What a year 2020 was: wildfire, pandemic, global recession... and that’s just the first few months.
Now, with the new year underway - and with arguably the most unpredictable 12 months in recent memory now behind us - we decided to gather some of Flintfox’s world-leading experts together for a quick debrief, to find out what they learned in 2020, and to get their take on the state of pricing and supply chain technology for 2021.
As a global company, it makes sense that the perspectives are diverse. After all, while the Auckland-based Flintfox team has been enjoying the America’s Cup, 12,000km away in São Paul, Covid-19 lockdowns have been bringing Latin America’s economy to all but a standstill.
Similarly, for some industries, business has boomed. For most, it hasn't. But whether it’s the best of times - or the worst - we think there’s always something to be learned.
So what are the key lessons from supply-chain ground zero? Where does the market stand right now? And what are the challenges and opportunities the new year brings?
Even with strict lockdown rules in place once again, UK-based Senior Pre-Sales/Consultant Ian Bunn – who manages the EMEA region - says there are still opportunities out there for businesses nimble enough to seize them.
“Clearly there has been a downturn in certain sectors, some within our verticals,” says Ian. “High Street retail has been hit very hard, but looking at food and beverage, DIY materials, garden sectors, it's been surprisingly buoyant. And for Flintfox there's been an upturn in traffic from those kinds of companies and certainly companies with a significant online retail presence.”
“In the last quarter of 2020, people seem to have settled into their new business-as-usual - and for many, that means working from home. Technology is enabling that: Microsoft Team meetings, Zoom calls, maybe a printer and scanner, HD cameras. Businesses are still getting that collaborative work done off-site, and so now they are looking to be more price-competitive, more rebate-focused.”
“It's a profound moment in terms of technology because we've been waiting a long time for all these things to happen. Now they are. How long have we been going through the so-called 'paperless office revolution'? The Pandemic is actually making it happen now. Digital adoption has been brought forward ten years, even in industries who previously were only dipping a toe in the water.”
“For a lot of people, the commute has disappeared, maybe they've got a couple of hours back in their day. I think that a lot of people will be appreciating this change and thinking: You know what? I don't want to go back into the office. For a lot of people, the choice between the train ride and staying in will be obvious.”
“It's clearing a lot of deadwood technology. We have to feel for people losing their jobs. We must also look really closely at what it actually means to be agile, and try and be smart about the investments that will protect company financials, jobs and growth. For many of our clients, that investment is tools like Flintfox’s TRM solutions and hyper-speed pricing engines..”
“My advice: When it comes to doing business in 2021, ensure you’ve got a handle on your pricing and explore automations. If you’re still operating on spreadsheets or an outdated legacy system, there’s a huge amount of money and resource time to be saved. Similarly, don't expect to do deals at full cost. You need to be flexible on pricing. Companies will be struggling. Companies that were doing $100,000 proposals this time last year, can now only do fifty, so don't be afraid to do the deal, I say.”
“2020 has been a stress test on a lot of companies - whole countries as well. I think we will see a new political landscape start to emerge, and a new kind of social framework.”
The global pandemic has accelerated digital transformation, says Steve Peppler, Flintfox Chief Product Officer in Toronto, Canada, with investment in technology to manage pricing complexity the order of the day.
“Looking back on 2020, there have been clear winners and losers in the market,” says Steve.
“We’ve seen those businesses that rely on direct customer service, or require lots of face-to-face interactions significantly affected. At the other end of the scale, we also have customers with significant eCommerce capabilities, and for many of them, those channels are booming.”
“For those organizations that are keeping up, they seem to fall into two types: first, there are the ones that are investing now, so that they can get ahead of the competition while business is slow. They're using the current moment as an opportunity to leapfrog, especially when it comes to digitizing their business with eCommerce.”
“Then there are those who are booming right now who are saying ‘okay, now is the time to really put the pedal down’.”
“A big part of the current focus is the proliferation of channels. Take a coffee company as an example. Whereas in the past they would simply dry beans and ship them out, now they've got many channels they’re selling into: street sellers taking orders with hand-held devices, foodservice distributors who are selling to bigger chains, grocery stores, as well as what they are selling through their own coffee shops.”
“So the complexity of pricing and deal offers - and the ability to manage all that centrally - is more important than ever before, simply because the business itself is more complicated than it was in the past. It doesn't matter what you sell, centralisation of pricing is growing more important all the time.”
“And when it comes to the pricing and rebate market, there are trends that you'd usually see in retail beginning to appear up and down the supply chain. Vendors are working harder to incent sales to end customers via pass-through rebates, prices and promotions similar to how grocery vendors use scan-based promotions to directly incent consumers. Moving to this sort of model requires the use of centralized pricing and rebate systems that can manage the evolution of channel strategies from one automated source. Evolution occurs at different speeds and with different flavors across channels and markets, increasing the need for flexible systems that can be configured without the need for developers.”
“Looking to the future, all players in the supply chain require similar flexible and centralized solutions to manage incoming and/or outgoing revenues and costs. With flexibility and complexity or variation across businesses and channels comes an increased need for visibility and sharing to create trust between partners.”
“As a vendor, I’m much more willing to try new things and spend more effort with customers that provide me with accurate and timely data I can trust. Flintfox solutions provide that accurate, timely and trustworthy data up and down the supply chain. In the future, you’ll see us linking partners more closely with more live digital collaboration.”
“And big data management is improving and at Flintfox, we’re going to be in a good position to increase value with the data our solutions manage. The ability to apply AI and machine learning to data generated by Flintfox solutions may be the next big ‘disruption’ in the marketplace.”
Flintfox Regional Director APAC, Auckland-based Chris Spence, says that the future belongs to those who invest in better supply chain technology today.
“There's a heightened awareness right now that supply chains are under an enormous amount of pressure and maximising margin and revenue are more important than ever,” says Chris.
“The key question here is: who moves first?”
“There are going to be winners and there are going to be losers in all this, and it's all going to come down to who can commit to rebuilding their business technology to give them a competitive edge.”
“There are studies that have been done that say ‘when an economy is in recession, those businesses that continue to advertise bounce back the best’. I see a similarity here. The ones that can run their businesses most efficiently will have the best margin result.”
“And to do that you need best-of-breed applications. Supply-chain companies need trade revenue management. But they also need to have that mindset to invest in technology to help them recover.”
“When you're in a very tight competitive environment with a lot of uncertainty, that can be a real challenge. The companies that we see closing deals are those that have that mindset that says ‘we’ve got a long-term plan’.”
Leonardo Montenegro Cunha
Despite a tumultuous year, there’s plenty to be optimistic about, says São Paulo Regional Director, Leonardo Montenegro Cunha.
“For me, 2020 has been an opportunity to learn,” says Leo.
“Let me tell you why. In January 2020 it was looking like a promising year. All the economic numbers for the Latin America region were showing a great opportunity before us and we had started preparations for this exciting year.”
“Then everything changed. The Covid-19 pandemic hit, the pipeline stopped for four months and our perfect year had gone down the drain. No one would commit to making new plans.”
“Needless to say, it has been very frustrating. It’s like we've lost eight or ten months of the year. Only now are clients beginning to open up about projects, and once again we are starting to get traction.”
“It's nobody's fault, but it’s not a simple thing to manage either, so for me, 2020 has been a learning opportunity and an opportunity to review our strategy and prepare to engage with our clients even better.”
“It’s also given us some experience working in a new kind of survival mode. São Paulo is the biggest city in Latin America and if São Paulo stops, the Brazilian economy stops. 50 percent of the economy for Latin America stops.”
“So we've been busy exploring other markets. We are talking with clients in Chile. We are getting traction with Peruvian companies. We’re engaging with Mexican companies. Reduced activity in the São Paulo market has been our opportunity to explore other markets in Latin America.”
“Now we have a host of new opportunities we're talking to clients about. When the vaccine comes - or perhaps just with a little luck - they'll be ready to move ahead.”
“So we're getting excited about the next quarter. There's still some uncertainty on the table of course. People want to move ahead, but they're wary. As soon as the Covid-19 vaccine is available, I think everything will speed up very fast.”
“It’s just the beginning for Flintfox in Latin America. Microsoft is supporting us, we're also working very closely with New Zealand Trade and Enterprise, and we’re moving in the right direction.”
“Last year we were at the beginning of the learning curve; now is the time to land those deals. This situation is not a permanent situation. This problem will be solved. Persistence is the word for now.”
Whatever economic, political or public health challenges this year brings, at Flintfox, we believe there will always be opportunities for those businesses agile enough to realise them.
Talk to us about your supply chain resolutions for 2021.
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Flintfox International is a global leader in helping businesses master their supply chains and transform their businesses with intelligent, cloud-based, centralised trade revenue management.