Tracking Secondary Sales Data for FMCG Brands

The Strategic Methods FMCG Companies Employ to Monitor Secondary Sales Data

Fast-Moving Consumer Goods (FMCG) companies employ various methods to collect tertiary sales data, essential for understanding product performance at the consumer level. These methods include leveraging technology solutions such as point-of-sale (POS) systems, distributor management systems (DMS), and direct retailer reporting. Additionally, companies often utilize electronic data interchange (EDI), mobile applications for sales representatives, and integrated software platforms to capture sales data from retailers. Third-party market research firms and data aggregators, such as Techsalerator, also play a crucial role in gathering and analyzing sales data across different retail outlets.Smart FMCG companies often use back calculation to estimate tertiary sales. By knowing the amount of stock sold to distributors (primary sales) and the stock sold by distributors to retailers (secondary sales), they can approximate the stock levels at retailers based on historical sales data. Tracking secondary sales is vital for companies to get a real-time pulse of their performance.To track secondary sales, most FMCG companies use specialized software installed at distributor points. Primary sales refer to sales from C&FA to distributors, secondary sales are from distributors to retail outlets, and tertiary sales are from retail outlets to customers. Each distributor maintains store-wise sales data for every product, with the software capturing SKU-wise sales at the retailer level. For

example, if there are 25,000 retailers in Delhi, the distributor's software will capture sales data for all these retailers, syncing the data daily to the company server. This system provides detailed insights into SKU billing, outlet-level sales, and other critical metrics.

For Tertiary Sales Data Collection in India FMCG companies collect tertiary sales data primarily through a Retail Panel. Unlike many Western markets, where modern supermarkets dominate, less than 10% of Indian FMCG sales occur through such channels. Instead, a vast majority of urban sales come from individually owned stores, known as kiranas or general stores. Each product sold in modern supermarkets is barcode scanned, creating a data point. Supermarket chains then sell this raw data to companies like AC Nielsen and IRI, which aggregate, analyze, and organize the data before selling it to FMCG companies.

Collecting data from over three million kirana stores in urban India is nearly impossible. Therefore, companies like Nielsen operate a retail panel representative of the entire market. The exact size of this panel is confidential, but it is estimated to include around 20,000 stores across various states and demographic localities. This panel data is then used to project total market size, market share, and other critical metrics for the Indian FMCG sector.

One of the World's largest chocolate and snacking companies have implemented a comprehensive system to track secondary sales in India. The primary sales in this case were sales by the company via Clearing & Forwarding agents (C&F) to Regional Distributors (RD), and secondary sales were from RD to stockists and retailers.

To streamline data collection, the company invested heavily in upgrading its IT infrastructure, building an ERP platform for Distributors and sales teams. All invoicing from Distributors had to be done through this ERP, readily capturing secondary sales data. Transitioning Distributors from traditional manual invoicing to standardized, software-generated invoices required significant effort. The company managed this transition by moving to a 'company managed inventory' system and incentivizing Distributors for using the ERP. This meant that stocks at RD warehouses were monitored and replenished by the company through automated billing from C&F agents, eliminating the need for Distributors to place orders traditionally.

Additionally, the ERP system was configured to automatically process regular payouts to Distributors based on secondary sales targets. This provided a financial incentive for Distributors to actively participate in the new system. As a result, the company now collects secondary sales data through 5,000 Distributors across India, with the Management Information System (MIS) monitored by sales teams in real time.

As per the Modern Sales Tracking Methods In today's competitive market, leading MNCs have equipped their sales force with handheld devices for recording sales bookings and daily activities. This approach allows for real-time data collection and analysis, offering the closest approximation to optimal sales tracking.