• Could existing solutions or partners tors carry out their business today—often
help with the reimagination process? relating to deliveries or order-taking at the
fragmented front end. Companies also
In our view, the answer to all three is a re- need to completely rethink the payout
sounding yes. Beyond the digitization of structures for distributors, taking into ac-
sales roles, companies may look to directly count the role they want each distributor
Exhibit 1 | Selling in Emerging Markets During and After the COVID-19 Pandemic
Respond Rebound
ROLES
to play and linking payouts to perfor- of COVID-19, and it isn’t the first time that
mance. a health crisis has caused consumers to
shop differently: there was significant and
The rise of B2B e-commerce players in sustained growth in e-commerce after the
emerging markets has been driven by the SARS outbreak in China.
belief that technology can make some as-
pects of distribution more efficient for both Companies should use this opportunity to
the companies trying to sell products and develop their e-commerce 2.0 business
their retailers. This is undoubtedly true. strategies. Many leading companies are al-
However, the use of B2B e-commerce plat- ready planning to grow their e-commerce
forms will force companies to think businesses, including for products such as
through a number of business model is- building materials and tires, which retailers
sues, such as: used to sell to in-store customers directly.
Product assortment and packaging, digital
•• How do we manage the inevitable marketing, merchandising, and customer
conflicts with distributors? service are among the areas in which com-
panies must develop capabilities to succeed
•• Should we create our own B2B e-com- in e-commerce in emerging markets. (See
merce platform or should we partner? Exhibit 3.)
•• How do we change our team and Optimize front-end sales spending. Com-
functions (including trade marketing panies have traditionally devoted a high
and sales) once we start using such share (from 20% to 30%) of the gap be-
platforms? tween consumer price and net revenue to
channel trade spend. COVID-19 creates an
•• Who handles the jobs of core activation imperative for companies to optimize their
and demand generation? highly fragmented, often mismanaged,
trade investments. They can do this by
Pivot to win in e-commerce. BCG’s recent taking the following actions:
consumer research shows a systemic shift
toward e-commerce. This shift isn’t surpris- •• Allocate trade investments differen-
ing, given the highly transmissible nature tially to win in priority spaces. The
Pricing and promotion Digital marketing through social media Logistics and supply chain
Online and offline pricing coordination Social media variety Route-to-market simplicity and
Promotion planning and adaption Management of key opinion leaders fulfillment model
Advanced pricing and promotion analytics and influencers Distributors that work exclusively in the
Management of reviews online channel
Advanced demand forecasting
idea here is to prioritize spends across points and free up capital for investments
SKUs and to analyze affordability, in disruptive opportunities.
brand strength, market share, and
competition on the basis of location. Explore digital partnerships. To address
customers’ expectations and new behav-
•• Enhance effectiveness of trade iors in the aftermath of the pandemic, a
spends. Companies must take a go-to-market approach that leverages
granular view of trade spend bench- digital technology is critical. Companies
marks across their industry in order to should creatively and carefully assess
both define their starting points and partnerships with logistics and delivery
identify areas of opportunity. Compa- providers, with B2C and B2B e-commerce
nies must clearly define output mea- businesses, with technology providers, and
sures for their spend objectives—an with companies in the broader ecosystem
increase in market share, absolute sales, to unlock value through disruptive ideas.
or weighted reach. The effectiveness of (In a recent effort, we identified 20 use
these spends should be clearly tracked cases that could unlock significant value;
with a dashboard; returns on invest- many of them would require partnerships
ments should be measured and en- with traditional and unconventional
hanced through analytics. players.) With reduced budgets and in-
creasing cost pressures, strategic partner-
•• Plug leakages. Our analysis across ships with other companies can be benefi-
multiple clients suggests that as much cial to all parties. Companies should be
as 20% of trade spends is wasted asking themselves what to build, what to
through leakages. These leakages can partner on, and what to acquire.
be plugged by the effective use of
technology including analytical rules to
ensure the correct classification of Preparing for an Uncertain
different retail segments. Future
There is limited certainty about the imme-
A structured approach can help companies diate economic future in emerging mar-
reduce the cost to serve by 200 to 300 basis kets. The recovery, when it comes, will like-
Namit Puri is a managing director and partner in the firm’s New Delhi office. He leads BCG’s global work
in go-to-market strategies in emerging markets. You may contact him by email at puri.namit@bcg.com.
Amit Mittal is an associate director in BCG’s New Delhi office. He is an expert on go-to-market strategies.
You may contact him by email at mittal.amit@bcg.com.
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