Outlet Classification in FMCG industry
Table Of Content
In the FMCG distribution business, it is crucial to classify outlets in order to prepare schemes & offers for various outlet classes. Outlet classification contributes to sales by enabling tailored schemes & offers.
Here we will discuss outlet classification for both new and existing businesses. New businesses have little or no data related to consumers, whereas established ones have data on their consumers.
When the business is new and has no data, Department Stores, Grocery Stores in busy markets & shops with double shutters fall into Class A outlets. Similarly, Class B outlets are those shops where we can partially enter into it, also called L-shaped shops. Likewise, those shops that are on the main roads and highways can also be put into Class B outlets. The rest of the outlets which are on the inner roads & streets are classified as Class C outlets.
For established businesses who have data, when it comes to classifying outlets, the 10-20-30-40 guidelines approach is often used. This approach is based on experience rather than hard and fast rules. According to this approach, the top 10% of outlets contribute around 40% of the sales value and are classified as Class A outlets. Similarly, the next 20% of outlets contribute to 30% of the sales value and are referred to as Class B outlets. The next 30% of outlets contribute to 20% of the sales and are classified as Class C outlets. Finally, the remaining 40% of outlets contribute to 10% of the sales and are categorized as Class D outlets. One thing that's interesting about this classification is that the percentage in the outlet column is 10-20-30-40, while in the contribution column, it's the opposite, 40-30-20-10. So we can see that sales are decreasing in the same proportion that outlets are increasing. These guidelines will be helpful for a salesman as they would give him proper knowledge to sell products according to the type of outlets.
But how can companies manage their customer classification information & keep their sales team updated?
Nowadays, due to the advancement of mobile app technology, field sales automation software is recommended. Using such apps can help in keeping all customer information including their contact details, geo-location, outlet class, and all other details in one place. This gives an edge to your sales team as they have all the necessary information on their fingertips.
It is also very important to choose the right Sales Force Automation App which suits your business needs.
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