BY: Consumer Goods Technology Staff ON AUGUST 31, 2021
Measuring trade promotion effectiveness has never been a straightforward task, but today’s abrupt digital shift has tangled the webs and tightened the knots for unprecedented complexity.
Read on to learn about some of the most important things consumer goods companies need to know when it comes to omnichannel revenue planning, including:
Recent CG brand trends, including some of today’s most common challenges
The steps to take to increase visibility and agility
How to have better relationships with your trading partners
Where tech can help (and where it can’t)
CGT chatted with Bob Debicki, senior director, CPG and retail at Anaplan, and David McCarty, CPG industry principal at Twelve Consulting Group, about the new direction of trade promotion effectiveness. As part of this, Debicki shared findings from a recent study conducted by Anaplan — covering about 950,000 SKUs across multiple retail channels — that discovered almost 70% of completed promotions were not driving the intended result.
Siloed companies are challenged by their ability to track, in tandem across the enterprise, what’s successful and what’s not; as a result, CGs are often spending more money in ineffective areas rather than reducing cost to allocate elsewhere. And even with investments in new technologies, some of these siloed-shackled brands are unable to properly integrate their data.
As many consumer goods companies adjust to the pandemic-prompted digital acceleration, figuring out how to allocate the right products to the right channel is just one challenge — spending money to create demand has become an even greater task. Much of this is hardly new: When it comes to in-store trade promotions, companies have long struggled with defining events, determining SKUs that should be promoted, designating price points, and determining the funding associated with them — not to mention identifying value and the ideal way to track performance.
"You need a system of insight. You're not trying to replace systems of record... What you're trying to do is bring them together in a seamless way, and the cloud is a great way to do that. Bring the data together, so people making decisions upstream and downstream can do it all on a single location, off the same page, off the same data. That addresses the visibility challenge. That addresses the data challenge." — Bob Debicki, Senior Director, CPG and Retail, Anaplan
But with today’s increasingly disparate data sources, companies are even more strained at understanding how to spend effectively across all channels. As a result, they’re overstocking products while overspending on incentive programs, all because they lack the necessary visibility and insight for a holistic picture.
One method to alleviate some of these challenges is to leverage a data platform that unites these disconnected processes and data sources — providing both visibility and agility for companies to shift their in-store marketing activities to other routes and become more responsive to market changes. Rather than replacing systems of record, CGs that leverage systems of insight enable both upstream and downstream decision makers to operate on the same page.
Not only can this provide the much-needed single source of truth, but building automation into the process can also enable teams to more effectively collaborate by stripping away the tangled webs of legacy systems. What’s more, it can bolster relationships with trading partners as the data models can address all aspects of marketing and trade spend, including demand, inventory and pricing data.
"At the end of the day, our industry is a team sport, probably more so than most industries... and so you need to have this ability to effectively collaborate within your organization, say from a sales and operations planning perspective, or across the whole value chain. You need to be able to bring all this data together, but also break the silos under the processes so that you can actually collaborate and do planning across that entire value chain." — David McCarty, CPG Industry Principal, Twelve Consulting Group
Beyond simple efficiency, leveraging a data platform also enables companies to account for new and shifting trends, such as social sentiment, inflation and other macro indicators.
Learn more best practices for consumer goods companies that want to improve their revenue management effectiveness, including what to put on your roadmap and the strongest way to get out of the gate.
Watch the original CGT Virtual Fireside Chat video here