Trade Promotion Archives

Gynger- A New Way to Connect with Retailers & Influencers

O4S on September 7, 2021

Trade promotions are marketing campaigns designed to engage distributors and retailers to push sales. According to a research undertaken by Price Waterhouse Coopers (PWC), trade promotions hold the capability to add 10–15% to a company’s bottom line, along with 15% increase in ROI, and 3–5% improvement in operating profit, if executed correctly. Brands come up with innovative ways and lucrative rewards to catch the attention of retailers, distributors, and influencers who could influence the purchase preference of a customer. However, the key concern that arises here is the traceability around the flow of scheme information, performance, and effectiveness.

At present, most of the trade promotions are designed and executed based on assumptions made by the marketing team. A lot of times, the importance of having a concrete tool to measure performance is overlooked by companies. Despite significant expenditure on trade promotions, companies have limited visibility around their effectiveness. This is primarily due to the absence of tools to measure the efficiency of trade promotion schemes. Thus, reflecting the lack of a clear understanding and strategy formulation of the program. Evidently, there is no provision to measure the ROI on the expenditure. The situation is even more critical for companies dealing with multiple brands, huge product portfolios, and an extensive supply chain.

Considering the poor ROI on Trade Promotions, O4S has launched Gynger, a retailer and influencer trade promotion management platform. An important thing to note is that here ‘influencers’ refer to technicians, painters, plumbers, and electricians, among others. Gynger helps organizations digitize their trade promotions schemes to incentivize their Retailers and Influencers directly to maximize sales of their brands. Over the Gynger platform, not only can the organizations create and communicate schemes directly to the retailers as well as influencers, but they can also track the effectiveness of the schemes and ensure that the reward for incremental sales reaches the intended parties. In addition, it closes the information and incentivization loop between the Manufacturer and a Retailer/influencer by connecting them directly. Moreover, it provides a data-driven approach to running trade promotions.

Companies are under continuous pressure from intensifying competition to shrinking profit margins. With huge overhead cost- Trade promotions have become all the more important as the entire market is fighting for a limited share of the consumer’s wallet. In such a situation, trade needs to be lubricated better to push stocks in the market.

Invading the Opaque Wall Beyond Distributors with Next-Gen Technology

O4S on September 19, 2019

Organizations across the world are changing at breakneck speed, and so is the thought process of the customer. A decade ago, factors about the product’s origin and delivery systems were hardly given a second thought and almost no one was concerned about the supply chain as long as the product reached the end consumer.

This has changed over time, and everyone from the consumer to the company is now worried about different aspects of the supply chain. Customers now seek information and are inquisitive about the sources and systems that are involved in the delivery of their products. This evolving and changing consumer patterns have forced companies to think beyond the distributors.

It could ideally be argued that the transparency in the supply chain originated as a virtual side-effect of consumer concerns emerging from repeated incidences of counterfeit and poor-quality products. It is crucial to understand that the lack of transparency is equally challenging (and costly) for organizations, if not more. So, what has changed suddenly that forced organizations to start thinking beyond the opaque wall?

The Opaque Wall

Supply chains until now were the least of the concerns for the consumers. Even businesses were comfortable in having a limited view of their own sourcing methods and policies. The status quo about the source of good and their pathways were never questioned. This has led to a situation where even the top organizations are unaware of the fate of their products once it leaves the company-operated warehouses.

The various nodes across the supply chain are disconnected giving rise to a situation that does not work out best for the brand. In such cases, manufacturers have no means to control or track what happens to the product during the last mile of the supply chain. Once the product leaves the company warehouse, the company has no control over the product or the information that it receives about the progress of the product down the supply chain.

A distributor may not report the stocks back to the company leading to shortages at the retailers’ end. In another scenario, the distributor could be promoting one brand for better commissions by hoarding other brands. Since the brand does not know the product details in the last leg of the supply chain, it also does have any control over the products that are returned. Companies also do not get the consumer data which could have otherwise helped the brand streamline their marketing activities.

The opaque wall beyond the warehouse gives rise to problems that not only cripple the supply chain but also has the potential to hamper the very existence of the organization. Let us look at some of the common problems:

1. Maintaining Quality of Product: Since your organization has practically no knowledge of what happens to your product in the last leg of the supply chain, it is impossible to maintain the quality of the product. This is especially true if your supply chain deals with perishable and edible products.

2. Lack of Traceability: As we have already discussed, the lack of traceability is a significant issue that can have severe ramifications on your organization. This can lead to counterfeit products entering your supply chain, weakening of consumer trust in your company, and eventually impacting your sales and profits.

3. Lack of Communication: The lack of traceability does not affect just the organization but also leads to a lack of communication between various stakeholders involved in the supply chain. Poor communication leads to miscommunication and mistrust between various stakeholders which includes the customers too.

4. Rising Costs: To optimize and reduce the cost of your supply chain, it is essential for you to know your complete supply chain. Once you can track your entire supply chain, you can make improvements that could help in the overall reduction in costs.

5. Inventory Management: With the increasing number of SKUs and decreasing the time of delivery, inventory management has already become a difficult task for organizations across industries. The lack of knowledge of the entire supply chain is bound to complicate inventory management further leading to wastages, shortages, and disappointed end-users.

Although the concept of supply chain transparency is quite old, it is fast becoming an exceedingly significant attribute in the current global market. Through achieving transparency in the supply chain, businesses can effectively secure their reputation and establish trust by divulging information pertaining to the entire journey of the product.

Why Is It Crucial?

Enterprises have begun to realize that transparency in business is now more of an organizational effort and if neglected, can potentially affect multiple aspects of a value chain and not just the management of their supply chain. Sharing detailed information with the end-users and all the stakeholders involved in the supply chain has several benefits. It establishes a strong connection between businesses and consumers, builds trust, helps businesses react faster and more effectively, especially during any snags. Increasing transparency also aids in driving improvements as corporations can attain greater visibility across the supply chain.

By exercising transparency in the systems, stakeholders such as consumers, supervisory regulators, investors, and business leaders can voluntarily eradicate the opacity prevalent in the impervious supply chains of the past. Although the origin of a product is a quality that is imperceptible and not easily verifiable, it is an indispensable factor for many consumer purchases. For several products, this intangible trait is prioritized by consumers and an essential feature compared to available alternatives.

For instance, in almost all cases, an ethically manufactured item feels and looks indistinguishable from its sweatshop substitute, yet buyers care about its authenticity and integrity which is an undeniable fact. From the basic visual standpoint, there may not be a way to identify and distinguish food items like kosher, halal, and organic food items from their lesser alternatives, but they have clear distinctions from buyers’ perspective, thereby influencing their buying decisions.

An opaque supply chain can lead to massive risks arising due to instances of fraudulent product returns, management of inventory, counterfeiting, and lack of knowledge about the customer buying patterns resulting from lack of monitoring and tracking of end-user data.

Manufacturers can reduce these risks by working directly with retailers, eliminating opacity, and ensuring reduced oversight in the entire network. Closing hidden risks and information gaps by connecting the disconnected manufacturer, warehouse, distributor and retailer node is the only way forward.

The Solutions

To improve effectiveness and manage the expenditures in the supply chain, top logistics providers are regularly seeking new means through constant analysis. The incorporation of technology and transparency levers such as third-party data, collaboration across stakeholders, and real-time monitoring abilities have the potential to further strengthen the supply chain.

Product serialization is an effective way to track your product until it reaches the end-user. This also allows your customers to simply scan the QR code using any open source and check the authenticity as well as the journey of the product through the supply chain. This increases the trust customers have on the product and the organization.

At O4S, we employ machine learning technology to generate random Unique Identification (UID) codes for each product manufactured by a particular brand. This UID is then affixed to each product via a fully automated setup in the manufacturing facility using carriers like Encrypted QR Code, Optical Codes or NFC tags.

Additionally, retailer and distributor loyalty programs are an effective method to ensure that all the stakeholders are incentivized to share the data with your organization. With Gynger, O4S’s Trade Promotion Management Platform, you can instantly distribute the rewards using our software. This will result in instant gratification for the retailers, consumers, and distributors thereby increasing the efficiency of the loyalty management program.

Reward programs and loyalty schemes, if well-implemented could potentially result in a huge amount of data coming back to your organization. The information gleaned from these crucial insights into customer spending habits can be utilized in altering and suitably modifying marketing strategies.

It is important to bear in mind that is possible to achieve a robust and stable supply chain while reducing cost and mitigating the risks. Effective management and innovative technology can help your organization optimize the supply chain to meet the changing delivery standards. Adapting to newer technologies is the first step towards revamping the supply chain and staying ahead of the competition.

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Gynger- A New Way to Connect with Retailers & Influencers

Invading the Opaque Wall Beyond Distributors with Next-Gen Technology

The Opaque Wall

Why Is It Crucial?

The Solutions

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