The Importance of Sell Out in the Fragmented Channel

La importancia del Sell Out en el Canal Fragmentado

The Importance of Sell Out in the Fragmented Channel

Sell Out in the fragmented channel refers to the sales of products that distributors and wholesalers make at independent points of sale, such as bars, restaurants, kiosks, and convenience stores. For manufacturers, having visibility into Sell Out is crucial to maximizing sales across this diverse universe of points of sale, as consumers base their purchasing decisions on the visibility, availability, and proper pricing of products—key factors for success that the manufacturer normally does not have direct access to.

Thanks to UVE’s Data Sharing-Analytics solutions, manufacturers and distributors can easily integrate their data, generate actionable insights, and collaborate closely to conquer the fragmented channel together. In the following article, we will explore the importance of Sell Out visibility and how it can transform the Route to Market strategy in the Fragmented Channel.

Understanding Route to Market in the Fragmented Channel

Within the Fast-Moving Consumer Goods (FMCG) industry, the fragmented channel encompasses a broad and varied network of sales points not organized into chains, such as bars and cafés, restaurants, convenience stores, kiosks, and local supermarkets. These points of sale are essential for getting products to consumers.

The fragmentation of this channel makes the intervention of distributors imperative, who act as intermediaries between the manufacturers and the sales points, ensuring that products are available for purchase.

Additionally, the existence of multiple points of sale with varying characteristics and potentials, along with the presence of distributors in the value chain and other factors such as digital disruption derived from e-commerce and order aggregators, adds layers of complexity to the Route to Market. This poses unique challenges for manufacturers.

From Sell In to Sell Out

A fundamental element for manufacturers when managing the complexity of working in the fragmented channel efficiently and effectively lies in the visibility of Sell Out. A clear and detailed view of distributors’ sales data at the point of sale allows companies to transform their commercial process, focusing on where consumers go and purchase products, and thus, managing the commercial operation based on Sell Out rather than Sell In.

The term ‘Sell Out’ describes the sale of products to final points of sale, contrasting with ‘Sell In’, which refers to the sale of products to third parties, such as retailers or distributors. In the FMCG industry, especially in the Fragmented Channel, it is crucial to monitor and make Sell Out visible for the success of any brand or company.

By making Sell Out visible, manufacturers obtain a clear view of the dynamics at the point of sale. This information is vital for evaluating the effectiveness of trade marketing and sales strategies, allowing companies to adjust tactics to optimize both sales and brand visibility.

Additionally, sharing Sell Out data between distributors and manufacturers can strengthen their business relationships, facilitating collaboration to improve product availability and customer satisfaction.

In summary, having data on Sell Out is key to:

  • Ensuring that products are available where and when consumers want them.
  • Identifying opportunities to introduce new products and adapt strategies to maximize the potential of each commercial action.
  • Identifying high-performing sales points and focusing efforts on market development.
  • Understanding the behavior and preferences of each customer.
  • Adjusting promotional tactics to maximize return on investment.
  • Reducing costs and optimizing inventory levels.

While the visibility and use of Sell Out data are essential for successfully navigating the fragmented channel in the FMCG industry, companies must face and overcome a series of significant challenges. From collecting accurate data to effective collaboration between manufacturer and distributor, each obstacle represents an opportunity to improve and optimize Route to Market strategies.

Overcoming Obstacles with UVE

In the process of optimizing the Route to Market, it is crucial for companies to adopt a proactive approach to address these challenges, defining a concrete data strategy and equipping themselves with the necessary resources to ensure the availability of high-quality data for analysis. In the following section, we will explore how technological solutions, such as those offered by UVE Solutions, can help companies overcome these obstacles:

  • 1. Data Collection and Standardization:

    One of the main challenges that companies face is the collection and standardization of Sell Out data from multiple sources. UVE Solutions offers an integrated platform that simplifies this process through Data Sharing, collecting data from different channels and formats, and converting it into a standardized and easy-to-interpret format. This ensures that companies have access to accurate and consistent information, eliminating discrepancies and improving data quality.

  • 2. Integration and Advanced Analysis:

    UVE Solutions technology not only collects data but also integrates and analyzes it, providing unique and actionable insights. With UVE’s advanced analytics solutions, companies can delve into Sell Out performance, identify trends and patterns, and make data-based decisions. This transforms data analysis from a complex and technical task into an accessible and manageable process.

  • 3. Agile and Strategic Responses:

    The ability to respond quickly to market insights is vital. UVE Solutions facilitates this agility, allowing companies to act swiftly in the face of opportunities and challenges identified through Sell Out data. UVE provides real-time alerts and data-based action recommendations, enabling companies to be proactive rather than reactive.

  • 4. Fostering Collaboration Among Partners:

    Effective collaboration between manufacturers and distributors is essential for optimizing commercial strategy. UVE promotes this collaboration through secure and efficient data sharing (Data Sharing), which helps align goals and strategies among partners. This improves the relationship between the parties and leads to consistent and successful execution at the point of sale.

  • 5. Compliance with Data Privacy and Security:

    In a world where data privacy and security are paramount, UVE ensures that all data operations comply with current regulations. This gives companies peace of mind that their data management is secure and in accordance with the law, eliminating one of the most significant challenges in managing Sell Out data.

  • 6. Adaptability and Constant Evolution:

    The FMCG market is constantly evolving, and UVE adapts to these changes, ensuring that companies not only keep pace but also anticipate future trends. UVE’s SaaS technology is regularly updated with new features, keeping companies at the forefront of innovation.

In conclusion, UVE positions itself as an indispensable partner for companies in the Fast-Moving Consumer Goods (FMCG) industry seeking to overcome the challenges associated with Sell Out. By providing advanced solutions for the collection, integration, analysis, and collaboration of data, UVE enables companies to transform the way they manage and utilize Sell Out data, leading to significant improvements in decision-making, operational efficiency, and market performance.

If your company is looking to overcome the challenges of Sell Out and maximize its potential in the FMCG market, considering a partnership with UVE could be the transformative step needed to move forward.

Success Case in the HORECA Sector

A well-known alcoholic beverage manufacturer was affected by the lack of visibility over the performancce of its distributors, which hindered the identification of the sales points with the greatest commercial potential.

Thanks to UVE’s Data Sharing solution, they were able to integrate the Sell Out data from their distributors and identify the sales points where their products were most in demand to develop targeted and precise commercial campaigns.
As a result, they experienced significant growth of 5.8% in global sales of their products and an increase of 12.8% in sales related to the strategic product of the campaign.

Do you need more information?

Get in touch with our team of experts and we will be delighted to answer any questions you might have