A joint research by DKSH and Smollan reveals that, while the Taiwanese offline retail sector shows healthy growth, blurring boundaries between the retail channels make end-consumer reach more challenging. Maximizing the shopping experience with the help of digital in-store solutions is key for future success in the Consumer Goods sector.
Taipei, June 13, 2018 – The Taiwanese retail sector undergoes fundamental changes, with a much broader array of shopping channels available than just one decade ago. However, retail sales in Taiwan continue to expand, with a solid 4% in 20171 – driven by the hypermarket, supermarket and convenience store segments, but also via e-commerce. Still, more than 90% of retail transactions are generated through offline channels.
There is a recent trend of Taiwanese shoppers increasingly buying convenience and premium products. Convenience stores like 7-Eleven and FamilyMart gain popularity, while hyper- and supermarket chains open smaller supermarket-type stores (Carrefour Express, MyRT). While consumer visits to retail outlets have generally decreased, average spending per visit has significantly increased in most of the offline channels (+4% in hypermarkets, +5% in supermarkets Q4 20172).
Maximizing the shopping experience in-store is therefore key for a successful retail execution. Research shows that globally, up to 70% of shopper decisions are made in-store, and 20% of shoppers make impulse and unplanned purchases. For 28% of the products, the choice which brand to buy is usually not made before reaching the store. Finally, one in ten shoppers will change to another brand inside the store.
For 60 years, DKSH has established a successful business model in Taiwan’s Fast Moving Consumer Goods (FMCG) retail market. The company has helped local and international brands looking to launch their products and to expand their market share in Taiwan by providing an integrated service portfolio along the whole value chain. This includes marketing, sales, distribution and logistics services.
Given the more competitive retail environment, field marketing in the last mile of the value chain has become an integral component for DKSH over the years, as it converts shoppers into buyers and helps drive sales for its clients. DKSH is active in field marketing through its joint venture with Smollan, the largest global field marketing organization with over 80 years of experience. DKSH Smollan also leverages Smollan’s in-house digital technology to collect valuable data and analytics, which DKSH can act upon to optimize growth for clients. The joint venture has been present in Taiwan since 2011 and currently serves around 140 clients.
Field marketing – the secret formula to increase sales and market share
To increase market share in this challenging environment, FMCG brands can choose to launch new products or expand to more outlets or online channels. These however require significant R&D and marketing investments, while space on supermarket shelves is often limited. Despite the growing popularity of e-commerce platforms, the clear majority of FMCG sales is still transacted in physical points-of-sale.
Therefore, it is extremely critical to optimize the supply of existing products in the retail space and to maximize the retail availability and visibility at every opportunity. The field marketing team plays a crucial role in being the enabler between FMCG brands and retailers to help both parties drive an optimal end–to–end supply of products to shoppers.
DKSH Smollan is one of the largest field marketing providers in Asia with more than 4,200 employees covering 65,000 stores in ten countries. In Taiwan, more than 150 DKSH Smollan field marketers service around 15,500 retail stores.
The Smollan Mobile Technology provides FMCG brands access to valuable data analytics
The Smollan Mobile technology is a central element of DKSH’s field marketing activities, leveraging technology to capture critical data on in-store performance of its clients’ products. Field marketers are equipped with this application on a smartphone device to use in modern trade stores. The captured information is used by DKSH’s key account and sales teams to optimize growth for their clients:
Increase on-shelf availability and visibility: Research shows that globally up to 70% of shopper decisions are made in-store, and 20% of shoppers make impulse and unplanned purchases. In Taiwan’s competitive retail environment, improving product availability and visibility in supermarkets is one of the keys to success. The generated on-shelf-availability and out-of-stock reports indicate the status of available products in retail stores. DKSH can then liaise with the retailers to identify the root cause for out-of-stock issues (e.g. stocks may be stuck in the retailer’s distribution centers, or the stocks in the distribution centers have run out and need to be replenished) to ensure there is close to 100% availability of clients’ products in store at any given time.
Track success of planned promotions and drive ROI: On average, only 70% of all in-store promotions by brands, such as product displays, are executed as planned. Smollan Mobile enables field marketers to review the execution of all active promotions, to intervene in a timely manner to improve the execution and therefore, to improve ROI of the promotion investment. Active usage of Smollan Mobile has led to no less than 30% improvement in in-store staff attendance.
Smollan Mobile reporting: All the information captured in the field is sent to DKSH in the form of daily, weekly or monthly reports. These reports are fully customizable according to each clients’ needs, for example, to track the performance of promotional campaigns and new product launches, or to monitor prices and promotional activities so as that they can formulate an appropriate strategy. Smollan Mobile has led to a 21% increase for our clients in shelf health metrics, such as planogram compliance, price indicator, report management and shelf hygiene standards.
In the latest innovation release of the Smollan Mobile technology, DKSH Smollan has introduced live GPS and mapping features, allowing the DKSH Smollan field teams to dynamically plan and optimize their route plan, considering the actual traffic and store service requirements at any time. Aside from this, live in-app reports allow the field teams to view the actual in-store activities and to track the store’s ongoing performance.
“DKSH has been present in Taiwan for 60 years and we can truly say that we are part of the Taiwanese’s everyday lives. We make sure that the most popular consumer goods are available on retail shelves – be it Duracell, OldTown White Coffee or personal care products from Kosé. We are at the forefront of the industry when it comes to digital field marketing technologies. We maximize the shopping experience with the help of digital in-store solutions and ensure shelf-availability to consumer brands by providing them with smart data to track their key performance indicators”, said Frank M. Koch, Vice President FMCG, DKSH Taiwan.
“Field marketing enables the last mile of DKSH’s end-to-end supply chain, where shoppers get access to thousands of products from its clients. Our field marketing activities are based on three key pillars, namely in-store execution, technology and reporting as well as brand activation, to turn shoppers into buyers and, ultimately, drive sales growth for our partners”, said Bryan Fu, General Manager, Field Marketing Taiwan.