3 Things Agri-Input Retailers want from AgTech
Jun. 14, 2018
Unless you are meeting someone who is extremely self-aware, It is pointless to ask someone what they really want. You can never be sure what they say they want is what they really want, assuming if, and that's a big IF, what they really want could be articulated to begin with.
To make matters worse, when it comes to technology, our responses get murky, as we often sub-consciously respond by our implicit relationship with technology (Is technology a force of good? Is it even a necessity? Why bother with these shiny toys that can never augment human relationships and all that).
It is perhaps, because of these reasons, I have been taking my slow and measured baby steps in making sense of the big, hairy world of AgTech, ever since my team launched neoInt, our Agribusiness Intelligence Platform for agrochemical and seed companies.
Being a technologist, among other things, I shudder to think of the ramifications when I develop a rose-tinted view of leveraging technology in the agri-input ecosystem. And thus to ensure that I stay grounded with the ground-realities while acknowledging the possibilities technology has to offer, I have been traveling to the field regularly with my team. More often, these days, to learn and interact with the critical node we are hoping to serve in the value chain of Agri-Input ecosystem: Agri-Input Retailers.
Why focus on Agri-Input Retailers?
I am convinced that Agri-Input Retailers are the key Constraint to be understood and tackled in providing maximum value to the Agri-Input Ecosystem.
Feel free to skip the small addendum introduction to Theory of Constraints below, if you are familiar with it.
Theory of Constraints have been my dominant model so far in making sense of the ecosystem. Here is a quick recap of three key tenets of Theory of Constraints, from Tiago Forte's excellent blog series.
Key Tenet #1: Every system has one bottleneck tighter than all the others, in the same way a chain has only one weakest link.
Key Tenet #2: The performance of the system as a whole is limited by the output of the tightest bottleneck or most limiting constraint.
Key Tenet #3: (derived from #1 & #2): The only way to improve the overall performance of the system is to improve the output at the bottleneck (or more broadly, the performance of the constraint)
Data.Gov.In 2014 data from the Ministry of Chemicals and Fertilizers estimate around ~2Lakhs retailers and 22,000 wholesalers selling chemical fertilisers in India. My friend Sunny Narang often used to share this folk wisdom about India. "Har Barah Kos Khana aur Boli badalti hai" (every 30-40 kms the food and dialect/language changes).
Acknowledging this traditional Indian wisdom, can we start looking at broader generalizing patterns? What do Indian Agri-Input Retailers want from Agtech?
1) Contextual Loyalty Programs:
When I began to quiz one of the agri-input retailers in Chevella town about loyalty reward points, he made no bones of his loyalty towards Syngenta, gleefully pointing towards the muted TV yelling "Breaking News" in a gushing flow of kinetic images.
He had received this TV as a Loyalty Reward from Syngenta and going by the enthusiasm that was at display, it was evident all the channels of their engagement (Anantham App, SMS, Missed Call, IVR) were working in full steam.
When you come across an anecdote like this, It is easy to misread it.
You see, the point here is not about the rewards per se, but the variability of the rewards which drives active engagement. In the field visits I conducted across Telangana, I saw a pattern of responses which emphasized on the importance of variability.
Do Agri-Input retailers prefer Annual Discount or recurring monthly discount from Agrochemical firms? Majority of those I met vouched for the former, despite the lucrativeness of the latter, for a simple reason: Variability.
If this is true, can Agri-Input players leverage technology to run contextual loyalty programs that can be iterated with a) annual and monthly promotional schemes b) variable rules driven promotional schemes, based on product, season, turnover?
Agrochemical companies today know the holygrail they are chasing for: Farmer Loyalty programs. And if you know Indian villages well, you would know that there are significant last-mile challenges, pricing issues in building Farmer Loyalty Programs. Until we build the necessary infrastructure for farmer loyalty programs, can we leverage Agtech to run contextual loyalty programs for Agri-Input Retailers at scale?
2) Product Promotion Intelligence
Most of the Agri-Input Retailers have sophisticated knowledge of the crop cycles and the agro-climatic conditions of the cluster of villages they operate in. However, they are kept in the dark about the marketing activities that are done by field-staff of agrochemical companies.
Here is the thing.
If you talk to Agri-Input Retailers about product promotion intelligence, you are sure to get the impression that, frankly they don't care, as long as they know that pull-based marketing activities ( Field Day, Jeep Day, Harvest Day) are happening in their midst.
How will Product Promotion Intelligence provide value to Agri-Input Retailers? To understand this, let us look at typical struggles experienced by Agri-Input Retailers.
On an everyday basis, they struggle with
- Getting the right support from the agrochemical firms incase of product returns.
- Visibility into distributor pricing, especially when it changes for particular brands, after they've provided the same brands to farmers on credit.
- Product P&L Tracking: Product wise performance, considering purchasing costs, logistics and other costs.
- Order Tracking.
Product Promotion Intelligence can be a great asset providing collaborative value for both agri-input companies and agri-input retailers. However, for these collaborative energies to kick in, there needs to be a strong value-proposition that has to be offered to Agri-Input Retailers.
Can Agtech faciliate this collaboration for direct interaction between Retailers and agrochemical companies?
“To get a consumer excited, you have to offer something they’re not expecting and subscriptions are an ideal instrument for surprise.” - Adam Goldberg, CEO, Techstyle
If you closely look at both of the points above, a larger pattern is evident. Today, we need the equivalent of Amazon Prime subscription models for Agri-Input Retailers, which provides customer experience delight to agri-input retailers and valuable analytics data for agrochemical firms.
The other day, while browsing my Amazon Prime Video Account, I came across this banner.
Try and connect the dots, if you will.
Can we look at an Amazon prime-equivalent subscription programs for Agri-Input Retailers which can provide the following insights to Agrochemical firms?
a) Order Intelligence ( What is my credit limit while ordering stocks? How can you help me manage my capital and credit better? Can I get an expected delivery date) b) Promotion Intelligence ( Can I understand where this particular brand stands in its Product Life Cycle Curve inorder to tap its peak potential before it comes under attack from generics? How can I maximize sales based on what provides real value to farmers?)
What do you think? Do you agree with these points? What else do you think Agtech could offer of value to Agrochemical companies?
Let us talk.
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