E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Targeting growth in emerging foreign markets, consumer packaged goods manufacturers like The Proctor & Gamble Co. are using web-based systems to connect with distributors and millions of independent retailers as well as retail chains.
The Procter & Gamble Co. recently deployed TradeEdge from Infosys, which has helped P&G fill more orders to retailers in emerging overseas markets.
TradeEdge is a cloud-based or Internet-hosted application designed to help consumer brand manufacturers connect with distributors and retailers in emerging markets, and get online reports of which products are selling and in what volumes, says Girish Ramachandra, vice president and head of products and platforms, consumer goods retail, at Infosys. In addition to getting direct information from retailers and distributors on what’s selling, the system can also use sensors that monitor information such as the temperature in store refrigeration sections, which can indicate whether a store is maintaining a manufacturer’s expected level of quality control, he adds.
“Visibility into distributor demand is a key driver to accelerate growth in the emerging markets,” says Andy Walter, vice president of global business services at The Procter & Gamble Co. “P&G worked with Infosys to co-created Distributor Connect, a system that “helps us connect with our distributors and facilitates easy exchange of information,” Walter says. “This has enabled us to gain significantly better visibility into our downstream supply chain, increase order fill rate and reduce non-productive inventory.”
One advantage TradeEdge offers over other technology systems designed to help consumer brand manufacturers view and manage demand in emerging markets outside of the United States and Europe is that it combines an effective mix of technology and services to help retailers in developing markets to communicate information on in-store inventory levels and consumer demand, says Michael Dominy, an analyst at technology research and advisory firm Gartner Inc. He adds that other demand-management systems are mostly geared to serve companies in developed markets such as the United States and Europe, where companies are accustomed to sharing data among retailers, suppliers and distributors.
“Companies can use TradeEdge to improve inventory turns and boost sales through improved visibility and coordination,” Dominy says. “For example, the consumer goods company may continue to produce an item that isn’t selling well instead of switching manufacturing over to another item that is selling very well and running low on inventory. The result is higher inventory of the slow-selling product and lost sales of the fast-selling product. To push the excess inventory of the slow-moving item the consumer goods company may offer promotions or trade funds which reduces margins.”
In the past year or so, Dominy adds, he has come across a number of consumer brand manufacturers looking for better ways of getting more “visibility, control and coordination” of products sold into emerging markets.
Sanjay Purohit, senior vice president and global head of products, platforms and solutions at Infosys, says TradeEdge is so far helping 10 global brands like P&G to “gain visibility into sales opportunities of more than $20 billion in over 70 countries.”
Infosys offers TradeEdge in either a licensed version or as software-as-a-service, Ramachandra says. He refused to reveal pricing for TradeEdge, but said it can be configured for use by small and as well as large companies.
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