How Coca-Cola FEMSA transformed perfect store execution

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Field execution in modern trade is often a costly merchandising activity, where key decisions are made at a head office level and the field sales teams' sphere of influence is limited.

In this article, we’ll learn how Coca-Cola FEMSA have reimagined their front-line execution and empowered their field teams with the right data, insight and content.

 

Coca-Cola FEMSA’s partnership with Pitcher 

FEMSA partnered with Pitcher to be able to amplify the most effective promotions, content and products in the modern trade stores so they could truly make an impact and increase footfall.

When Pitcher started the engagement with FEMSA, they had identified a multitude of opportunities to digitally transform their front-office execution in modern trade across their two key markets: Brazil and Mexico. 

Pitcher representatives rode along with FEMSA’s sales reps and saw firsthand what challenges they encountered on a daily basis. Plus, they also got to speak to FEMSA’s end customers.

Pitcher learned that FEMSA reps are well embedded within their customer businesses, and that there was an untapped potential to enable these reps with the right solutions, insights and guided selling capabilities so that they become trusted advisors to the customers. They then could have more value-added conversations and turn every store into a perfect store.

 

Our conversation with Coca-Cola FEMSA 

Arik Brückner, CRO of Pitcher, spoke to Ignacio Echevarría Mendiguren, the CIO of Coca-Cola FEMSA, the largest bottling company in the world by volume.

Parts of their conversation are captured here.

Q: Ignacio, it’s been quite a fascinating journey that we’ve been on together. Can you give us a bit of background into the business drivers and your vision for this transformational program?

A: We have to rethink and rebuild modern trade. Some recent changes in consumer and shopping behavior led us to rethink our approach from going for a share of shelf to an evolved consumer experience which would require more products, open spaces and enable consumers to easily find products. This would enhance the overall consumer experience and enable them to easily search and find products in different categories.

Q: You chose one of the toughest landscapes: modern trade. And since the pandemic, sales in home and grocery stores have skyrocketed. Modern trade has become a crucial route to market. What were your plans for the digitalization of the field execution in modern trade?

To always make the product easily accessible in high-footfall areas – not just one area in the store, but across the whole store (equally food as well as alcoholic and soft beverage, and where the clothing is) – and always in stock. We need to have control over the whole outlet.

We are expanding our portfolio, meaning that Coca-Cola is now selling more SKUs, and we have even more brands and categories than ever before. Therefore, we also have to be in all parts of the outlet. Finally, we want to manage the online communities with users, since they are buying online, and then go to the store to pick up their goods. How we are managing this stock is really important and a new process for us.

Q: You mentioned different market requirements. When it comes to implementing the right execution framework and solution, we often see our customers are challenged with balancing local and global needs. You managed to get that balance right, where you centrally chose a solution for two key markets and still catered for their individual needs. Can you tell us a bit about how you've achieved that?

A: Consumer Goods (CG) as an industry is moving away from having markets as individual business units to strong in-country businesses with their own HR, finance and so on. This evolution poses a challenge of giving markets autonomy to make local IT decisions vs globalizations. The way we do it in FEMSA is central governance, giving markets autonomy to enforce their specific requirements but still following central IT governance.

The implementation of this strategy is managed locally. This is the flexibility that Pitcher provides us. We have many different tools and many different options.

 

For me, one of the benefits of Pitcher is that we have set up a standard process. 

We have a central strategy which we implemented country by country, brand by brand and customer by customer. We now have the quality of data and a central place where we manage all the insights. Otherwise, this would be a nightmare. We have now achieved the balance between what has to be managed by HQ and what is managed in the local outlet.

It’s different for different cities and for different countries or territories, depending on their level of maturity. In order to manage all of the complex requirements from our customers, including hundreds of SKUs and vast amounts of different categories, we have to use technology. It’s not possible manually.

We have to identify any issues in real time and respond to them promptly. This is not only for us to sell more, but to help our customers to create a new and better user experience inside the store. And you cannot do that without technology.

Q: So you are not only managing the outlets, but becoming the trusted advisor to managers, and helping outlet managers to increase their sales as well. In line with what you just mentioned, one of the main growth levers that sales reps can pull in modern trade is promotions. Equally, ensuring your position against your competitors is key. 

How do you manage the planning and delivery of your promos at outlet level to ensure you stay competitive?

A: We have salespeople in the stores who we are transforming to be more business advisory. For example, if we have the planogram, if we have access to competitor data and we can start a dynamic promotion process. If we see that we have a big promotion from a competitor, at that moment, we can create a new promotion. And we can do that at the same moment that the competitor promotion has started in store. So the salesperson would react in real time, and effectively our customers will increase their sales and ultimately, we will improve the shopper’s customer experience in the store. 

 

And this is the challenge: how we can change the tradition of field salespeople to this new type of commercially minded sales rep in modern trade – and importantly, with data that we capture in real time. 

Q: You mentioned a very good point there – data is critical and salespeople need to be able to have data-driven conversations. Having said that, what is your top priority? 

A: A big word for us is flexibility. And we are doing really well with Pitcher with regards to this. We are managing the internal data with Pitcher because we can get a lot of information from the store. So we have the flexibility to adapt or manage our external data. We have a lot of analytics and algorithms to manage SKUs, promotions, prices, and compliance. So we manage a huge volume of data, but this is not an issue with Pitcher. The big challenge is being able to be flexible with the data that is supplied by Pitcher to integrate with the information and the algorithms that we have from the other parts of the company. And here, we are doing well. 

In the last two years, we have improved the overall quality of our standardization process. I have no doubts about the information that we can manage with Pitcher. I know what we can manage and integrate with our other systems, how we can combine both databases and how we can leverage the value the most. 

Q: Given that within the industry, the role of merchandisers naturally comes with churn that is higher than in other industries or roles, how do you see technology helping you develop and retain these employees?

A: A lot of these reps are early in their careers and still learning the industry. Ultimately, we want to develop these people to grow within the commercial organizations including traditional trade. Modern trade could be the starting point for reps to train and learn the industry and sales skills, and by using the right type of coaching and point-in-time feedback, we can really grow them into other roles.

Thanks very much for your time, Ignacio!