If you scan the trades daily like I do, most of what you hear from earnings calls today goes something like this: “We have redeployed our On-premise assets and are focused on the growing e-commerce channel, increasing resources and focusing on digital shelf management”. The impact of this includes a reality that some positions will never come back and redeploying marketing dollars in support of digital commerce channels vs traditional wholesale is a certainty. How will this and the new environment impact your 2021 plan? You already know the process will look very different than prior years.
We are fortunate to have an ongoing dialogue with our trade, supplier, distributor and agency partners who are on the front lines of navigating these waters. Whether you have completed your 2021 plan or are in the process, we wanted to share a summary of what we are hearing on the implications of creating the right plan to achieve your 2021 goals. Much of what we heard is not new, as there continue to be absolutes in our industry. We’ve organized the feedback we gathered into sections for easier reading, a range from general considerations to impacts by channel.
Considerations for Your 2021 Plan
If your plan is focused on Historical Data, the environment that created it has shifted – fair to say it may not exist any longer! Consider mapping that same Historical Data with how the consumer, and maybe more importantly, how trade buyer decision making has changed.
Is your sales team empowered with the right tools to pivot from what was used to be very transactional (historical relationships and sense of loyalty, etc.)? Today’s buyers place less value on that metric than ever before. With precious few resources available, one must invest in positioning the right brand in the right channel.
According to the Wine Industry Financial Symposium’s annual executive survey, almost 49% of the 130+ respondents said they’re spending more on digital by reallocating other marketing resources. Another 18% said they’re spending more on digital while maintaining other marketing spend. What impact will the expanded emphasis of 3-tier e-commerce have on the trade, distributor partners, brand focus/spend and prioritization?
Recent webinars from industry leaders have confirmed a growing commitment from multi-state distributors of huge increases by retail trade in utilization of their 3-tier e-commerce platforms. It seems they also satisfy the need to provide ample resources for their business-to-business and business-to-consumer channels such as Drizly and Instacart. Platforms such as RNDC’s eRNDC, Breakthru’s e-com, and SGWS Proof Online, allow accounts to place orders 24/7, easily reorder, view account and invoice information, collaborate with reps on favorite items, and review and track deliveries. Does your 2021 plan include redeploying incentive and on-premise spend to activities that can drive this channel?
If you aren’t getting the same attention in this changing market, is it simply a factor of not having salespeople on the street? It may be a sign of a larger issue, one that was masked by the expanding market over years. Is it time to explore smaller distributors or alternatives that can make your products a success?
National, Club, and Chain Channel
As distributors migrate an increasing volume of orders to their order portals (e.g. eRNDC), there is less chance of non-authorized products making it to a menu or shelf. However, this may mask the ability to confirm compliance, promote volume or a brands longevity.
Due to growth in the channel and unique needs vs the broad market, larger organizations have developed dedicated e-commerce divisions. Every 2021 plan must include a clear understanding of those needs and the ability to deliver on the basics at a minimum.
At best, historical data can be a guide for 2021. Your plan has to deliver enough value to the right brands and accounts that will achieve your goals. E-commerce is now a convenient standard, not an alien concept. Many in the industry have been forced to adapt, more quickly than they would have liked. Ensure your plan includes a process and funding to impact this at the partner and trade level.
Both distributor and supplier representatives must make the hard decisions on which brands to prioritize. There is simply not enough bandwidth to support every brand’s activity, volume, POD, or velocity objectives. Learn to choose wisely and maximize the available support on the greatest opportunity brands.
Be transparent with your partners, use scorecards and analytics to determine the potential for success and the cost of supporting a relationship that cannot, in the current climate, be mutually beneficial. Maybe it’s time to consider acting on available alternatives. Spend wisely, as consumer pull trends are driving super premium and comfort brands, and make sure you are spending strategically on those likely to succeed.
In closing, I think we can all agree with W. Edwards Deming’s quote: “Change is not necessary, but neither is survival.”