4 key digital innovations adopted by the LMD sector (Report Summary)

03 June, 2021

Malena Macassi

Marketing Analyst

This article is a summary of the latest report made by the Global Distributors Collective and the CDC Group on “How is the last mile distributors sector adapting and innovating following COVID-19?”. The research was made based on insights from 23 CDC investees and GDC members mainly operating in the energy, agriculture, health, water, e-commerce, and FMCG sector. The objective of the project was to help businesses better serve underserved customers in emerging markets during the COVID pandemic, improve their resilience, and accelerate their recovery. 

We aim to highlight two priority topics identified in the study related to how businesses are innovating to overcome challenges in their customer relationships and their field team management. 

The challenges brought by the Covid-19 crisis

Last Mile Distributors are essential to enable low-income customers in urban and rural areas to gain access to beneficial products such as solar lights, improved cookstoves, and water purifiers. COVID-19 brought many challenges to the sector, one of them was reducing the ability to engage in person with customers, agents, retailers, and staff. 

In many countries, COVID-19 measures, such as lockdowns and social distancing, impacted the companies in two ways. First, it made it difficult to engage with customers in person and to physically distribute products. Second, it prevented field teams from working as usual. They were not able to move around to meet customers, make sales and deliver products, putting the incomes of commission-based staff at risk. Company staff dynamics also changed, since they were not able to work face to face. 

Innovation became crucial to face challenges and accelerate de adaptation to the "new normal". The research project analyses initiatives from companies related to the adoption of digital tools to change the way they interact with customers and field teams which are having a positive impact in companies development.

4 key digital innovations adopted to accelerate recovery and adapt the ‘new normal’

1. Remote performance management and tracking of the field team:

The need for remote work due to the current crises calls for the adoption of solutions that enable better management of the field teams in this context. Companies using digital tools such as software to help managers track staff activity, output-based KPIs, and frequent check-ins effectively. An essential task is to set and communicate KPIs to ensure accountability among the staff to recognize the rewards for high performance and consequences of poor performance. Good remote field team management focuses on tracking outputs (e.g. number of leads generated, sales made, or repayment rate achieved) rather than inputs (e.g. number of hours worked or time spent on the road). Sales agents appreciate being trusted to achieve agreed objectives independently.

If you want to learn more about KPIs that can help you track your field force productivity, you can check our blog post here.

2. Digital orders and payments to improve customer relations: 

Companies in the LMD sector are developing in-house digital solutions or adopting third-party ones to improve the interaction with customers. The type of tool acquisition may depend on the identified needs and strategy. On the side of ordering solutions, we can find distribution and supplier management software, as well as white label e-commerce platforms. About the payment digital solutions, this includes wallet apps, point of sales solutions such as debit cards, and fintech solutions that allow companies to take payments through different channels.

To read more about the companies who are adopting this type of solution you can take a look at page 8 in the report here.

3. Facilitating peer exchange and training of the field team:

Training dynamics have also changed. Companies switched (almost) all field staff training online. Since managers have identified the benefits of this approach, they are adopting it permanently. Many have launched new in-house or third-party digital field team training programs. For example, some companies are creating online training courses that include videos and quizzes. Others are developing management skills within the team through LinkedIn courses. In general, digital training is allowing companies to better track participation, giving management visibility of courses taken and test performance.

4. Enabling staff to get connected and feel engaged:

Communication is crucial to keep the field teams engaged and connected with the company especially in times of crisis. Immediate actions taken by the organizations were related to ensuring job security within the staff by providing them protection equipment and sharing health information through digital platforms. Additionally, since the way of interaction had to change to a more remote one, it required staff capacity building alongside the provision of hardware such as wifi dongles, smartphones, and laptops. Finally, to maintain the social and human side of work, many have implemented small actions that strengthen motivation and mutual accountability. For example celebrating staff birthdays via WhatsApp chats and group calls.

Important dimensions to take into account when adopting digital solutions

  • Digital maturity of users: it is crucial to assess the digital readiness of the retailers, agents, and customers. Also, taking into account the gender gap end-up being relevant when choosing and implementing digital tools. Solutions that are gender-smart and women-inclusive in design and usability have been shown to drive better impact. (gdc webinar link)

  • Build or buy a solution: decide whether to build something in-house or off-the-shelf. Factors such as budget and functionality needs are relevant for the decision-making. On one hand, in-house solutions can be more expensive but appropriate for companies operating at scale. On the other hand, off-the-shelf solutions provide a more cost-effective solution for smaller companies, but this is not always the rule. Some solutions providers offer different levels of customization that can adapt to the business needs. Based on our experience dealing with clients that faced the same problem, we developed an article about the build or buy dilemma for a Field Force Automation solution that can help you in the decision-making process. You can read it here.

  • Integration capacity: choose a software solution that will meet both current and future business needs. Organizations should consider how the tool integrates with the existing processes and practices. As well as infrastructure, because it is better when solutions can work seamlessly with other tools that are already in place, and should ideally continue to be appropriate as businesses scale.

  • Ensure the adoption: drive adoption and usage of the chosen digital ordering and payment solution. The chosen solution will only work if it is adopted by end-users (agents, retailers, or customers). Therefore, it is relevant to highlight the benefit of using it to motivate users to invest time and effort in learning a new digital platform. Constant support to help drive adoption will help in this process too.

    If you are interested in knowing more about best practices to ensure adoption of digital tools, you can read our blog post about the 5 best practices to ensure adoption of your Field Force Automation solution here.

Conclusion

It is a fact that Covid-19 represents a major challenge for companies within the LMD sector due to the way they operate. The report shows that despite the severe early impact the companies had, they have managed to be adaptable and resilient in their response. The situation also represented an opportunity to unleash the benefits of adopting new digital tools and accelerate their adoption as part of the innovative actions taken to improve customer relationships and field team management. These solutions and ways of working are likely to remain in place long after the crisis has come to an end.

Sources

Report: How is the last mile distribution sector adapting and innovating following COVID-19? - Insights from the Global Distributors Collective and CDC Group

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