Small retailers in the FMCG sector have long had a place in the heart of the American FMCG industry. With about 7.9 million mom-and-pop retail stores open all over the US, we’re all familiar with the image of the local ‘General Store’ in downtown Chicago or the bodega in Queens, New York. However, while retail giants like Walmart tend to come to mind whenever we think of US FMCG retail, the backbone is still made up by SMEs. According to the U.S Small Business Administration, small businesses in the USA make up 99.9% of all businesses and employ nearly half of the American workforce.
However, these essential businesses are facing an increasingly difficult market landscape as consumer behaviour continues to change. With over 80% of all Americans now opting to shop online—a trend only set to intensify in the coming years — these traditionally brick-and-mortar stores need to digitise their operations.
Unfortunately, these businesses are unable to do so, as large e-commerce platforms like Amazon have too much control over the supply chain. Recent data shows that these large e-commerce platforms account for over 38% of all online sales in the US and are expected to keep rising. As these platforms continue to amass market share, leveraging their vast logistics networks, in-depth market insights, and predatory pricing strategies, small businesses are forced to deal with reduced foot traffic, shrinking profit margins, and disrupted supply chains.
Traditional E-commerce is not a sustainable solution, as it only benefits one player – the e-commerce platform. This is why we need a new type of digital commerce model, one that is open, transparent, and allows small businesses to trade freely in the digital economy, and that solution is Open Commerce
Solving the distribution problem with Technology
Over the past few years, the prices of consumer goods have skyrocketed as US inflation rates hit a four-decade high in June 2022, and prices remain high. This hike in prices has led to many vulnerable populations being unable to access the consumer goods they need. While there has been a lot of focus on the current supply chain disruption factors (such as the pandemic or the conflict in Ukraine), distribution is a longer-term and more entrenched problem. Centralized distribution, concentrated in the hands of a few powerful players, has created a chronically inefficient market that has led to incessant supply chain shortages and spiraling costs.
AI powered Technology can help break the artificial barriers that exist across the market and help both consumer goods manufacturers and regional distributors match supply with demand. If we can bring brands, retailers, and distributors on a single platform to trade, we can break the monopoly of large e-commerce platforms and leverage the power of network effects to ensure the market becomes more efficient. Allowing small businesses to buy stock from any seller at competitive prices on an open trading platform will lead to more affordable prices of consumer goods for the end consumer.
Open Commerce unlocks the full value of the distribution chain to drive small business growth
While there are several solutions that claim to help the consumer goods and retail industry, most of them are not doing enough to solve the retail problem. Most of the available technology is used by centralized entities with the aim of hijacking control of the entire supply chain rather than creating an open playing field.
For example, traditional e-commerce platforms, the most common technology available, are unduly restrictive and predatory. These platforms control the prices of consumer goods and hijack control of the distribution chain by building their own fulfilment chains, boycotting the long-existing distribution chains obsolete, and making it harder for small businesses to receive their products due to the heavily fragmented supply chains.
Open Commerce solves this problem and creates an open playing field for all parties across the distribution chain. RedCloud has built the world’s first Intelligent Open Commerce Platform that brings all players across the distribution chain onto a single platform where they can instantly connect and trade with each other.
We are able to create efficiencies in the market with our proprietary Open Commerce solution. For example, retailers in one location who are experiencing shortages of a particular product can easily reach out to sellers of the product in another location that they might not have been able to reach without Open Commerce and order the product from them. A win-win for consumers, retailers, and shoppers.
We’re also leveraging AI technology to empower brands and distributors to identify areas of demand for their products in real time, with granular clarity. Sellers will receive AI-powered recommendations on how and when to adjust their pricing, trade promotions, and product supply based on rapidly changing market conditions to maximize sales opportunities and drive sales growth.
Get started with RedCloud’s Intelligent Open Commerce Platform today
At the core of RedCloud’s mission is the firm belief that technology should lift economies and societies, creating rather than destroying communities. We want to empower small businesses across America by giving them the tools they need to grow their businesses through an open trading platform for all.
Be the first to take advantage of this game-changing technology. Register your interest today by clicking here.