This past week at the POI Global Virtual Summit, great details were shared by subject matter experts including CPG and Retailer peers on best practices for transformation with pricing, promotion, Advanced Analytics, planning and forecasting, and solutions. As we enter the fourth quarter, and begin to look at initiatives for 2021, it is important to understand the basis for each are of improvement. The following are taken from the POI 2020 TPx Panorama Report. Members can access the full report here
Trade Promotion Management (TPM) Functionality:Transactional sales planning applications that are able to plan, fund, evaluate, execute, report, sales forecast, and complete the deductions/claims/settlement process.T he vendor offering TPM must enable the following key customer-planning functions providing a complete solution that meets market requirements for each function:•Strategic and account planning•Promotion planning and budgeting•Simple promotion evaluation (scenario planning and/or post-event analysis: based on historicals)•Calculation of financials and other KPIs for both manufacturer and retailer•Promotion execution and monitoring•Fund and accrual management•Deductions/settlements/claims management•Forecast development (base and incremental)•Reporting and dashboards
Trade Promotion Optimization (TPO) Completeness:Applications utilizing advanced promotion analytics and optimization models to improve promotions & plans and to drive efficiency of the manufacturer & retailer business. Platforms may use various types of models: Predictive and/or machine learning (ML) /artificial intelligence (AI) to improve promotional outcomes. Includes post event ROI Analytics. Solutions have the ability to create promotions and full year plans, but have limited or no TPM transactional components. Some TPO platforms may also include RGM capabilities depending on the vendor including pricing, promotion, and assortment components. The vendor offering TPO must have the ability to predict promotional outcomes with:
•Automated and modeled baselines•Vendor calculates coefficients, lift factors, and elasticities
•Uses available data to understand past promotion performance and project future (historical data, POS Brand loyalty, etc.)
•Multiple promotional factors, including timing, frequency, duration, pricing, promotion type, and other capabilities specified by users
•Promotion decomposition: Harmonizes data to know the impact of all activity that is critical to promotion analysis, consumption, spending, shipment, qualitative trade advertising, and shopper marketing activity
•Identify objective to generate optimal promotion and/or plan to achieve desired goal (maximize: profitability, unit sales, revenue, market share, spend, and contribution)
•Predict and optimize promotion outcomes (what-if), including revenue and profit, for both manufacturers and retailers
•Ability to manage overlapping promotional components and take into account EDLP and Hi-Lo effect where overlap exists•Identifies Pre/Post Effects (consumer Pantry Loading and Pre and Post Buy-In)
•Calculates statistically-based Promotional Return on Investment (ROI) –optimally with automated “true-up” capabilities, but at least manual entry input of user intelligence•Constraint-based optimization
•Optimization through iterative scenarios and/or complete AI calendar development
•“Best” promotion option•Cannibalization effects
Revenue Growth Management (RGM) Completeness:New Category: Applications that specialize in delivering RGM specific suites, enabling Enterprise Revenue Growth Management practices including pricing, promotion, and assortment components. The solution may include TPO capabilities; some include advanced ML/AI modeling and analytics. RGM analytics capabilities POI evaluated in 2020:
▪Pricing: Price ladder analytics; price pack curves; ability to evaluate pricing trends/progressions; price elasticity evaluation and visualization; pricing optimization▪Promotions: Post event ROI trade analytics and graphics; trade analysis (gross to net, margin pools, etc.)
▪Assortment: SKU profitability/prioritization tools (Power Ranking); mix analysis
Interested in learning more, and how to effectively, and efficiently approach improvement with these efforts, including Holistic Enterprise Planning and Execution?
Write Michael Kantor, CEO and Founder, Promotion Optimization Institute, LLC at mkantor@p-o-i.org
View the on-demand agenda and register today!https://bit.ly/POIGlobalVirtualSummit
Join POI as a member (see detailed values here https://bit.ly/POImembershipValues)
mailto:mkantor@p-o-i.org(opens in a new tab)
Industry News
| LEGO CEO: Why Lego Bricks are More Important Than EverSource: (Yahoo News September 20, 2020) “It was not about trying to sell more,” says Lego CEO Niels Christiansen. “At the center of it is really creative ideas of what to build.” Still, consumer sales at Lego rose 14% in the first half of 2020. The company says the digital content has reached more than 80 million users around the world, helping provide inspiration that has made the world’s living rooms awash with castles, ships, trucks, treehouses and fantastical figures. Learn more Promotion Optimization Institute Releases POI 2020 TPx Vendor Panorama, and Names Best-in-Class Across Capabilities“Even in the face of COVID-19 and the consumer products industry paradigm shift that is taking place, Trade Promotion and Revenue Growth Management is more relevant today than ever before,” said Pam Brown, Chief Commercial Officer of the POI. “COVID has dramatically accelerated the move to eCommerce and the majority of CPG companies are struggling with online trade promotion. While much work needs to be done, many POI members and the vendors are rising to the challenge”. Learn more Register here to Access the POI Global Virtual Summit on-demand sessions and resources On-Demand Anytime! |
| Kellogg’s Special K’s Twitter-inspired Cereal KitSource: (Mobile Mktr September 22, 2020) The quirky campaign can help to boost Special K’s social following and enrollment in the Kellogg’s Family Rewards program, which offers coupons and discounts to members who collect points with every purchase of a Kellogg’s product. The company can use the enrollment information and engagement data from its social channels to measure the effectiveness of the campaign. Special K has 3.2 million followers on Facebook, 17,000 on Twitter and 11,500 on Instagram. Learn more Why Walmart Thinks TikTok is the Future of its BusinessSource: (Vox September 22, 2020) Today, the selection on Amazon’s third-party marketplace is much bigger than Walmart’s. But a TikTok-branded storefront, or a direct link for Walmart merchants to advertise through the video app, could help the retailer attract a new set of younger consumers that might otherwise look to Amazon or other e-commerce websites as their main shopping destination. Learn more Register Today for this complementary webinar!Pepsi’s Evolution from Trade Promotion Management to Revenue Management |
| Hormel’s Record-Setting Effort Benefits Frontline WorkersSource: (Mktg Dive September 21, 2020) The record-setting effort comes after Hormel hosted a virtual film festival on YouTube in May. Although it didn’t provide details about the achievement, Hormel’s setting the world record for the largest virtual pizza party suggests that plenty of consumers engaged with the brand’s mix of entertainment and community on Zoom. Learn more The POI State of the Industry – 2020-2021 Annual TPx and Retail Execution Bench-marking Survey –Please participate hereThe Promotion Optimization Institute (POI) is conducting the annual industry survey to help you and your company improve Enterprise planning, promotion effectiveness, retail execution, and understand your business successes and challenges. Here is the “ask:” If you are in a position to provide a solid perspective on your company’s TPx and Retail Execution capabilities, then please take 15 minutes to complete the confidential survey, which is broken down into two distinct processes: Holistic Enterprise Planning (Including eCommerce, digital, TPM, TPO, RGM etc.) & Retail Execution. If you are a solutions/services provider, please do not take the survey. Please instead, ask your clients to complete the survey via the following link: https://www.surveymonkey.com/r/POIsurvey2020 |
| General Mills Taps Nostalgia with Classic CerealsSource: (Ad Week September 22, 2020) Fans can join in person (in cars) or virtually for a slate of classic Saturday morning cartoons, hosted by Lopez. To make the deal even sweeter, the first 100 fans to sign up for the virtual event will receive samples of cereal delivered to their doors. At the time of writing, the 250 drive-in spots had already sold out. Learn more RB’s Mucinex Drives Trial with Omnichannel ExperienceSource: (Mobile Mktr September 23, 2020) Mucinex sent the branded tissue packs to approximately 35,000 households and saw a 1.42% click-through rate. This translated into close to 15,000 products that wound up in online shopping carts, for a total product value of $241,257.While QR codes have been available since the late 1990s, a pandemic-driven shift to online shopping by consumers and digital-first marketing strategies by brands could inspire other marketers to follow Mucinex’s lead. Learn more If you missed this webinar, POI members can access the recording hereDigital Transformation at Clif Bar – Focusing on Success and Growth! |
| “Coca-Cola Will Enter U.S. Hard Seltzer Market in 2021Source: (CNBC September 21, 2020) Coca-Cola CEO James Quincey said “I think these innovations that we’ve seen, including hard seltzer, are a trend of the consumer looking for new things, and if we want to be consumer-centric … then that’s what’s taking us to this opportunity,” The excursion into the fast-growing category is a noteworthy pivot for the beverage giant, which hasn’t had a presence in the market since the early 1980s, when it sold off its wine business. Learn more Zero-waste online grocer raises $3MSource: (Grocery Dive, Sept. 25, 2020Zero Grocery, an online grocer that sells products in reusable containers, has raised $3 million in seed funding, bringing the company’s total funding to $4.7 million, according to a company blog post. The e-grocer delivers plastic-free food packed in glass jars, boxes and other containers. A membership costs $25 a month and includes free delivery, and non-members can get groceries delivered for $7.99 per order. Learn more |
POI Pulse September 14, 2020
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