Launching Your Next-Gen Sales Strategy in Consumer Products

Consumer packaged goods (#CPG) companies face unimaginable levels of disruption today—overall strains from the pandemic and geopolitical conflicts, a more discerning consumer with increased expectations and needs given the cost-of-living crisis, and an evolving retail environment that requires higher #sales productivity. In this new landscape, it is critical to look at sales holistically, not only focusing on execution but also on portfolio strategy, marketing, and digital activation. While many CPG companies have lagged in applying AI in sales and unlocking productivity gains, a few are investing to uncover new sources of growth and efficiencies. Those that move aggressively now—investing in next-generation sales, an end-to-end digital approach to sales—can reap the benefits of elevated sales capabilities and gain a competitive edge.

Examples of CPG players around the world who have uncovered this new advantage include a snack food and beverages company in the US that drove a roughly 15% revenue lift by resetting its portfolio strategy (supported by demand mapping), a food distributor that doubled its sales reps’ productivity by transforming its sales model to a team-based model using advanced analytics, and a packaged goods company that achieved a 20–40% higher return on ad spend (ROAS) through optimization of e-commerce marketing.

Shifting Sales Landscape

Disruption doesn’t begin to describe the world of CPG today. Several industry factors are coming into play, shifting the sales landscape in which CPGs operate (Exhibit 1).

First, the pandemic and economic and geopolitical landscapes have led to a series of challenges that have made cost efficiencies and #resilient sales and operation planning focal points to unlock value. Not unexpectedly, consumer expectations and priorities have evolved given these challenges. With the cost of living, today’s consumers are more discerning about their overall spending. Additionally, over time, personalization, ultra-convenience, and augmented experiences have become more relevant, increasing the importance of AI and data usage.

Further, the retail environment is rapidly evolving, leading the way to a proliferation of nontraditional sales channels impacting ways CPGs can win through assortment, experience, and use of digital. Also, retailers are increasingly integrating sales and marketing functions to unlock opportunities in the consumer value chain.

Investing in Next-Gen Sales Capabilities

Now more than ever, CPG companies need to transform their sales functions and adapt to the evolving landscape. ?To thrive, CPGs need to make proactive investments across several capabilities, grouped into six core levers:

• Strategy: Leverage data and analytics to accurately understand consumer behavior and key drivers of purchase. Develop sales strategy and go-to market approach anchored on targeted consumer insights.
• Account management: Exchange insights and data with retailers to holistically assess assortment performance. Leverage assessment to optimize assortment, drive point-of-sale engagement, and incentivize shopping across multiple categories.
• Execution: Prescribe sales actions and prioritize accounts through AI-enabled tools, such as store-product recommenders and SKU-level assortment optimizers, driving sales based on product offerings personalized to customer needs.
• Distributor management: Develop real-time tracking of distributor relationships to enhance the coverage model, reinforce service level standards, and identify warehouse inefficiencies.
• Pricing and data: Upgrade core tools to leverage AI for pricing & promotions.?Create a greater spread of pricing across outlets to maximize profitability and sharpen promotional calendars to ensure volume and profit gains for both CPG and retail partners.
• ?Omnichannel: Create a cohesive experience along the customer journey across physical and online channels, clearly defining a strategy and guiding principles. Upgrade digital capabilities that effectively engage customers across key touchpoints.

To support core capabilities, it is critical to strengthen the organizations’ enablers by transforming the salesforce into fully integrated units and investing in talent attraction and retention. Further, it is imperative to build analytical and IT capabilities to automate and simplify business requirements (Exhibit 2).

In this evolving environment of disruptions, it is easy to become tactical, especially in sales. However, our experience indicates that successful companies take the necessary steps to assess their current capabilities and identify the areas with the highest growth and productivity potential. CPG leaders must determine the priority capabilities to invest in to best address their unique needs and challenges.

ABOUT THE AUTHORS

Elodie Teboul is a Managing Director and Partner based in Chicago. Carrie Littman is a Principal based in Chicago. Daniella Remolina is a Project Leader based in Chicago. Roberto de Angelis is a Managing Director and Partner based in Zurich.