How to Identify the Right Outlets to Sell More the Hersheys Way

With thousands of outlets in a single city/town, it’s a tough act for consumer companies to cover as many outlets as possible and service the top 10-20% of key outlets that give 60% sales. In such scenarios, it becomes imperative to optimise the salesperson’s time and effort to ensure the brand’s SKUs are visible and available in as many outlets as possible, ensuring the highest throughput possible.

At the same time, it is critical for consumer brands to reach the right store in emerging markets like India. Studies have shown that 80% of FMCG sales are generated by 30% of the stores. It’s, therefore, inevitable that consumer brands identify and prioritise such outlets while planning their distribution strategies. 

While finding the right outlet is the first step towards sales efficiency, availability and visibility are at the heart of sustained sales growth. The two drivers of availability and visibility enforce consumer brands to service the outlets directly and frequently, ensuring the right assortment and actual visibility of products. At such outlets, the quantity and quality along with placement are critical decisions for the brands. In fact, some studies show that an increase of one SKU can lead to a 9% increase in sales. 

How to Identify the Right Channels and Outlets

Identifying the right channels start with benchmarking the channel partners including the distributors and the retailers.

Distributors can be benchmarked with respect to the population data of the vicinity that they serve. Their performance can be measured by the fill rate or turnaround time in terms of inventory replenishment or even inventory turnaround ratio. 

Identifying the right outlets needs a different approach. It’s a known fact that if there are 10 outlets in a particular area, not all those 10 outlets are actually of the same weightage. Of the 10, some will enhance the brand’s reach while others may not and can be categorized as not important for the brand. Also, the kind of consumers serviced by the outlet is important. Is the brand relevant for that particular target group? It’s important for brands to benchmark not just against the competition but also forecast the performance of their products among the target group of their outlets.

When Hershey India wanted to expand its market reach, it leveraged its positioning as a premium brand to increase the depth of distribution. Rather than trying to be present everywhere, it decided to sell more in each outlet. This meant that it needed to identify the right channels and the right outlets for their products. To make the analysis, the Hershey team needed data on their current outlets – where they were selling, what they were selling and how much they were selling. 

The brand identified the right outlets with Bizom’s sales automation tool and was able to measure the potential of individual outlets and categorize them as different grades of priority outlets by applying Bizom’s insights. It then increased the drop size and share of the shelf to leverage the sales potential of the outlets. To continue boosting the sales push, the brand used Bizom analytics on the effectiveness of trade promotions to design effective loyalty programs for channel partners.