The established route to consumer markets in the western world is via the major retail groups. The main consumer brands have to go through these multiples if they are to reach their target customers. That structure simplifies matters greatly for the brands although it places an inordinate level of power in the hands of multinational retail groups.
The developing world is very different, however. Retailers that are household names in Europe and America have almost never been heard of in much of Africa, Asia and Latin America. Instead, it is the traditional corner shop and sole traders who hold sway in the retail marketplace.
This presents considerable challenges for the brands, which must deal with tens if not hundreds of thousands of individual retailers instead of a few handfuls of international chains. Irish company Brandtone has developed a solution to this problem with new technology that allows suppliers and retailers to exchange orders and sales information using smartphones as well as old-tech GSM mobiles.
The genesis of the new technology can be traced back six years to the establishment of Brandtone and its initial product offering, according to chief product officer Dervilla Mullan. "The traditional channels don't actually exist in the developing world," she says. "There it's mobile. The mobile phone is even more indispensable there than it is here."
Brandtone identified a need among the major brands to reach out to consumers without allowing intermediaries such as retailers to own the relationship. This saw the company develop campaigns for some of the world’s largest brands where consumers were invited to interact with messaging on product packaging in return for rewards.
These rewards varied from money off coupons to highly desirable mobile phone credits. “Our campaigns have generated millions of customer engagements for our clients in 14 markets in the developing world,” says Mullan. “It’s a win-win for both the consumers and our clients.”
Brandtone has since grown to employ 130 people in Ireland and those 14 markets. It has now moved onto a new product offering – Brandtone Trader, which uses mobile technology to facilitate a variety of interactions between brands and traders.
“Our clients told us that our system could be even more valuable with traders than it was with consumers,” Mullan says. “The route to market in these countries is incredibly fragmented and informal. Sometimes a company doesn’t have visibility on how a product gets to a mom and pop store somewhere.”
Relationships with traders
Initially, the plan was to replicate what had been done for consumers but it quickly evolved from there. “We wanted our clients to use it to develop much more structured relationships with traders: to set targets and monitor performance; to offer rewards for meeting targets set against certain key performance indicators (KPIs).”
And these KPIs don’t have to be simple volume-based measures. They can involve selling more of one certain product within a portfolio or gaining a greater market share versus specific competitors.
And the Trader platform offers much more than structured communications between buyers and sellers. It is also a powerful market analytics tool. The platform can take sales data for a region or territory from distributors, aggregate it and carry out deep analytics on it. This allows for the creation of individualised marketing plans and targets for traders with personalised rewards matched to the trader’s particular needs and circumstances.
For example, a shop owner may appreciate a discount on future orders while a trader who is out on the road selling from the back of a van or car might place a greater value on telephone air time.
“Before this, our clients had no real connection with the end traders,” says Mullan. “We have completed this last mile for them. They can now connect directly with the traders via smartphone or GSM messaging.”
Client reaction has been hugely positive. "We have seen phenomenal performance in the first year," she says. "We launched it last year and all of our major clients have adopted it. In Russia one of our clients reported a 13 per cent increase in sales since starting to use the platform and another client in Colombia reported a 7 per cent increase. We can demonstrate how Brandtone Trader helps traders to exceed all KPIs. It's very easy to see the value of the platform in terms of return on investment and sales uplift."
The potential for the platform is not limited to retail sales, however, and Brandtone has been in discussions with some non-governmental organisations in relation to its application in other spheres. “Some NGOs work in partnership with commercial organisations to deliver their services. The trader in a village in the developing world is not just the guy who sells corn flakes, he plays a pivotal role in the community and connecting with them can be very important.”
Brandtone chief executive Donald Fitzmaurice points to the future potential for the platform. "It's like Ireland was 50 years ago. Independent traders make up 90 per cent of the channel in these markets. They are strong, independent and successful – and our team in Ireland and out in the markets have created a platform which is enabling our clients to engage and to build relationships with them. This is creating significant value for our clients and there is enormous potential to scale the platform globally."