Trade Loyalty Program in the Clutter Retail Environment: Thinking Beyond Boosting Sales Through Monetary Benefits

Trade Promotion is a proven tool that companies have been using for years to boost secondary sales (sale through). Mostly, FMCG companies use this tool to push sales of a brand or SKU. These promotional offers vary for different retail channels and are based on the business priority of the offering company for a particular channel.

“Trade/ Retail Loyalty Program” is another more defined and attractive tool for the retailer, with a defined business objective from the offering company. This concept is based on the eighty-twenty rule of marketing; here, a few percent of retail drive a significant portion of the company sales. This concept is more effective for Tobacco Companies considering the dark market scenario where “Retail” is the key enabler for boosting sales and conveying brand messages to consumers. Even though FMCG Companies have the option to operate in both ATL and BTL, with the ATL clutter, “Retail” has also become an essential tool for them.

What are the famous “Trade Loyalty Program” tools?

• Target-based sales value/volume

• Target-based sales value/volume supported by trade merchandising

• Consumer communication by the retailer (On Brands/ new products/SKUs, etc.)

• Creating new consumers of a particular brand/product/SKU

• Combination of the above tools

How can a "Trade Loyalty Program" influence a Retailer?

Additional rational benefits are the key factors that influence a retailer to be a spokesperson for a company/brand and boost sales. This influence directly impacts the company's sales and brand building.

So, with an additional monetary benefit, a company can grab a significant portion of retail's-

• Share of sales/ retailer pocket

• Share of space/ shelf; and

• Share of mind/recommendation

Suppose we are sitting more than a decade ago, and this has been a very effective tool for the Tobacco/FMCG companies, as few of them have implemented the process. Bring yourself to the current era; more tobacco/FMCG companies with similar trade loyalty programs and telco and MFS companies are adding themselves to this process. This is a chaotic situation in the retail sector, especially in the common retail channels where all companies compete for space and retailers' attention. Many companies of different industries are fighting for the same retail space, the same pocket size of the retailer, and the same recommendation capacity of the retailer.

Innovative thinking and utilizing the current capacity will be a game changer in this cluttered environment. As a Trade Marketing Expert, you need to find customized solutions to

• Increase the pocket/ financial capacity of the retailer

• Space utilization tool to grab small space but is an effective way

• Introduce effective tool to bring the mind to the hand

Build a compelling package for loyal retailers, tying them rationally and emotionally to keep them motivated and make them feel different.

A Trade Loyalty Program (TLP) Package: Tie the Retailers both rationally and emotionally

A customized financial solution will help the retailer do more business with the company, leading to more profit options. This will also allow the company to keep the retailer tied up with its own business interests, leading to more outcomes. This solution will also create an emotional obligation towards the company.

The more the company gets from the retailer, the more chance it has to invest in creating an innovative retail environment. An interactive visual cue with innovative solutions will not only attract walk-in consumers but also create a long-lasting positive vibe towards the brand.

Providing the program at a fingertip will reduce the competitive challenge of gaining the retailer's share of mind. A repeatedly accessible tool will help the retailer stay informed and up-to-date, enabling the company to deploy new campaigns and products with just a click.

Continuing with the monetary/ rational benefits, a cluster of well-thought-out emotional benefits, including non-financial and non-business financial benefits, will add more fuel to the TLP process. These emotional benefits should not be limited to insurance facilities; the trade marketing team can think of other fringe benefits, including family healthcare facilities, women's empowerment, point-based coupon/purchase facilities, etc.

Building a rational and emotional partnership with the retailer is the critical success factor of a trade loyalty program. Binding a retailer with both financial and emotional benefits will not just boost the business volume in a particular retail/trade channel, but it will also assist in building a positive brand image through the retail environment and the retailer. As a trade marketing expert, it is high time to reevaluate the current process, make the required changes, and engage all the stakeholders to work together for a successful trade loyalty program.