Digitalization of the Traditional Channel: A New Paradigm for Companies

Digitalization of the traditional channel is transforming commercial strategies in mass consumer goods companies. This digitalization traditional channel approach marks a new era, particularly for areas that have already embraced technologized processes. However, the traditional channel remains an area of opportunity that has not been fully optimized.

What happens when the traditional channel is not digitalized? How can digitalization traditional channel strategies enhance efficiency? Why are machine learning tools essential for boosting sales and streamlining processes?

Digitalization Traditional Channel: Rethinking Commercial Management

The traditional channel often operates with informal product replenishment and sales processes. Its low level of technologization means planning and demand estimation are limited. Many neighborhood stores lack even basic invoicing systems. These challenges pose several obstacles:

• Sales representatives have less than 10 minutes per visit in each traditional channel store.
• Communication between the company and traditional channels is inconsistent. There is no unified feedback on needs or stock levels, leading to a diluted commercial relationship. When salespeople leave, it’s difficult to rebuild trust with store managers.
• Inefficient sales routes prevent completion of 20% to 45% of sales.
• Traditional channels lack access to an updated catalog, resulting in 30% of SKUs not being purchased.
• Customers are unable to track orders, leading to misunderstandings and missed trends.

However, digitalization traditional channel opportunities abound. Applying technology and machine learning to data analysis can greatly enhance decision-making and strategy. This benefits both shopkeepers, who have better-stocked stores, and CPGs, which see increased sales and improved key performance indicators.

Neighborhood stores have thrived during the pandemic in Latin America. In Chile, they account for 41% of consumption, while in Mexico, 56% of the population considers them reliable. In Argentina, 80% of consumers shop there regularly.

Sources: Anda, América Retail, La Nación

Transformation Through Digitalization

Digitalizing the traditional channel resolves many challenges. New technologies enable data collection, analysis, and visualization, turning them into valuable resources for mass consumer goods companies. Moreover, digitalization traditional channel strategies provide measurable benefits.

Access to data and metrics through online reporting allows for precise actions. For instance, if data reveals certain SKUs are popular in specific areas, companies can adjust strategies like pricing or promotions accordingly.

For shopkeepers, digitalization offers clear advantages:

• They can easily manage stock, explore product varieties, and place orders online.
• Access to updated product catalogs and the ability to give feedback to suppliers become straightforward.
• They can anticipate demand changes and enhance product rotation based on successful trends in other stores.

Harnessing Machine Learning and Automation

In parallel, machine learning systems provide intelligent recommendations. As the platform is utilized, it learns from usage patterns, enabling predictions tailored to each customer’s needs, including quantities and product types.

This personalization enhances efficiency in ensuring supply and redefining strategies within the traditional channel.

Automation based on AI could boost global productivity growth by 0.8 to 1.4% annually.

Source: McKinsey

New Commercial Experiences

Implementing digitalization traditional channel strategies in CPGs creates vital commercial experiences. These experiences help in understanding business behavior and personalizing actions to maximize profits.

Such systems enhance customer communication, building trust and loyalty. Simultaneously, they optimize sales processes and provide key data for informed decision-making. For further insights into enhancing your sales strategies, visit the Yom platform page. Additionally, discover how AI-driven personalization can improve your marketing with insights from Yom’s marketing strategies. Explore solutions for expanding sales through digitalization at Yom’s growth solutions.