Foodservice Trade Technology Wish List: Top 5 Needs

i n f o @ v i s t e x . c o m w w w. v i s t e x . c o m Vistex white paper Foodservice Trade Technology Wish List: Top 5 Needs Foodservice Trade is maturing as a strategic investment. However, most companies still need the technology systems and tools to plan, implement, manage and track the performance of their Trade dollars. Utilizing the data from a proprietary industry survey, this white paper explores the technologies Foodservice manufacturers need to optimize their Trade investment. In CloudOn-PremiseServicesSoftware i n f o @ v i s t e x . c o m w w w. v i s t e x . c o m Foodservice manufacturers have invested heavily in Trade. Today, more than 4 out of 5 companies have dedicated trade teams, a massive increase from the one-third who did in 2009. Companies that have invested in Trade have unlocked success in an industry experiencing constant change and consolidation, and have stolen market share from competitors. However, Trade is still maturing as a strategic investment. And the need for systems and tools to plan, implement, manage and track the performance of Trade dollars has become increasingly necessary. Many manufacturers still operate without the integrated systems needed to maximize programs, and with the amount of money being spent on Trade, this needs to change. Companies not already proactively addressing the urgent need for strategically managed Trade investment programs run the very real risk of succumbing to more astute competitors. Manufacturers are investing 19% of their total sales into Trade, which is their second largest expenditure aside from goods. Also, 84% of respondents to our recent survey, “Food Service Trade in 2015: Technology Systems are the ‘Missing Link’ to Optimize Trade,” stated that they employ a dedicated team, but still need the right technology to optimize their Trade programs. Only 7% of manufacturers are fully satisfied with their current technology systems to manage Trade, while just over half (53%) are somewhat satisfied. They believe their systems handle the tactical aspects, but fail to provide strategic insight like analytics and dashboard reporting. Manufacturers cannot maximize the return on their significant Trade investment without the right technology to run and support their efforts. Survey respondents shared their technology wish lists with us, and here are their Top 5 needs: 1. Integration with other systems 2. Reporting, including dashboards. 3. Unit-level visibility. 4. Post-program analysis. 5. Self-service analytics Integration with other systems Manufacturers want better integration between data from multiple sources. The disparate data you deal with on a daily basis creates confusion for you and your Trade partners. Without reliable information, you end up making decisions based on your gut, instead of data-based projections. And as the foodservice ecosystem becomes more competitive, making decisions based on anything other than soliddata is more risky. Having all the facts will enable you to employ a more informed decision process that your trading partners can accept, and that will maximize success. Too often discussions with Trade teams or supply chain partners focus on whose numbers are right, instead of anything valuable. Proper integration of all of your trade systems, such as ERP, CRM, planning, financials and marketing tools, ensures all participants have access to the right data, which enables them to focus on solving problems. And with a single source of truth for financial data, you can begin to assess the success of your Trade programs. Our survey found that only 32% of manufacturers currently perform ROI analysis, and that the majority are hindered by lack of data, lack of data integration or other limitations. An effective trade tool would present all parties with the dashboards, data and functionality to see key performance numbers in real time to enable performance evaluation and program adjustments to maximize ROI. This tool would help your Field Sales department perform time- consuming tasks, such as taking orders, collections, sampling and “ride-withs.” Asking them to access several tools to complete these tasks is unrealistic, because it cuts into the time they could be selling. Your field sales team would benefit from a single tool 2 Foodservice Trade Technology Wish List: Top 5 Needs 53% Somewhat Satisfied 40% Not Satisfied 7% Very Satisfied Satisfaction with Current Trade System Technology Source: Foodservice Trade in 2015 – Technology Systems are the “Missing Link” to Optimize Trade 1 i n f o @ v i s t e x . c o m w w w. v i s t e x . c o m While 65% of business is contracted, unit-level proof of performance data is not always available. 3 that integrates information from disparate systems, and works with your CRM to present a comprehensive view of performance and accurate reporting. With easy access to the information they need, they will be able to quickly identify and pursue the best sales opportunities. Instead of following the path of least resistance – selling to customers they already know – because they do not have the time to acquire new prospects. Having the right data will allow them to maximize the productivity of their limited selling time. Retail companies have found value in integrating third-party data like IRI and Nielsen to their transactional and claims data, which has provided richer insight into their customers. Foodservice has followed suit, cultivating similar data from companies, such as CHD-Expert and Datassentials. Properly allocating Trade spend is like placing a bet. And having the data on which to base your decisions gives you the best odds. If you understand the performance of previous promotions across the market, you will be able to use Trade funds more effectively. Reporting and dashboards Properly assessing the performance of your Trade programs can be time-consuming and tedious without the right technology. Your staff may spend hours compiling data from several sources and entering it into a single spreadsheet or system every quarter – or even every month. Without a clean, simple dashboard to view the data, uncovering actionable insights from the numbers can be challenging, and may take too long for you to act on them. With dashboards you will be able to quickly view and to identify exceptions and spot trends within the data, such as which region or product group is performing better than the rest. The ability to quickly recognize fresh opportunities and new threats, and course-correct before your competition, is an advantage in the marketplace, and an edge that will enable you to increase sales and grow your market share. Unfortunately, most tools do not offer this functionality. Today, most trade systems are used as tactical tools to simply create contracts, and to process and settle claims. Few third-party tools give you immediate visibility into information, aggregate claims, check for double- dips and identify operator unit locations. This functionality requires systems to both communicate and compile data into usable information – information that can be onerous to maintain. Another approach is to find systems that are natively connected, or better yet, a complete Go-to-Market solution. Whatever you do, the key is to have a complete tool. It should provide each user with the functionality and information they need, without burdening them with more than they need or providing them with too little to be useful. The selection process should include getting input from potential users so, in the end, you provide them with a tool that makes their jobs easier and more productive. Unit-level visibility In foodservice, the end of the supply chain is the consumer purchasing a meal from a single location. But most manufacturers don’t have the unit-level visibility to follow these consumer actions. Their trade tools only process summary-level data, making it difficult to spot double-dips, compliance problems and trends. This is unfortunate, because while 65% of business is contracted, unit-level proof of performance data is not always available. Consumers’ actions at the unit level are bellwethers that can signal significant change to come. Having access to this data is critical for crafting proactive Trade programs Unit-level data, for example, can reveal trends and help you determine if a seasonal decline in sales is due to encroachment by a competitor or simply because schools are on summer break. Unit-level visibility can uncover these opportunities and provide field sales with the information to secure incremental case sales in a mature market. This information also can enable you to track new opportunities and compliance issues, such as: ■ Customers that are approved to buy but are not buying everything they can ■ White space – Customers that are buying, but not all the products they could ■ Double-dips – Customers that are claiming more than once for a case of product Unit-level visibility is the holy grail of foodservice, and not surprisingly, is therefore hard to obtain. The key is to negotiate upfront with your trading partners. You are providing the funds for all trade programs, so you may be able to negotiate the data you need from them. However, there are a few caveats: Foodservice Trade Technology Wish List: Top 5 Needs 3 2 i n f o @ v i s t e x . c o m w w w. v i s t e x . c o m Trade spend on average accounts for nearly 20% of a manufacturers’ sales, and is the second highest expense behind the cost of goods. 4 ■ Do not ask for unit-level data if you cannot utilize it. You do not want to frustrate your partners who have to collect and send the data. And you do not want to slow your overall process with unneeded information. ■ It can be better to simply take what you can get from partners, knowing that you can improve the data over time, especially if you show them the value of the information. ■ Consider utilizing a data aggregation tool to provide you with a clean data stream from various partners. Post-program analysis Trade spend on average accounts for nearly 20% of a manufacturers’ sales, and is the second highest expense behind the cost of goods. Every manufacturer tries to turn this considerable expense into a strategic investment, but that requires the ability to identify which programs are working and which ones are not. Expanding successful programs and eliminating fruitless ones is particularly important in foodservice, where programs run on an annual basis, which amplifies their value or detriment. Can you afford to continue to invest dollars without knowing ROI? Without the ability to perform post-promotional analysis, you likely are running the same stale and stagnant promotions year after year. This gives those competitors who do analyze their promos the opportunity to boost program performance, maximize their Trade investment and cut into your market share. They do this by engaging in a collaborative, fact-based process with their trading partners that drives win-win negotiations and, ultimately, increased market penetration. Gaining post-program visibility is vital, but it is easier said than done. The most effective way is to negotiate program goals with clients up-front, to create a contract that clearly states expectations for both parties. Once this is done, you need a system to collect program data for analytics. Ideally, the technology should be able to input claims, automatically identify any components that are incorrect (wrong customer name, wrong product, wrong price, invalid contract), allow you to process what is approved, then investigate any exceptions down to the unit level. With that done, you will have all of the necessary data in-hand. But do you have the systems in place to analyze the data, the staff to conduct the analysis and the courage to discuss the outcomes (both good and bad) and act upon the results? You may discover you are maximizing the impact of your programs or, more likely, you will find that you are far from hitting the mark. Whatever you learn, it will help you make your programs better in the long run. Self-service analytics Foodservice manufacturers are searching for a way to reduce the amount of data requests each department (claim teams, sales, marketing, finance, production) receives from different parts of their organization. Often, each department keeps different data in different formats, making it difficult to compare, collect and use the information. Thus, responding to these requests becomes a monthly burden, and is rarely compiled into something useful in time to provide benefit. But with a tool that enables self-service analytics, every group within your company will have access to the data, and have the opportunity to understand how they impact programs, pricing and products. As we have discussed, access to the right information is vital to business success. Not only will it help you determine if your programs are successful, it will help you spot trends early so you can quickly resolve any issues or anomalies you discover. However, analytics is not simply numbers. It is numbers that tell a story and provide actionable insights to improve your business. The story leads to sales. For example, your field sales staff can use up-to-the-minute information on shipments, trade claims and payments to know exactly what clients need, and enabling them to move more product. They would also gain a distributor-level view of the contracted vs. street breakdown which would drive better negotiations on programs and prices. In foodservice, there is truth to the adage, “information is power.” Foodservice Trade Technology Wish List: Top 5 Needs 5 4 w w w. v i s t e x . c o m Solution ■Program Strategy ■Analytics ■ Implementation ■Post-Production Support ■Training ■Global Payments ■Program Administration Services i n f o @ v i s t e x . c o m ■Contracts ■Pricing ■Rebates ■Benefits ■Trade & Channel ■Rights & Royalties ■Performance Management ■Payment Make More. Keep More. Grow Smarter. 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