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Data is the primary asset of a business. It can be said that it holds the top position when it comes to decision-making and process optimization.
Understanding consumer purchase behavior based on indicators makes all the difference in creating marketing and sales actions. This is because the perspective analyzed is that of the customer themselves.
In both the retail and industrial sectors, metrics can be used strategically to gain a better overview of products, resulting in increased profitability.
However, even though they are essential for identifying opportunities, it's common for businesses to encounter difficulties when analyzing sell-out indicators. For various reasons, collected data may deteriorate and undermine the team's confidence in it.
Follow our article to learn how to collect this information more easily, quickly, and efficiently.
If you don’t have time to read now, click here to download our Ebook on the same topic to read later.
What Is Sell Out?
The term "sell out" means selling directly to the consumer, without intermediaries.
Essentially, it encompasses the entire process of selling to the end consumer. It involves planning sales not just at the retail or distributor stage.
Experts argue that sell out is basically the same as B2C (Business to Consumer), as both concepts are based on direct sales to the consumer.
What Is the Difference Between Sell Out and Sell In?
It’s important to remember that sell out should not be confused with sell in. In simple terms, sell in (also known as B2B, or Business to Business) refers to sales that occur between companies, distributors, and resellers, while sell out focuses exclusively on sales to the end consumer.
Thus, sell in connects the manufacturer to a distributor or reseller of the product.
As you might have noticed, in many cases, sell in is the sales process that precedes the sell out process.
3 Changes in Sell-Out Focused Management
Understanding whether your company operates with sell in, sell out, or a mix of both is essential for establishing your business and trade marketing strategy. Both elements need to be well-aligned.
For example, having a good relationship with the retailer or distributor is crucial. Stay in contact and seek information about products that are selling and those that are staying in stock, optimal dates, sales expectations, and more.
Therefore, it is necessary to create specific strategies focused on sales channels so they can sell your product to the end customer effectively and maintain inventory turnover. This is why sell-out-focused management is so important.
Changes Observed with Sell-Out Focused Management:
1. Stock Integration: Stock management becomes measured by the concept of integration. Retailers maintain the right amount of items in stock, directing replenishment based on consumer demand from the end customer.
2. Purchase Order: Typically, the responsibility for placing orders falls on the retailer. With the new model, the aim is to increase the level of integration between agents so that processes function as needed (rather than through a pre-determined purchasing process, which may lead to excess stock).
3. Payment Method: Sell-out management also affects the payment method between industry and retail. Instead of determining payment based on blocks of products purchased, payments can be based on items sold to the end customer, thereby improving the dynamics of the process.
What Are the Main Challenges in Obtaining Sell-Out Data?
Viewing the supply chain as a whole enables the industry to gain intelligence by integrating information from all the paths the products take, from production to sale.
However, the traditional method of obtaining sell-out information by directly requesting it from retailers does not provide the depth of daily process tracking.
Additionally, receiving the data depends on having a good relationship between the industry and its sales channel.
Typically, the relationship between industry and retail is either not very close or does not exist at all. As a result, retailers may not know how to send this data to the brands.
3 Tips on How to Use Collected Data Strategically
Just as important as collecting sell-out data is knowing how to analyze it at the right time to aid in decision-making.
In addition to aligning the interests of each player in the supply chain, when well-organized, this data enhances competitiveness.
These data points are powerful tools for ensuring sales targets are met and for rewarding those who have truly contributed to achieving the industry's commercial goals.
Here are 3 tips on how to best utilize collected metrics:
1. Understand Consumer Behavior: The consumer should be the primary focus for industries when creating strategies to attract, acquire, and retain customers. Based on data obtained from interactions, sales, and stock turnover, for example, it is possible to create a customer purchase profile, improve their experience, and better direct stock replenishment.
2. Recognize Activation Opportunities: One effective way to use sell-out information is to identify activation opportunities across various sales channels. Through indicators, you can align your brand with values that match the specifics and needs of customers, improving the shopping experience, stock replenishment strategies, and partnerships with distributors.
3. Improve Product Placement on Shelves: Also known as a planogram, the placement of a product should be adjusted according to new category management strategies, cross-selling, up-selling, and other similar strategies. This action impacts product presentation and customer perception, creating competition for available store space. Having sales and shelf availability data helps industries optimize this aspect.
Sell-Out and Industry 4.0
Maintaining control over inventory numbers, distribution, and sales has always been a challenge for companies in the supply chain, especially in the production scale of the industry.
The main challenge in managing these processes is dealing with the enormous amount of data that needs to be collected, organized, and interpreted.
For retailers, this is a smaller issue, but for industries that produce in mass for various distribution and sales channels, these problems are more significant.
How can sales at the point of sale (POS) be monitored? How can demand be forecasted? What decisions should be made in the short and long term based on this data?
Considering these questions, industry managers are exploring various methods to effectively process data.
Some make projections based on distributor orders, while others manage inventory directly with distribution channels.
However, with so many options for processing direct-to-consumer sales numbers, there are more or less effective mechanisms for making decisions involved in the process.
Modernizing processes requires solutions based on new technologies for better performance.
The advent of digitalization in industries, also known as Industry 4.0, has pushed companies across various sectors to adopt technology-focused solutions.
As a result, it is increasingly common to see industries investing in cloud data storage tools, artificial intelligence, and other technologies.
Unfortunately, those who do not adapt to new business models and their tools may find their short-term growth limited.
4 Benefits That Data Intelligence Can Provide to the Industry
Data intelligence represents a promising future for all areas of the supply chain. But what other benefits can data intelligence-based software offer to the industry?
1. Assertive Decision-Making: The more accurate the sell-out data, the better defined the decision-making process of managers becomes.
Precise and intelligently presented data results in a smaller margin of error, benefiting both the industry and the distributors and retailers.
2. Real-Time Data: Obtaining real-time sell-out data is one of the main advantages of using data intelligence software. By doing so, you accelerate processes and give managers a better understanding of the production environment.
3. Improved Incentive Campaigns: Do you know which salespeople from your distributors are generating truly positive sales results? This can also be assessed through sell-out data. Rewarding the right partners allows for better motivation, potentially leading to increased sales.
4. Reduction in Stockouts: Stockouts can lead to a range of negative consequences for everyone in the supply chain. Distributors and retailers lose sales, and the industry must compensate by increasing production. Implementing effective software allows managers to anticipate this process and not only ensure the correct quantity of products is available at points of sale but also manage the stocking of other products in the catalog that do not sell as well as the main items.
3 Strategies to Increase Sales in Sell-Out
For a company to grow and thrive in the business world, it is important to conduct strategic analyses frequently. Without specific analyses and actions, it is nearly impossible to measure the effectiveness of your results and correct flaws in the process.
If you want to boost your business’s sales using sell-out strategies, check out these 3 actions you can implement:
1. Optimize the Point of Sale (POS): The POS is crucial for sell-out as it is where the end consumer interacts with your product. Therefore, all efforts at the POS should focus on one goal: influencing the consumer to take your product home.
It is essential to invest in merchandising actions and provide high-quality service.
2. Know Your Consumer: Understanding who your customer is essential for optimizing trade marketing strategies. This allows you to analyze the profile and consumption habits of individuals and convince them that your product is better than others on the market.
3. Embrace Technology: Investing in technology and starting digital transformation within your company is one of the most strategic points for making a business prosper. Adopting current and technological software, developing an app for online purchases, and other innovations are key.
Implanta has the right tools to collect and obtain accurate data, leading to efficient decisions to enhance your industry’s performance.
To learn more about these and other sell-out data solutions, contact us..
