For Consumer-Packaged Goods (CPG) companies, ensuring planogram compliance at the store level is the best way to drive outstanding growth in stores and outlets where their products are present. But, covering different channels in different countries or continents to verify compliance is barely possible without opening the door to huge extra costs. Scratch that - was. Here are 3 key reasons why some of our clients use crowdsourcing and how they make the most of it.
First things first.
What exactly is crowdsourcing?
Do you feel like the term “crowdsourcing” is used in so many different situations that it has become more of a buzzword than a tool that companies can rely on?
We get it. Crowdsourcing is used in various ways because it enables the outsourcing of activities or expertise to crowds of individuals. That means there can be as many different types of crowdsourcing as there are needs for collaboration between people. And crowdsourcing doesn’t benefit individuals only; businesses can use it for many other purposes. Think about it; one of the first crowdsourcing platforms was Wikipedia. Now, we’re using crowdsourcing to fund businesses, help with product innovation; or even solve problems – eg. through specific ‘problem-solving’ open innovation platforms!
Simply put, crowdsourcing refers to generating knowledge, goods or services at a large scale and at low costs using a population of individuals (or crowdsourcers) who are connected and linked together through the Internet.
How can crowdsourcing be used in retail?
With new entrants making their way into the industry and disrupting traditional retail practices, CPGs must fight even harder to win the hearts and minds of shoppers while delivering sustainable sales growth in stores.
Every year, they spend a substantial amount of time and money trying to turn their vision of the perfect store into a reality, purchasing data by the millions and engaging in complex negotiations with retailers. With that much investment at stake, anybody would want to make sure that stores are compliant with agreement terms. To do so, CPGs conduct regular store checks to monitor KPIs. But, manual store checks are costly and time-consuming no matter if they are performed by sales reps, third-party auditors, or merchandisers. This is a major challenge for CPGs, one that can be tackled in a more innovative and cost-effective way.
Crowdsourcing has 3 undisputable benefits for data collection that can help CPGs stay ahead of competition.
What benefits can CPGs gain from crowdsourcing?
1. Lower costs and higher sales
The first benefit CPGs can gain from using crowdsourcing is a decrease in store checks spending. Let’s face it; not only are store checks long and painful for sales reps, but they are also expensive for CPGs which have to send their qualified field forces do repetitive and manual tasks. In addition, these lengthy compliance verifications leave reps little remaining time to sell to stores. Likewise, CPGs often pay for additional store audits to look out for any possible discrepancy with the checks made by their sales reps.
With crowdsourcing, you can knock these costs down. Stores already attract crowds just about anywhere and performing store checks requires little to no training, especially when CPGs look for insights on relatively simple KPIs. That makes it easy for anyone to become a crowdsourcer and provide CPGs with just about the same level of market insights they would get from their sales reps or merchandisers, at a lower cost. In addition to benefiting from a sharp and rapid decrease in store check spending, CPGs gain the most value out of their sales reps if they decide to use crowdsourcers. With fewer stores to visit thanks to the crowdsourcers’ intervention, sales reps can focus on building closer relationships with their strategic stores.
2. Greater coverage
Another direct benefit of crowdsourcing is the access and the unlimited reach potential this type of online platform provides to CPGs. Just like that, opportunities to cover specific points of sales (POS) at any point in time (i.e. on evenings and weekends) can be activated without tremendously impacting costs or requiring sales reps’ physical intervention! That gives them more time to focus on defined store segments and conduct longer, more complex checks while crowdsourcers cover Out-Of-Home or convenience channels, for example. We’ve observed this scenario with one of our clients, a multibillion-dollar consumer goods company, which has chosen to keep sales reps doing store checks in the modern trade channel but use crowdsourcers to cover traditional trade in one of their markets. Thanks to this mechanism, they gain market insights they otherwise wouldn’t be able to collect.
There are other scenarios where CPGs use crowdsourcing to expand their coverage. For instance, one of our clients in the tobacco industry make their sales reps conduct store checks in big cities and leave smaller towns to crowdsourcers to gain efficiency. Another one of our clients, a leading multinational American manufacturer, uses crowdsourcers for monitoring hard-discounters in one of their markets, a particularly difficult task to achieve as discounters often do not allow sales reps inside their stores. Thanks to crowdsourcing, CPGs collect and centralize more data from more POS, thereby increase their capacity to generate market insights and inputs for their strategy planning. And because more store data also means more robust and more customized recommendations to retailers of all kinds, expanding the scope of data collection is definitely a powerful advantage for CPGs using crowdsourcing.
Increased coverage and broader data collection can also be beneficial whenever CPGs need rapid visibility over specific events. For instance, one of our clients resorts to crowdsourcers’ services to increase the number of mystery visits conducted to monitor new product launches. As a result, they can benefit from the crowdsourcers’ inputs during in-store activations, an extremely sensitive step for CPGs that can determine the success or failure of a launch. Receiving ‘quick check’ KPIs such as out-of-stock, on-shelf availability, and pricing, directly from POS can enable them to rapidly spot and correct any potential gap in store.
3. MORE MARKET INSIGHTS TO DRIVE SALES
With extensive data retrieved from the field, CPGs can benefit from more market insights to measure product performance. They can spot trends much more effectively and channel their efforts to address strategic locations and pain points to increase sales. They can also gain valuable knowledge on their competitors’ KPIs. In other words, they become more agile and ready to adapt to the rapidly evolving retail environment.
That means crowdsourcing enables CPGs to magnify the scale of their data collection activity while giving them greater insights on specific stores or regions which they can use to act on locally. But just like with any manual check, crowdsourcers face the same accuracy issues as sales reps and merchandisers. Studies have shown that manual checks have an average accuracy rate of 80% to 85%, and while we can assume that this rate can be a little higher if crowdsourcers conduct simpler checks than sales reps, a 10% to 15% accuracy gap can still profoundly hurt retail execution targets.
So, how can CPGs take the benefits they gained from crowdsourcing a step further to drive their growth?
Here’s our tip: bring image recognition into crowdsourcing!
To win in outlet execution and unlock sales opportunities, CPGs have to take the gamble of thinking and acting out-of-the-box. Crowdsourcing is a step forward in this journey. Combining crowdsourcing’s strike force with the power of image recognition is a quantum leap. Relying on advanced artificial intelligence techniques, namely deep learning, best-in-class image recognition solutions are the perfect complement to crowdsourcing. First, image recognition makes data collection easier. By simply taking pictures of shelves, crowdsourcers can provide CPGs with all the insights they need for their products as well as for their competitors’! But there is more: best image recognition solutions in the market claim accuracy rates ranging from 95% to 98%, i.e. 10 to 18 points more than manual store checks! Cherry on the cake, those levels can be achieved regardless of who collects the data (crowdsourcers, sales reps, merchandisers), because image recognition de facto assumes a standardized way of measurement. Last but not least, integrating a crowdsourcing application with an image recognition solution allows crowdsourcers to benefit from a seamless experience while enabling CPGs to make the most of both worlds and winning in-store via execution that drives shopper off-take.
That’s why leading crowdsourcing solutions such as Roamler and Field Agent have decided to partner with us, and why some of our clients chose to test this holistic approach:
"Trialing an integrated crowdsourcing-image recognition solution with Roamler for measuring Perfect Store versus using our core field agency proved very powerful. It showed that the audits provided by crowdsourcers were as reliable as our core team’s. This is useful to us, particularly when we want to get to stores beyond our regular scope.” Alison Knowland – Retail Execution Strategy and Operations Manager at Unilever
“We are very happy with the Planorama data & insights. We have a strong data reliability as we are using crowdsourcing to expand our store coverage. We have great actionability as we can use the Planorama digital measurements on both a national and store level. With the data we can create a national scorecard, but also root cause what are the driving the numbers up to store level data and instore pictures.” Joyce Hoekstra-Klumper – Corporate Market Strategy & Planning Manager at Procter & Gamble
As the European leader for field marketing crowdsourced solutions, Roamler manages a crowd of more than 450,000 individuals spread across Europe who collect insights, execute retail audits, and perform merchandising activities. Operating with the largest FMCG and CPG producers, Roamler interfaced their platform with Planorama’s image recognition solution.
“As stand-alone services, crowdsourcing and Image recognition are already very powerful for CPG. When combined, they bring even more value. The granularity of insights increases substantially, the field-reps are relieved from their data-collection activities and can focus on their core activities (sales) while the outlet coverage gets bigger at the same time. Especially when applied in structural e.g. perfect store programs, this proves to be the most efficient and effective solution for all involved.” Martijn Nijhuis – Co-founder of Roamler