A global pandemic, social justice advocacy, the ubiquitous rise of digital commerce, advanced last-mile fulfillment technologies, and sensitivities toward environmental and social purpose with brands—these topics are all changing how consumers think and interact with CPGs manufacturers. This ever-changing business landscape means CPGs must reevaluate their trade promotion funding, communication, and spending strategies, and align their systems road map to fit new priorities and marketplace opportunities.
Today’s political, economic, and environmental impacts have caused four disruptive forces to emerge that are increasingly impacting the CPG landscape. As a reimagined future sets in, these forces are likely to directly impact TPx strategies. CPGs with systems that enable nimbleness and flexibility—allowing planners to adjust their TPx strategies through scenario planning, reducing wide-sweeping promotions, and increasing their use of more targeted promotions— are better prepared to partner with retailers on go-forward category plans. Retailers need to have multiple promotion and plan options that they can trigger depending on the current consumer behavior and demand. Those without the proper infrastructure may find growth more challenging, in part because of an inability to sustain the high levels of household penetration made possible through shelter-in-place orders, without a mechanism to convert product trial into loyalty and advocacy through more targeted efforts. Manufacturer brands who do not nimbly reset and replan to the current environment can quickly find themselves irrelevant in the minds of the shopper and retail partners. Brands, strategies, and technologies that are agile and support the consumer during this time of crisis and change can build consumer loyalty. Organizations need to increase the speed of decision-making, which, for many CPGs, means breaking down the organizational silos and increasing cross-functional collaboration. CPGs with revenue management teams and analytics/optimization capabilities are positioned well to lead during the demand and organizational planning shifts.
Trends in consumer preferences and their impact on TPx SHIFT IN DEMAND: Persisting trends (e.g., cleanliness, in-home dining) are causing a shift in demand for certain categories, driven by new shopping behaviors and usage occasions like pandemic pantry-loading, consumer desire for shelf-stable attributes, supply challenges, omni-channel shifts to e-commerce, and other COVID impacts. Implications for TPx: It is important for CPGs to review history and how each brand responds during a recession, and develop actions that can be taken to proactively stabilize and grow the business. Brand loyalty will be challenged during and following the crisis. This demand shift will make last year’s baseline planning complex, as teams need to evaluate which baseline trends will continue and which are a pandemic anomaly. The shift will also require refreshes of trade and promotional guidelines (e.g., frequency and depth), improved volume forecasting, occasion-based mix strategies, and product cost models to drive share gains within in-demand categories. CONTACTLESS EXPERIENCE: Heightened sanitation concerns are causing a larger share of shoppers to shift to digital, increasing touchless ordering and online shopping.
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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.
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Industry News
| Kellogg E-Commerce Effort Pays DividendsSource: (Food Biz News October 1, 2020) In a presentation earlier in September, Kellogg said its e-commerce business nearly doubled as a percentage of global retail sales, to about 6% in the second quarter ended June 30. Additionally, sales growth accelerated as the quarter progressed. Roughly 90% of the company’s global e-commerce sales were generated by its top 20 brands. 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! |
| McCormick’s Consumer Business Continues to OutperformSource (Motley Fool September 29, 2020) McCormick reported a year-over-year revenue advance of 8% this quarter to $1.4 billion, or 9% in constant-currency terms. Consumer segment sales jumped 15% to $911 million, as the COVID-19 pandemic continued to drive eat-at-home consumer trends, which benefited McCormick’s retail spice and condiment sales. Strong trends in the Americas and EMEA (Europe, Middle East, and Africa) region offset high single-digit sales declines in the Asia/Pacific region. Learn more Mondelez Lays out its Marketing Strategy for a Post-Cookie FutureSource: (Mktg Dive October 1, 2020) Anuj Dahiya, global digital media head at Mondelez, said “Context is critical, for sure, and we make sure that we’re continuously building on top of our audience insights as well, However, brand safety could be an issue when you talk about contextual targeting.” “Context is critical, for sure, and we make sure that we’re continuously building on top of our audience insights as well,” Dahiya said. Learn more Register Today for this complementary webinar! Pepsi’s Evolution from Trade Promotion Management to Revenue Management |
| Walmart Stores’ App-Driven RedesignSource: (Fox Biz News September 30, 2020) Walmart’s digitally-driven retail experience comes as more supermarkets roll out store plans that mimic online shopping. Amazon-owned Whole Foods earlier this month launched its first-ever online retail store. And earlier this week, Amazon introduced Amazon One, it’s palm-scanning payment system at Amazon Go stores. Learn more Yoplait Dips into Instagram Reels for Feeding AmericaSource: (Mobile Mktr September 29, 2020) Yoplait owner General Mills looks to be gearing up marketing on several fronts as a pandemic-driven spike in sales starts to cool. The packaged foods giant has gained market share in key categories like cereal during the health crisis, according to The Wall Street Journal, but it now needs to fight to retain that foothold as more regular shopping habits return. 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 |
| If you missed this RGM webinar, POI members can access the recording here |
| Budweiser Going Hyperlocal to Attract Younger DrinkersSource: (The Drum September 29, 2020) This tactical, local execution is a glimpse into Budweiser’s larger play for the all-important 25- to 34-year-old target demographic, according to vice-president of marketing Monica Rustgi. “Making the younger generation fall in love with the brand the way other generations have – that’s my job.” Learn more Target to Take on Amazon’s Prime DaySource: (Reuters September 29, 2020) Target, Amazon and Walmart Inc WMT.N are among some of the retailers that benefited from the increasing shift to online shopping as customers avoid crowds due to the coronavirus, while many retailers have made plans to stretch the busy holiday season. Target said it will hold its “Deal Days” promotional event on Oct. 13 and 14 and will also expand Black Friday pricing for the whole of November, promising shoppers nearly 1 million more deals than last year. Learn more Wakefern ShopRite Rebrands Deli Mobile AppSource: (Supermkt News September 30, 2020) By bringing the convenience of online ordering to the deli counter, the Deli & More app has been popular with customers since its launch four years ago, ShopRite added. In reviews, the app scores 4.6 out of 5 stars on the Apple App Store (iOS) and 4.2 out of 5 stars on Google Play (Android). Learn more |
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