Route-to-Market (RTM) is critical in the Philippines where traditional trade is sizeable, requiring a massive distribution network utilizing an optimal mix of own salesforce, distributors and wholesalers.

In a market with over a million outlets for a shopper to choose from, building a Route-to-Market (RTM) strategy that efficiently delivers product accessibility is a key competitive advantage in the Philippines. 

Throughout my career, I’ve witnessed diverse trade structures across Southeast Asia. On one end, we have modern trade-dominated Singapore, where a few players have omnichannel presence. In contrast, countries with large populations and wide geographies, like the Philippines and Indonesia, are dominated by traditional, fragmented trade, with small stores — such as the sari-sari stores in the Philippines or warungs in Indonesia — playing a central role. While the final RTM design varies depending on the retail landscape, certain elements are universal. 

The Shopper and Your Perfect Store 

It’s crucial to understand not just the target consumer’s needs but also the shopper’s needs. Keep in mind that the shopper may not necessarily be the end-consumer. 

Once in shopping mode, shoppers bring a new set of requirements to the mix, forming their shopping mission. Successful brands must understand and meet the needs of both shoppers and consumers. Knowing where and how they shop will dictate your sales force structure and capabilities. Understanding shopper behavior helps define the "Perfect Store." 

The Perfect Store is where optimal execution at the point of purchase meets shoppers’ needs. This involves the right product assortment, placement, pricing, promotion, and communication across the path to purchase. 

In today’s crowded market where there is a proliferation of product options and merchandising collateral, shoppers often struggle to find products that best meet their needs. Effective execution of the perfect store guides them towards your products. For example, a “hot-spot” is hand level for the range targeted towards adults, while it would be much lower for those targeted towards children where the visibility generates “pester power” and influences purchasing decisions of their parents when they tag along in the shopping mission. 

This concept applies online as well. Creating a Perfect Online Store involves optimizing product assortment, pricing, promotions, content, ratings/reviews, and search visibility.

Executing the Perfect Store 

To consistently deliver the Perfect Store experience requires building the right capabilities to execute the necessary activities with the right frequency in target channels. 

Modern trade requires a strategic approach, benefiting from joint planning processes that consider availability, customized promotions, and planograms aimed at attracting more shoppers and growing the category. Companies often service these key customers through their own sales force, supported by operations teams that ensure top-to-top agreements are fully implemented, on time at the store level. This includes core activities of availability and visibility and cycle activities like promotions and new product launches. 

Traditional trade, on the other hand, is more fragmented and transactional. While the sales skill set required is more fundamental, you need a massive distribution network utilizing distributors and wholesalers. Distributors are generally better at executing the principal’s strategy, optimizing your network requires several factors: establishing a sell-out focused distributor network, where the principal has visibility of and measures what is executed in each of the distributor’s customers; investing in internal and distributor capabilities, in most cases this requires training programs and measuring distributor’s functional capabilities (e.g. logistics, selling); and building long-term, mutually sustainable and profitable partnerships. 

To penetrate the market further, complement distributors with wholesalers. Historically, wholesalers relied on brand pull to drive distribution. However, some companies have successfully partnered with wholesalers, appointing them as lead stores in a specific geography. Sari-sari stores in their proximity get their "last mile" requirements fulfilled with the aid of smartphone apps. This provides the principal with visibility on indirect sales and leverages the data to further influence the wholesaler and the behavior of their "sukis” towards the perfect store guidelines. Some companies have taken it a step further by providing free training in basic business management skills such as stock control and accounting, strengthening customer loyalty in the process. 

Importance of point of purchase to an FMCG 

To demonstrate how crucial it is to have a perfect store, during a recent brand positioning and consumer communication engagement with a client in the FMCG industry, we rigorously analyzed the business's key drivers, issues, and opportunities as part of our discovery process. In checking the drivers impacting sales performance, we uncovered gaps in translating brand strategies into effective channel and customer plans. The execution at the point of purchase didn't fully meet consumer and shopper needs. Despite these insights being outside the initial project scope, we highlighted them to the client who immediately recognized the necessity for an end-to-end approach and solution. 

To recap, here are the main principles you need to remember: 

Know Your Shopper. Success hinges on understanding not just the consumer, but the shopper's behavior and needs. This insight will inform how you structure your sales force and define your Perfect Store. 

Perfect Store Execution. Optimize product assortment, placement, pricing, promotion and communication to create a seamless shopping experience that meets shoppers' needs. This concept applies both in physical stores and online. 

Tailored Strategies for Different Trade Channels. Modern trade requires strategic planning and collaboration, while traditional trade demands a broad distribution network and strong partnerships with distributors and wholesalers. 

Simply focusing on generating sales may give you profits today, but having an RTM strategy that consistently delivers excellent Perfect Store execution at the point of purchase ensures long-term business success.